<SEC-DOCUMENT>0000766829-14-000003.txt : 20140129
<SEC-HEADER>0000766829-14-000003.hdr.sgml : 20140129
<ACCEPTANCE-DATETIME>20140128212649
ACCESSION NUMBER:		0000766829-14-000003
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20140128
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20140129
DATE AS OF CHANGE:		20140128

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SJW CORP
		CENTRAL INDEX KEY:			0000766829
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				770066628
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08966
		FILM NUMBER:		14554663

	BUSINESS ADDRESS:	
		STREET 1:		110 W. TAYLOR STREET
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95110
		BUSINESS PHONE:		4082797800

	MAIL ADDRESS:	
		STREET 1:		110 W. TAYLOR STREET
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95110
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form8k01242014.htm
<DESCRIPTION>8-K
<TEXT>
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		<title>Form8-K 01-24-2014</title>
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<a name="s469B7D3FB4137E5770998CD3BCC52477"></a><div></div><br><div style="line-height:120%;padding-top:4px;text-align:center;font-size:14pt;"><font style="font-family:inherit;font-size:14pt;font-weight:bold;">UNITED STATES</font></div><div style="line-height:120%;text-align:center;font-size:14pt;"><font style="font-family:inherit;font-size:14pt;font-weight:bold;">SECURITIES AND EXCHANGE COMMISSION</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Washington, D.C. 20549</font></div><div style="line-height:120%;text-align:left;font-size:4pt;"><font style="font-family:inherit;font-size:4pt;">&#160;</font></div><div style="line-height:120%;padding-bottom:1px;text-align:center;padding-left:192px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-top:5px;text-align:center;font-size:14pt;"><font style="font-family:inherit;font-size:14pt;font-weight:bold;">FORM 8-K</font></div><div style="line-height:120%;text-align:left;font-size:4pt;"><font style="font-family:inherit;font-size:4pt;">&#160;</font></div><div style="line-height:120%;padding-bottom:1px;text-align:center;padding-left:192px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-top:5px;text-align:center;font-size:14pt;"><font style="font-family:inherit;font-size:14pt;font-weight:bold;">CURRENT REPORT</font></div><div style="line-height:120%;padding-top:13px;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Pursuant to Section&#160;13 OR 15(d)</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">of The Securities Exchange Act of 1934</font></div><div style="line-height:120%;padding-top:13px;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Date of Report (Date of earliest event reported) January 24, 2014</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-bottom:1px;text-align:center;padding-left:192px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-top:5px;text-align:center;font-size:17pt;"><font style="font-family:inherit;font-size:14pt;font-weight:bold;">SJW Corp</font><font style="font-family:inherit;font-size:17pt;font-weight:bold;">.</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">(Exact name of registrant as specified in its charter)</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-bottom:1px;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:99.35897435897436%;border-collapse:collapse;text-align:left;"><tr><td colspan="5"></td></tr><tr><td width="39%"></td><td width="1%"></td><td width="37%"></td><td width="1%"></td><td width="22%"></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">California</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">1-8966</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">77-0066628</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">(State or other jurisdiction</font></div><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">of incorporation)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">(Commission</font></div><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">File Number)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">(IRS Employer</font></div><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">Identification No.)</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;">&#160;</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:99.78632478632478%;border-collapse:collapse;text-align:left;"><tr><td colspan="3"></td></tr><tr><td width="58%"></td><td width="2%"></td><td width="40%"></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">110 W. Taylor Street, San Jose, California</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">95110</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">(Address of principal executive offices)</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">(Zip Code)</font></div></td></tr></table></div></div><div style="line-height:120%;padding-top:13px;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;padding-top:13px;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">(408) 279-7800</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Registrant&#8217;s telephone number, including area code</font></div><div style="line-height:120%;padding-top:13px;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Not Applicable</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">(Former name or former address, if changed since last report)</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-bottom:1px;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;padding-top:5px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;padding-top:5px;text-align:left;font-size:10pt;"><font style="font-family:Wingdings;font-size:10pt;">&#168;</font><font style="font-family:inherit;font-size:10pt;">&#32;Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</font></div><div style="line-height:120%;padding-top:5px;text-align:left;font-size:10pt;"><font style="font-family:Wingdings;font-size:10pt;">&#168;</font><font style="font-family:inherit;font-size:10pt;">&#32;Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></div><div style="line-height:120%;padding-top:5px;text-align:left;font-size:10pt;"><font style="font-family:Wingdings;font-size:10pt;">&#168;</font><font style="font-family:inherit;font-size:10pt;">&#32;Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</font></div><div style="line-height:120%;padding-top:5px;text-align:left;font-size:10pt;"><font style="font-family:Wingdings;font-size:10pt;">&#168;</font><font style="font-family:inherit;font-size:10pt;">&#32;Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</font></div><div style="line-height:120%;padding-bottom:1px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><br><div></div><hr style="page-break-after:always"><a name="s469B7D3FB4137E5770998CD3BCC52477"></a><div></div><br><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="12%"></td><td width="88%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Item&#160;1.01</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Entry into a Material Definitive Agreement</font></div></td></tr></table></div></div><div style="line-height:120%;padding-top:5px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On January 24, 2014, San Jose Water Company (the &#8220;Company&#8221;), a wholly-owned subsidiary of SJW Corp. entered into a Note Agreement (the &#8220;Note Agreement&#8221;) with John Hancock Life Insurance Company (U.S.A.) and its affiliate (the &#8220;Purchaser&#8221;), pursuant to which the Company agreed to sell an aggregate principal amount of $50 million of its 5.14% Senior Notes, Series L (the &#8220;Notes&#8221;) to the Purchaser.  The Notes are unsecured obligations of the Company, due on the date that is the 30th anniversary of the issuance of the Notes.  Interest is payable semi-annually in arrears on March 1 and September 1 of each year.  The Note Agreement contains customary representations and warranties.  The Company has agreed to customary affirmative and negative covenants for as long as the Notes are outstanding, including, subject to certain exceptions and qualifications, among other things, limitation on indebtedness based on a specified debt to capitalization ratio and a net income to interest charge ratio.  The Notes are subject to customary events of default, the occurrence of which may result in all of the Notes then outstanding becoming immediately due and payable.  The consummation of the transaction contemplated under the Note Agreement is subject to customary closing conditions, including the execution and delivery of the Notes.  The closing date is August 5, 2014, or such later date as the parties may mutually agree, but no later than October 3, 2014.</font></div><div style="line-height:120%;padding-top:5px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;padding-top:5px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The foregoing description of the Note Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Note Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="12%"></td><td width="88%"></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Item&#160;2.03</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant</font></div></td></tr></table></div></div><div style="line-height:120%;padding-top:5px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The disclosures set forth in Item 1.01 above are incorporated by reference in this Item 2.03.</font></div><div style="line-height:120%;padding-top:5px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td width="12%"></td><td width="88%"></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Item&#160;9.01</font></div></td><td 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style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;border-bottom:2px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Exhibit</font></div><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Number</font></div></td><td style="vertical-align:bottom;border-bottom:2px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-bottom:2px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Description of Document</font></div></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">10.1</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Note Agreement between San Jose Water Company and John Hancock Life Insurance Company (U.S.A.) and its affiliate, dated as of January 24, 2014.</font></div></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr></table></div></div><br><div></div><hr style="page-break-after:always"><a name="s469B7D3FB4137E5770998CD3BCC52477"></a><div></div><br><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">SIGNATURES</font></div><div style="line-height:120%;padding-top:13px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="4"></td></tr><tr><td width="43%"></td><td width="1%"></td><td width="41%"></td><td width="15%"></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">SJW Corp.</font></div></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="3" style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">January 28, 2014</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">/s/ James P. Lynch</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">James P. Lynch</font></div><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Chief Financial Officer and Treasurer</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr></table></div></div><div style="line-height:120%;padding-top:19px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:95.51282051282051%;border-collapse:collapse;text-align:left;"><tr><td colspan="3"></td></tr><tr><td width="10%"></td><td width="6%"></td><td width="84%"></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;border-bottom:2px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Exhibit</font></div><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Number</font></div></td><td style="vertical-align:bottom;border-bottom:2px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;border-bottom:2px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Description of Document</font></div></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">10.1</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Note Agreement between San Jose Water Company and John Hancock Life Insurance Company (U.S.A.) and its affiliate, dated as of January 24, 2014.</font></div></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td colspan="2" style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><br><div></div>	</body>
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<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exhibit-noteaseriesl.htm
<DESCRIPTION>EXHIBIT
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<a name="sEAA0F954857CF06B4945D4E10602CCF6"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">EXHIBIT 10.1</font></div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">EXECUTION COPY</font></div><div style="line-height:120%;"><hr></div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">SAN JOSE WATER COMPANY</font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">NOTE AGREEMENT</font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Dated as of January&#160;24, 2014</font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Re:   $50,000,000 5.14% Senior Notes, Series&#160;L, Due 2044</font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;"><hr></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><br><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s1DB6E1864407DCB40922D4E10623C954"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:120%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Table of Contents</font></div><div style="line-height:120%;text-align:center;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="3"></td></tr><tr><td width="17%"></td><td width="65%"></td><td width="18%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SECTION</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">HEADING</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">PAGE</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SECTION 1.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">DESCRIPTION OF NOTES; COMMITMENT</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sb4e76ebdb654455ab51f5173a74d8660">1</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;1.1.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Description of Notes</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s55fcc7d6b3de4dba8371e143b04e9e78">1</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;1.2.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Commitment</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s265ce81add4d4ec2a049069b668adcf4">1</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;1.3.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Execution Date; Closing Date</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sf80fcc0f14df4078b50d0bc933859325">2</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SECTION&#160;2.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">PAYMENT OF NOTES</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sf80fcc0f14df4078b50d0bc933859325">2</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;2.1.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Payments</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s9b3c4262a56d45069bce9ad292dc8b12">2</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;2.2.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Optional Prepayment Without Make&#8209;Whole Amount</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s0287ad19f5244189acfcd0a4be04c437">2</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;2.3.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Additional Optional Prepayments</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s3ff5468afcd14d2daec5fe74c76bd8c8">2</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;2.4.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Notice of Optional Prepayments</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sc4f5c6b745144001bce2228b749d927d">2</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;2.5.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Application of Prepayments</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#scdadac44505a4fbf8caa39d491662590">3</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;2.6.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Direct Payment</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s0c94af2a52924e15a36aa7aa6b002f88">3</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section 2.7.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Payments Due on Non-Business Days</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s0c4f8d83a36648b5afd0187879efad10">3</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SECTION&#160;3.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">REPRESENTATIONS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s1d4f3506a4234d1b949e7a88ab329b45">3</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;3.1.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Representations of the Company</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sf384c76f7ddf4434bcaf04cd199e5bb9">4</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;3.2.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Representations of the Purchasers</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sacab7207832146d6b66414037550cd07">4</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SECTION 4.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">CONDITIONS TO EXECUTION AND CLOSING</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s87acbf15cb7c4ce1b8bea65c14b4ac14">5</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;4.1.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Conditions to Execution</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s7250d498c1b14d6a98252b268aebb3cd">5</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;4.2.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Conditions to Closing</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s771ab77edf48477996eb2f595067cb32">6</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;4.3.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Waiver of Conditions</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s9ea1ed1ea3224c05be8da201eb3b0ef2">7</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SECTION&#160;5.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">COMPANY COVENANTS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s4e49812b44544954a331c073f0eb0b44">7</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.1.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Corporate Existence</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s0d03ebd6733645cca3eba7dce3808584">7</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.2.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Insurance</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s5c47420a55594075b05c1008b95ba7ac">7</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.3.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Taxes, Claims for Labor and Materials, Compliance with Laws</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sa32366c311754f8b96096cd213b73b64">8</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.4.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Maintenance</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sbc5f2f370e764c2c957fdb0eaa44194c">9</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.5.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Nature of Business</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s649e4fc5319b4a579c45a0587bef0687">9</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.6.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Limitations on Indebtedness</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sb0dbb17abf07477ab9b5983a42bbc07d">9</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.7.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Limitation on Liens</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s90ff5d0dd279455289a5679147e05669">10</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.8.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Restricted Payments</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sa878635ca5954420be1ecc3a4aca2919">12</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.9.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Investments</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s6bb4f5656c4844dd9067fad2bf57b84f">13</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.10.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Mergers, Consolidations and Sales of Assets</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sca1c0aefbcf747628d4277db1cef4099">15</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.11.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Guaranties</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s4d7d48dc82954dddba7c370ec8149432">18</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.12.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Acquisition of Notes</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s7953610bc4834801b520df444bbc9efa">18</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.13.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Transactions with Affiliates</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s90d1403e3ad84d57ab8f2d7ef5e910a9">18</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.14.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">[Reserved]</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s26d77953283440eeaf01f18172cbf0cf">18</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.15.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Hazardous Material</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s5880ed33fd9543d388daf6f4367f697e">18</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;5.16.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Reports and Rights of Inspection</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s85b66c1ef5894af38839c8d9e24197c2">19</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SECTION&#160;6.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">EVENTS OF DEFAULT AND REMEDIES THEREFOR</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s906b246896dc43c59e74b2831162fb12">22</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;6.1.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Events of Default</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s8809a461ad8545d987c7d581670766ab">22</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;6.2.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Notice to Holders</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s79be77791bfd4a3cb8b7c87eb8d05072">24</a></div></td></tr></table></div></div><br><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s1DB6E1864407DCB40922D4E10623C954"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:120%;text-align:center;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="3"></td></tr><tr><td width="17%"></td><td width="65%"></td><td width="18%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;6.3.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Acceleration of Maturities</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sf0d3b72acf0841c3a2c25101ab8f30ec">24</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;6.4.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Rescission of Acceleration</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sadc9ee67dd444d498a6425d4608339e4">24</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SECTION&#160;7.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">AMENDMENTS, WAIVERS AND CONSENTS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s0ef38fdbbd9043a0878819a53d4e4376">25</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;7.1.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Consent Required</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s69272e2414334ccc8a4229e16bfd0938">25</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;7.2.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Solicitation of Holders</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s8d5d4ef641bd489cb15823a36f2a9ab6">25</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;7.3.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Effect of Amendment or Waiver</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sa80c2695de2144debe33df1bac0c25d0">26</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SECTION&#160;8.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">INTERPRETATION OF AGREEMENT; DEFINITIONS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sf8bdb64d05c549a482841e41e941e3b5">26</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;8.1.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Definitions</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sf04cf6b24b7c4c4b8840711989a10ca5">26</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;8.2.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Accounting Principles</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sd56d9a59f8cf436996844375c312f09e">36</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;8.3.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Directly or Indirectly</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s70748d89282946ea8108cf75ea8f5926">36</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SECTION&#160;9.</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">MISCELLANEOUS</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sbe6bf8bdf6e34762bf2af870dbed7525">37</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.1.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Registered Notes</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s8a6b45ed4a8d4c888fea6b2dbfa027e0">37</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.2.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Exchange of Notes</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s965513559f984599a4c9af85133dc2b1">37</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.3.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Loss, Theft, Etc. of Notes</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s1b0c49364ccb42c2a309e604f104873d">37</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.4.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Expenses, Stamp Tax Indemnity</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sa16828d773984534ac26422bc1a71bcb">38</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.5.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Powers and Rights Not Waived: Remedies Cumulative</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sadd57392036d4c50aef32d62bf507159">38</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.6.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Notices</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sf3ef9357604d472ab9d661712a34ef0d">38</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.7.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Successors and Assigns</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sdd85c739a1c7482a9bdc1f6da2fbc9fb">39</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.8.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Survival of Covenants and Representations</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s380e2d0e3d154339bf23090d0d454010">39</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.9.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Severability</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s5373aec21e7e4bc1851f56066ffece0f">39</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.10.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Governing Law</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#sfc2c695a135e476395543ce75b7185c8">39</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section&#160;9.11.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Captions</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s8f9123299a044f1fbaa62f4e09069b61">39</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Section 9.12.</font></div></td><td style="vertical-align:bottom;padding-left:20px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Confidential Information</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:center;font-size:11pt;"><a style="font-family:inherit;font-size:11pt;" href="#s7c5df209fe3e45e59d8068a6cc5af2bd">39</a></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:20px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Signature Page</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr></table></div></div><div style="line-height:120%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">-ii-</font></div></div><hr style="page-break-after:always"><a name="s1DB6E1864407DCB40922D4E10623C954"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">ATTACHMENTS TO NOTE AGREEMENT:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Schedule I&#160;&#160;&#160;&#160;-&#160;&#160;&#160;&#160;Payment and Notice Instructions</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Schedule II&#160;&#160;&#160;&#160;-&#160;&#160;&#160;&#160;Subsidiaries of the Company</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Schedule III&#160;&#160;&#160;&#160;-&#160;&#160;&#160;&#160;Use of Proceeds</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Schedule IV&#160;&#160;&#160;&#160;-&#160;&#160;&#160;&#160;Liens of the Company</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Schedule V&#160;&#160;&#160;&#160;-&#160;&#160;&#160;&#160;Indebtedness of the Company</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Exhibit&#160;A&#160;&#160;&#160;&#160;-&#160;&#160;&#160;&#160;Form of 5.14% Senior Notes, Series&#160;L, Due 2044</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Exhibit&#160;B&#160;&#160;&#160;&#160;-&#160;&#160;&#160;&#160;Representations and Warranties</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Exhibit&#160;C&#160;&#160;&#160;&#160;-&#160;&#160;&#160;&#160;Form of Closing Certificate of the Company</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Exhibit&#160;D&#160;&#160;&#160;&#160;-&#160;&#160;&#160;&#160;Description of Special Counsel&#8217;s Closing Opinion</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Exhibit&#160;E&#160;&#160;&#160;&#160;-&#160;&#160;&#160;&#160;Description of Closing Opinion of Counsel to the Company</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">-iii-</font></div></div><hr style="page-break-after:always"><a name="s5bdd335fbe984b71888845a2d056a246"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SAN JOSE WATER COMPANY</font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">110 West Taylor Street <br>San Jose, California 95110</font></div><div style="line-height:140%;padding-top:24px;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">NOTE AGREEMENT</font></div><div style="line-height:140%;padding-top:26px;text-align:left;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Re:&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">$50,000,000 5.14% Senior Notes, Series&#160;L, Due 2044</font></div><div style="line-height:140%;text-align:center;padding-left:144px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">To each of the Purchasers named in Schedule I hereto</font></div><div style="line-height:140%;text-align:right;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Dated as of</font></div><div style="line-height:140%;text-align:right;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">January&#160;24, 2014</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Ladies and Gentlemen:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The undersigned, SAN JOSE WATER COMPANY, a California corporation (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;Company&#8221;</font><font style="font-family:inherit;font-size:11pt;">), agrees with each of the purchasers whose names appear at the end hereof (each, a </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;Purchaser&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;and, collectively, the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;Purchasers&#8221;</font><font style="font-family:inherit;font-size:11pt;">) as follows:</font></div><a name="sb4e76ebdb654455ab51f5173a74d8660"></a><table cellpadding="0" cellspacing="0" style="padding-top:21px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:113px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SECTION&#160;1.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">DESCRIPTION OF NOTES; COMMITMENT</font><font style="font-family:inherit;font-size:11pt;">.</font></div></td></tr></table><a name="s55fcc7d6b3de4dba8371e143b04e9e78"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;1.1.   Description of Notes</font><font style="font-family:inherit;font-size:11pt;">.  The Company will authorize the issue and sale of $50,000,000 aggregate principal amount of its 5.14% Senior Notes, Series&#160;L, Due 2044 (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Notes&#8221;</font><font style="font-family:inherit;font-size:11pt;">) to be dated the date of issue, to bear interest from such date at the rate of 5.14% per annum, to be payable as to interest in semiannual payments on the first day of each March and September in each year (commencing March&#160;1, 2015) and payable as to interest and principal at maturity, and to bear interest on overdue principal (including any overdue optional prepayment of principal) and Make-Whole Amount, if any, and (to the extent legally enforceable) on any overdue installment of interest at the rate of 7.14% per annum after the date due, whether by acceleration or otherwise, until paid.  The Notes will mature on the date that is the 30th anniversary of the Closing Date hereinafter referred to, and be substantially in the form attached hereto as </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit&#160;A</font><font style="font-family:inherit;font-size:11pt;">.  Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day months.  The Notes are not subject to prepayment or redemption at the option of the Company prior to their expressed maturity dates except on the terms and conditions and in the amounts and with the Make-Whole Amount, if any, set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;2</font><font style="font-family:inherit;font-size:11pt;">.  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Subject to the terms and conditions hereof and on the basis of the representations and warranties hereinafter set forth, the Company agrees to issue and sell to each Purchaser and each Purchaser agrees to purchase from the Company, on the Closing Date referred to below, Notes in the aggregate principal amount set opposite such Purchaser&#8217;s name in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;I</font><font style="font-family:inherit;font-size:11pt;">&#32;at a price of 100% of the principal amount thereof.  The Purchasers&#8217; obligations hereunder are several and not joint obligations and </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">1</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.</font></div><a name="sf80fcc0f14df4078b50d0bc933859325"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;1.3.   Execution Date; Closing Date</font><font style="font-family:inherit;font-size:11pt;">.  This Agreement shall be executed and delivered in advance of the Closing Date at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603 on January&#160;24, 2014 (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Execution Date&#8221;</font><font style="font-family:inherit;font-size:11pt;">).</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Delivery of the Notes will be made at the same offices of Chapman and Cutler LLP against payment therefor in Federal Reserve or other funds current and immediately available at the office of XXXX, Reference: Series&#160;L Senior Notes Funding, in the amount of the purchase price, at 9:00&#160;A.M., San Francisco time, on August&#160;5, 2014 or such later date (not later than October&#160;3, 2014) as shall mutually be agreed upon by the Company and each Purchaser (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Closing Date&#8221;</font><font style="font-family:inherit;font-size:11pt;">).  The Notes delivered to the Purchasers on the Closing Date will be delivered to such Purchaser in the form of a single registered Note for the full amount of such Purchaser&#8217;s purchase (unless multiple Notes in different denominations are specified by such Purchaser), registered in such Purchaser&#8217;s name or in the name or names of such nominee or nominees as such Purchaser may specify, all as such Purchaser may specify at any time prior to the Closing Date.</font></div><a name="s10d20b32a80f437f90231beac426c5b6"></a><table cellpadding="0" cellspacing="0" style="padding-top:21px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:114px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SECTION&#160;2.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">PAYMENT OF NOTES</font><font style="font-family:inherit;font-size:11pt;">.</font></div></td></tr></table><a name="s9b3c4262a56d45069bce9ad292dc8b12"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;2.1.  Payments</font><font style="font-family:inherit;font-size:11pt;">.     Except as set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Sections&#160;2.2 </font><font style="font-family:inherit;font-size:11pt;">and</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;2.3</font><font style="font-family:inherit;font-size:11pt;">, the Notes are not subject to any prepayment or redemption prior to their express maturity date.</font></div><a name="s0287ad19f5244189acfcd0a4be04c437"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;2.2.   Optional Prepayment Without Make-Whole Amoun</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">t</font><font style="font-family:inherit;font-size:11pt;">.  Upon compliance with </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;2.4</font><font style="font-family:inherit;font-size:11pt;">, the Company shall have the privilege, at any time and from time to time, of prepaying the outstanding Notes, either in whole or in part (but if in part then in a minimum principal amount of $100,000) in the event of a condemnation (or sale in anticipation of condemnation) of all or any part of the property of the Company pursuant to the exercise of the power of eminent domain by any governmental authority by application of the proceeds of such sale or condemnation.  Any such prepayment shall be at a price equal to 100% of the principal amount of the Notes, or a portion thereof to be prepaid, and accrued interest thereon to the date of such prepayment, without the Make&#8209;Whole Amount or other premium.</font></div><a name="s3ff5468afcd14d2daec5fe74c76bd8c8"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;2.3.  Additional Optional Prepayments</font><font style="font-family:inherit;font-size:11pt;">.   In addition to the optional prepayments set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;2.2</font><font style="font-family:inherit;font-size:11pt;">, upon compliance with </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;2.4</font><font style="font-family:inherit;font-size:11pt;">&#32;the Company shall have the privilege, at any time and from time to time, of prepaying the outstanding Notes, either in whole or in part (but if in part, in a minimum principal amount of $100,000) by payment of the principal amount of the Notes, or portion thereof to be prepaid, and accrued interest thereon to the date of such prepayment, together with a premium equal to the Make-Whole Amount.</font></div><a name="sc4f5c6b745144001bce2228b749d927d"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;2.4.  Notice of Optional Prepayment</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">s</font><font style="font-family:inherit;font-size:11pt;">.   The Company will give notice of any prepayment of the Notes pursuant to </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;2.2 </font><font style="font-family:inherit;font-size:11pt;">or</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;2.3</font><font style="font-family:inherit;font-size:11pt;">&#32;to each holder thereof not less than 30&#160;days nor more than 60&#160;days before the date fixed for such optional prepayment specifying (i)&#160;such date, (ii)&#160;the principal amount of the holder&#8217;s Notes to be prepaid on such date, (iii)&#160;that, if applicable, a Make-Whole Amount will be payable, </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">2</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(iv)&#160;the date when such Make-Whole Amount will be calculated, (v)&#160;the estimated Make-Whole Amount, and (vi)&#160;the accrued interest applicable to the prepayment.  Notice of prepayment having been so given, the aggregate principal amount of the Notes specified in such notice, together with accrued interest thereon and the Make-Whole Amount, if any, payable with respect thereto shall become due and payable on the prepayment date specified in said notice.  Not later than two business days prior to the prepayment date specified in such notice, the Company shall provide each holder of a Note written notice of the amount of any Make-Whole Amount payable in connection with such prepayment and a reasonably detailed computation of the Make-Whole Amount.</font></div><a name="scdadac44505a4fbf8caa39d491662590"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;2.5.  Application of Prepayments</font><font style="font-family:inherit;font-size:11pt;">.   All partial prepayments shall be applied on all outstanding Notes ratably in accordance with the unpaid principal amounts thereof.</font></div><a name="s0c94af2a52924e15a36aa7aa6b002f88"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;2.6.  Direct Payment</font><font style="font-family:inherit;font-size:11pt;">.   Notwithstanding anything to the contrary contained in this Agreement or the Notes, in the case of any Note owned by any Purchaser or such Purchaser&#8217;s nominee or owned by any subsequent Institutional Holder which has given written notice to the Company requesting that the provisions of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;2.6</font><font style="font-family:inherit;font-size:11pt;">&#32;shall apply, the Company will punctually pay (or cause to be paid) when due the principal thereof, interest thereon and Make-Whole Amount, if any, due with respect to said principal, and all other amounts payable to such Purchaser, such Purchaser&#8217;s nominee or such Institutional Holder of any Note pursuant to this Agreement or such Note, without any presentment of such Note, directly to such Purchaser or such Purchaser&#8217;s nominee or to such subsequent Institutional Holder at such Purchaser&#8217;s address or such Purchaser&#8217;s nominee&#8217;s address set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;I</font><font style="font-family:inherit;font-size:11pt;">&#32;hereto or such other address as such Purchaser, such Purchaser&#8217;s nominee or such subsequent Institutional Holder may from time to time designate in writing to the Company or, if a bank account with a bank located in the United States is designated for such Purchaser or such Purchaser&#8217;s nominee on </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;I</font><font style="font-family:inherit;font-size:11pt;">&#32;hereto or in any written notice to the Company from such Purchaser, from such Purchaser&#8217;s nominee or from any such subsequent Institutional Holder, the Company will make such payments in immediately available federal funds to such bank account, marked for attention as indicated, or in such other manner or to such other account in any bank located in the United States as such Purchaser, such Purchaser&#8217;s nominee or any such subsequent Institutional Holder may from time to time direct in writing.</font></div><a name="s0c4f8d83a36648b5afd0187879efad10"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section 2.7</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">.   </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Payments Due on Non-Business Days</font><font style="font-family:inherit;font-size:11pt;">.   Anything in this Agreement or the Notes to the contrary notwithstanding, (a) subject to clause (b), any payment of interest on any Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; and (b) any payment of principal of or Make-Whole Amount on any Note (including principal due on the maturity date of such Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.</font></div><a name="s1d4f3506a4234d1b949e7a88ab329b45"></a><table cellpadding="0" cellspacing="0" style="padding-top:21px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:0px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SECTION&#160;3.</font></div></td><td style="vertical-align:top;padding-left:138px;"><div style="line-height:140%;text-align:left;font-size:11pt;text-indent:-138px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">REPRESENTATIONS</font><font style="font-family:inherit;font-size:11pt;">.</font></div></td></tr></table><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">3</font></div></div><hr style="page-break-after:always"><a name="sf384c76f7ddf4434bcaf04cd199e5bb9"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;3.1.  Representations of the Company</font><font style="font-family:inherit;font-size:11pt;">.   The Company represents and warrants that all representations and warranties with respect to the Company and its Subsidiaries set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit&#160;B</font><font style="font-family:inherit;font-size:11pt;">&#32;attached hereto are true and correct as of the date hereof and are incorporated herein by reference with the same force and effect as though herein set forth in full.</font></div><a name="sacab7207832146d6b66414037550cd07"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;3.2.  Representations of the Purchasers</font><font style="font-family:inherit;font-size:11pt;">.   Each Purchaser severally represents, and in entering into this Agreement the Company understands, that each Purchaser is acquiring Notes for the purpose of investment and not with a view to the distribution thereof, and that neither Purchaser has a present intention of selling, negotiating or otherwise disposing of any of the Notes; it being understood, however, that the disposition of such Purchaser&#8217;s property shall at all times be and remain within such Purchaser&#8217;s control.  Each Purchaser further represents that at least one of the following statements is an accurate representation as to each source of funds (a </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Source&#8221;</font><font style="font-family:inherit;font-size:11pt;">) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;the Source is an </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;insurance company general account&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;(as the term is defined in the United States Department of Labor&#8217;s Prohibited Transaction Exemption (</font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;PTE&#8221;</font><font style="font-family:inherit;font-size:11pt;">) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the National Association of Insurance Commissioners (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;NAIC Annual Statement</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser&#8217;s state of domicile; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;the Source is a separate account that is maintained solely in connection with such Purchaser&#8217;s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as such Purchaser has disclosed to the Company in writing pursuant to this paragraph (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;the Source constitutes assets of an </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;investment fund&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;(within the meaning of Part VI of PTE 84-14 (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;QPAM Exemption&#8221;</font><font style="font-family:inherit;font-size:11pt;">)) managed by a </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;qualified professional asset manager&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;or </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;QPAM&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;(within the meaning of Part VI of the QPAM Exemption), no employee benefit plan&#8217;s </font></div><br><div><div style="line-height:140%;text-align:left;text-indent:312px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">&#160;&#160;&#160;&#160;</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;related&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this paragraph (d); 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in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this paragraph (e); or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(f)&#160;&#160;&#160;&#160;the Source is a governmental plan; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(g)&#160;&#160;&#160;&#160;the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this paragraph (g); or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(h)&#160;&#160;&#160;&#160;the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">As used in this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;3.2</font><font style="font-family:inherit;font-size:11pt;">&#32;the terms </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;employee benefit plan,</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8221; 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Conditions to Execution</font><font style="font-family:inherit;font-size:11pt;">.   Each Purchaser&#8217;s obligation to execute and deliver this Agreement on the Execution Date is subject to the representations and warranties of the Company in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit B </font><font style="font-family:inherit;font-size:11pt;">to this Agreement being correct when made on the Execution Date.  In addition, on or prior to the Execution Date, the approval of the Public Utilities Commission of the State of California for the issuance and sale of </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">5</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">the Notes shall have been obtained (and any appeal period with respect thereto shall have expired without any appeal therefrom having been taken) and shall be in full force and effect.</font></div><a name="s771ab77edf48477996eb2f595067cb32"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;4.2.  Conditions to Closing</font><font style="font-family:inherit;font-size:11pt;">.   Each Purchaser&#8217;s obligation to purchase Notes on the Closing Date shall be subject to the performance by the Company of its agreements hereunder which by the terms hereof are to be performed at or prior to the time of delivery of the Notes and to the following further conditions precedent:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Notes</font><font style="font-family:inherit;font-size:11pt;">.  On the Closing Date, such Purchaser or such Purchaser&#8217;s special counsel shall have received a duly executed Note or Notes registered in such Purchaser&#8217;s name or such other name or names as such Purchaser may have designated pursuant to </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;1.2</font><font style="font-family:inherit;font-size:11pt;">&#32;and in the aggregate principal amounts set forth opposite such Purchaser&#8217;s name in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;I</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Closing Certificate</font><font style="font-family:inherit;font-size:11pt;">.  Such Purchaser shall have received a certificate, dated the Closing Date, of the Company, signed by the President, Chief Financial Officer, or a Vice President thereof, the truth and accuracy of which shall be a condition to such Purchaser&#8217;s obligation to purchase the Notes proposed to be sold to such Purchaser and to the effect set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit&#160;C</font><font style="font-family:inherit;font-size:11pt;">&#32;hereto.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Legal Opinions</font><font style="font-family:inherit;font-size:11pt;">.  Such Purchaser shall have received from Chapman&#160;and Cutler LLP, and from Morgan, Lewis &amp; Bockius LLP, counsel for the Company, their respective opinions, dated the Closing Date, in form and substance satisfactory to such Purchaser, and covering the matters set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibits&#160;D </font><font style="font-family:inherit;font-size:11pt;">and </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">E</font><font style="font-family:inherit;font-size:11pt;">, respectively, hereto.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">No Adverse Change</font><font style="font-family:inherit;font-size:11pt;">.  There shall have been no material adverse change in the business, prospects, profits or condition, financial or otherwise, of the Company since December&#160;31, 2013.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(e)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Governmental Approvals</font><font style="font-family:inherit;font-size:11pt;">.  On or prior to the Closing Date, the approval of the Public Utilities Commission of the State of California for the issuance and sale of the Notes obtained prior to the Execution Date shall remain in full force and effect without amendment, and all other approvals, authorizations and consents, if any, of all governmental bodies (including courts) having jurisdiction with respect to the transactions contemplated hereby shall have been obtained and shall be in full force and effect.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(f)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Legal Investment</font><font style="font-family:inherit;font-size:11pt;">.  The Notes shall on the Closing Date qualify as a legal investment for such Purchaser under any laws regulating investments to which such Purchaser may be subject (without reference to any provision which permits the making of an investment without restriction as to the character of the particular investment), and such Purchaser shall have received such evidence as such Purchaser may reasonably request to establish compliance with this condition.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(g)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Private Placement Number</font><font style="font-family:inherit;font-size:11pt;">.  The Company shall have obtained, at its expense, a Private Placement Number for the Notes from Standard&#160;&amp; Poor&#8217;s Corporation.</font></div><br><div><div style="line-height:140%;text-align:left;text-indent:312px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">&#160;&#160;&#160;&#160;</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(h)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Satisfactory Proceedings</font><font style="font-family:inherit;font-size:11pt;">.  All proceedings taken in connection with the transactions contemplated by this Agreement, and all documents necessary to the consummation thereof, shall be reasonably satisfactory in form and substance to such Purchaser and such Purchaser&#8217;s special counsel, and such Purchaser shall have received a copy (executed or certified as may be appropriate) of all legal documents or proceedings taken in connection with the consummation of said transactions.  If any provision of this Agreement requires the certification, representation or warranty of the existence or nonexistence of any particular fact or implies as a condition the existence or nonexistence of such fact, then such Purchaser shall be free to require the establishment to such Purchaser&#8217;s satisfaction of the existence or nonexistence of any such fact.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;"></font><font style="font-family:inherit;font-size:11pt;">(i)</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#160;&#160;&#160;&#160;Payment of Special Counsel Fees</font><font style="font-family:inherit;font-size:11pt;">.  The Company shall have paid, on or before the Closing Date, the reasonable fees, charges and disbursements of the Purchasers&#8217; special counsel to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing Date.</font></div><a name="s9ea1ed1ea3224c05be8da201eb3b0ef2"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;4.3.  Waiver of Conditions</font><font style="font-family:inherit;font-size:11pt;">.   If on the Closing Date the Company fails to tender to each Purchaser the Notes to be issued to such Purchaser on such date or if the conditions specified in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;4.2</font><font style="font-family:inherit;font-size:11pt;">&#32;have not been fulfilled, such Purchaser may thereupon elect to be relieved of all further obligations under this Agreement.  Without limiting the foregoing, if the conditions specified in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;4.2</font><font style="font-family:inherit;font-size:11pt;">&#32;have not been fulfilled, such Purchaser may waive compliance by the Company with any such condition (other than </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Sections 4.2(e)</font><font style="font-family:inherit;font-size:11pt;">&#32;or </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">(f)</font><font style="font-family:inherit;font-size:11pt;">) to such extent as such Purchaser may in such Purchaser&#8217;s sole discretion determine.  Nothing in this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;4.3</font><font style="font-family:inherit;font-size:11pt;">&#32;shall operate to relieve the Company of any of its obligations hereunder or to waive any of such Purchaser&#8217;s rights against the Company.</font></div><a name="s4e49812b44544954a331c073f0eb0b44"></a><table cellpadding="0" cellspacing="0" style="padding-top:21px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:112px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SECTION&#160;5.</font></div></td><td style="vertical-align:top;padding-left:1.3333333333333333px;"><div style="line-height:140%;text-align:left;font-size:11pt;text-indent:-1.3333333333333333px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">COMPANY COVENANTS</font><font style="font-family:inherit;font-size:11pt;">.</font></div></td></tr></table><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">From the date of this Agreement until the Closing Date and continuing thereafter so long as any amount remains unpaid on any Note:</font></div><a name="s0d03ebd6733645cca3eba7dce3808584"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.1.  Corporate Existence</font><font style="font-family:inherit;font-size:11pt;">.   The Company will preserve and keep in full force and effect, and will cause each Restricted Subsidiary to preserve and keep in full force and effect, its corporate existence and all licenses and permits necessary to the proper conduct of its business, provided that the foregoing shall not prevent any transaction permitted by </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.10</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><a name="s5c47420a55594075b05c1008b95ba7ac"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.2.  Insurance</font><font style="font-family:inherit;font-size:11pt;">.   The Company will maintain, and will cause each Restricted Subsidiary to maintain, insurance coverage by financially sound and reputable insurers in such forms and amounts and against such risks as are customary for corporations of established reputation engaged in the same or a similar business and owning and operating similar properties.  Nothing contained in this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.2</font><font style="font-family:inherit;font-size:11pt;">&#32;shall prevent the Company or any Restricted Subsidiary from self-insuring against any such risk so long as (i)&#160;any such self-insurance does not exceed prudent levels for a company the size of the Company and its Restricted </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">7</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Subsidiaries taken as a whole, and operating in its industry, (ii)&#160;at any time an Event of Default exists, no such self-insurance shall be increased from the self-insurance in effect immediately prior to the occurrence of such Event of Default including any increase resulting from lowering coverage limits or increasing deductible amounts and (iii)&#160;the Company, pursuant to a plan maintained in accordance with generally accepted accounting principles, maintains accounting reserves which are adequate for the type and amount of self-insurance; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided, however,</font><font style="font-family:inherit;font-size:11pt;">&#32;that the level of self-insurance shall not exceed an amount which would require such reserves in excess of 5% of Consolidated Net Worth.</font></div><a name="sa32366c311754f8b96096cd213b73b64"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.3.  Taxes, Claims for Labor and Materials, Compliance with Laws</font><font style="font-family:inherit;font-size:11pt;">.   (a)&#160;The Company will promptly pay and discharge, and will cause each Restricted Subsidiary promptly to pay and discharge, all taxes, assessments and governmental charges or levies imposed upon the Company or such Restricted Subsidiary, respectively, or upon or in respect of all or any part of the property or business of the Company or such Restricted Subsidiary, all trade accounts payable in accordance with usual and customary business terms, and all claims for work, labor or materials, which if unpaid might become a Lien upon any property of the Company or such Restricted Subsidiary; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided</font><font style="font-family:inherit;font-size:11pt;">&#32;the Company or such Restricted Subsidiary shall not be required to pay any such tax, assessment, charge, levy, account payable or claim if (i)&#160;the validity, applicability or amount thereof is being contested in good faith by appropriate actions or proceedings which will prevent the forfeiture or sale of any property of the Company or such Restricted Subsidiary or any material interference with the use thereof by the Company or such Restricted Subsidiary, and (ii)&#160;the Company or such Restricted Subsidiary shall set aside on its books, reserves deemed by the Company to be adequate with respect thereto.  The Company will promptly comply and will cause each Restricted Subsidiary to comply with all laws, ordinances or governmental rules and regulations to which it is subject including, without limitation, the Occupational Safety and Health Act of 1970, as amended, ERISA and all laws (including Environmental Laws), ordinances, governmental rules and regulations relating to environmental protection in all applicable jurisdictions, the violation of which could, individually or in the aggregate, materially and adversely affect the properties, business, prospects, profits or condition of the Company and its Restricted Subsidiaries or could affect the ability of the Company or its Restricted Subsidiaries to perform or observe its or their obligations under this Agreement or the Notes or would result in any Lien not permitted under </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.7</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;The Company will not and will not permit any Controlled Entity (i)&#160;to become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or any Person that is the target of sanctions imposed by the United Nations or by the European Union, or (ii)&#160;directly or indirectly to have any investment in or engage in any dealing or transaction (including, without limitation, any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (1) would cause any Purchaser or holder to be in violation of any law or regulation applicable to such Purchaser or holder, or (2) is prohibited by or subject to sanctions under any U.S. Economic Sanctions, or (iii)&#160;to engage, nor shall any Affiliate of either engage, in any activity that could subject such Person or any Purchaser or holder to sanctions under CISADA or any similar law or regulation with respect to Iran or any other country that is subject to U.S. Economic Sanctions.</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">8</font></div></div><hr style="page-break-after:always"><a name="sbc5f2f370e764c2c957fdb0eaa44194c"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.4.Maintenance</font><font style="font-family:inherit;font-size:11pt;">.  The Company will maintain, preserve and keep, and will cause each Restricted Subsidiary to maintain, preserve and keep, its properties which are used or useful in the conduct of its business (whether owned in fee or a leasehold interest) in good repair and working order and from time to time will make all necessary repairs, replacements, renewals and additions so that at all times the efficiency thereof shall be maintained.</font></div><a name="s649e4fc5319b4a579c45a0587bef0687"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.5.  Nature of Business</font><font style="font-family:inherit;font-size:11pt;">.   Neither the Company nor any Restricted Subsidiary will engage in any business if, as a result, the general nature of the business (including but not limited to water reclamation and sewage treatment), taken on a consolidated basis, which would then be engaged in by the Company and its Restricted Subsidiaries would be substantially changed from the general nature of the business engaged in by the Company and its Restricted Subsidiaries on the Execution Date.</font></div><a name="sb0dbb17abf07477ab9b5983a42bbc07d"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.6.  Limitations on Indebtedness</font><font style="font-family:inherit;font-size:11pt;">.   (a)&#160;The Company will not, and will not permit any Restricted Subsidiary to, create, assume, incur or guarantee or in any manner be or become liable in respect of any Indebtedness, except:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(1)&#160;&#160;&#160;&#160;Indebtedness evidenced by the Notes;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(2)&#160;&#160;&#160;&#160;Debt of the Company and its Restricted Subsidiaries outstanding as of the Execution Date as described in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;V</font><font style="font-family:inherit;font-size:11pt;">&#32;hereto and confirmed by the certificate of the Company delivered on the Closing Date pursuant to </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;4.2(b)</font><font style="font-family:inherit;font-size:11pt;">;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(3)&#160;&#160;&#160;&#160;unsecured Current Debt of the Company (i)&#160;under a bank credit facility or (ii) to the Corporation or any subsidiaries of the Corporation; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided</font><font style="font-family:inherit;font-size:11pt;">, that if at the time any such Current Debt is incurred and after giving effect to such incurrence, the outstanding Additional Funded Debt of the Company, if any, shall be increased, the increased amount of such Additional Funded Debt would be allowed to be incurred under </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">clause (4)</font><font style="font-family:inherit;font-size:11pt;">&#32;of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 5.6(a)</font><font style="font-family:inherit;font-size:11pt;">;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(4)&#160;&#160;&#160;&#160;any other Funded Debt of the Company, </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided </font><font style="font-family:inherit;font-size:11pt;">that at the time of issuance thereof and after giving effect to the issuance thereof and to the application of the proceeds thereof:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:96px;text-indent:168px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(A)&#160;&#160;&#160;&#160;Consolidated Funded Debt shall not exceed 66-2/3% of Total Capitalization; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:96px;text-indent:168px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(B)&#160;&#160;&#160;&#160;Consolidated Net Income Available for Interest Charges for any period of 12 consecutive calendar months within the 15 consecutive calendar months immediately preceding the issuance of such Funded Debt shall be equal to or exceed 175% of Pro Forma Interest Charges;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(5)&#160;&#160;&#160;&#160;Debt of a Restricted Subsidiary to the Company;</font></div><br><div><div style="line-height:140%;text-align:left;text-indent:312px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">&#160;&#160;&#160;&#160;</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(6)&#160;&#160;&#160;&#160;any other Debt of Restricted Subsidiaries; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided </font><font style="font-family:inherit;font-size:11pt;">that at the time of issuance thereof and after giving effect to the issuance thereof and to the application of the proceeds thereof, the aggregate unpaid principal amount of all Debt of Restricted Subsidiaries other than Debt of Restricted Subsidiaries to the Company, shall not exceed 10% of Consolidated Debt;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(7)&#160;&#160;&#160;&#160;any other Indebtedness of the Company which is not Debt;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(8)&#160;&#160;&#160;&#160;any other Indebtedness of Restricted Subsidiaries which is not Debt; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(9)&#160;&#160;&#160;&#160;Indebtedness incurred to refinance or refund the Indebtedness allowed under clauses (1) to (6) of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.6(a)</font><font style="font-family:inherit;font-size:11pt;">&#32;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided </font><font style="font-family:inherit;font-size:11pt;">that at the time of issuance thereof and after giving effect to the issuance thereof and to the application of proceeds thereof, such refinancing or refunding will not increase the previously existing principal amount of the Indebtedness outstanding.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;Any corporation which becomes a Restricted Subsidiary after the Execution Date shall for all purposes of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.6</font><font style="font-family:inherit;font-size:11pt;">&#32;be deemed to have created, assumed, guaranteed or incurred at the time it becomes a Restricted Subsidiary all Indebtedness of such corporation existing immediately after it becomes a Restricted Subsidiary.</font></div><a name="s90ff5d0dd279455289a5679147e05669"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.7.  Limitation on Liens</font><font style="font-family:inherit;font-size:11pt;">.   The Company will not, and will not permit any Restricted Subsidiary to, create or incur, or suffer to be incurred or to exist, any Lien on its or their property or assets, whether now owned or hereafter acquired, or upon any income or profits therefrom, or transfer any property for the purpose of subjecting the same to the payment of obligations in priority to the payment of its or their general creditors, or acquire or agree to acquire, or permit any Restricted Subsidiary to acquire, any property or assets upon conditional sales agreements or other title retention devices, without making effective provisions whereby all of the Notes shall be directly secured equally and ratably with all of the other obligations secured thereby (and providing to the holders of the Notes an opinion satisfactory in form and substance to the holders of the Notes from counsel satisfactory to the holders of the Notes to the effect that the Notes are so secured) except:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;Liens for property taxes and assessments or governmental charges or levies and Liens securing claims or demands of mechanics and materialmen, provided that payment thereof is not at the time required by </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.3</font><font style="font-family:inherit;font-size:11pt;">;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;Liens of or resulting from any judgment or award, the time for the appeal or petition for rehearing of which shall not have expired, or in respect of which the Company or a Restricted Subsidiary shall at any time in good faith be prosecuting an appeal or proceeding for a review and in respect of which a stay of execution pending such appeal or proceeding for review shall have been secured;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;Liens incidental to the conduct of business or the ownership of properties and assets (including but not limited to warehousemen&#8217;s and attorneys&#8217; liens and statutory landlords&#8217; liens) and specific Liens including but not limited to pledges of Securities to secure deposits, and other Liens </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">10</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">incurred in the ordinary course of business and not in connection with the borrowing of money, provided in each case the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate actions or proceedings the effect of which is to stay or prevent enforcement of such Lien;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;minor survey exceptions or minor encumbrances, easements or reservations, or rights of others for rights-of-way, utilities and other similar purposes, or zoning or other restrictions as to the use of real properties, which are necessary for the conduct of the activities of the Company and its Restricted Subsidiaries or which customarily exist on properties of corporations engaged in similar activities and similarly situated and which do not in any event, individually or in the aggregate, materially impair their use in the operation of the business of the Company and its Restricted Subsidiaries;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(e)&#160;&#160;&#160;&#160;Liens existing on fixed assets at the time of acquisition thereof by the Company or a Restricted Subsidiary or Liens existing on fixed assets owned by a business entity at the time such entity is acquired by the Company or a Restricted Subsidiary, provided that (i)&#160;any such Lien shall attach only to the fixed assets so acquired or to the fixed assets owned by the business entity so acquired, as the case may be, (ii)&#160;the Lien and the Indebtedness secured thereby shall not have been incurred in contemplation of the acquisition, and (iii)&#160;all Indebtedness secured by any such Lien shall have been incurred within the applicable limitations of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.6</font><font style="font-family:inherit;font-size:11pt;">;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(f)&#160;&#160;&#160;&#160;in the event of a consolidation or merger of the Company in compliance with </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.10(a)(3)</font><font style="font-family:inherit;font-size:11pt;">&#32;where the surviving corporation is not the Company (the surviving corporation being the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Acquiring Corporation&#8221;</font><font style="font-family:inherit;font-size:11pt;">), Liens existing on assets of the Acquiring Corporation and its subsidiaries at the time of the consolidation or merger, as the case may be, so long as (i)&#160;the Lien shall attach only to the assets to which the Lien was attached at the time of the consolidation or merger, and (ii)&#160;the Lien and the Indebtedness secured thereby shall not have been incurred in contemplation of such consolidation or merger;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(g)&#160;&#160;&#160;&#160;Liens securing Indebtedness of a Restricted Subsidiary to the Company;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(h)&#160;&#160;&#160;&#160;Liens existing as of the Execution Date and reflected in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;IV</font><font style="font-family:inherit;font-size:11pt;">&#32;hereto;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(i)&#160;&#160;&#160;&#160;Liens incurred after the Execution Date given to secure the payment of the purchase price incurred in connection with the acquisition of fixed assets useful and intended to be used in carrying on the business of the Company or a Restricted Subsidiary, including Capitalized Leases, provided that (i)&#160;the Lien shall attach solely to the fixed assets purchased, (ii)&#160;at the time of acquisition of such fixed assets, the aggregate amount remaining unpaid on all Indebtedness secured by Liens on such fixed assets whether or not assumed by the Company or a Restricted Subsidiary shall not exceed an amount equal to 100% of the lesser of the total purchase price or fair market value at the time of acquisition of such fixed assets (as determined in good faith by the Board of Directors of the Company), (iii)&#160;the aggregate of all amounts so financed outstanding at any time on and after the Execution Date by the Company and its Restricted Subsidiaries shall not exceed the greater of </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">11</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(A)&#160;$10,000,000 or (B)&#160;10% of Consolidated Net Worth, and (iv)&#160;all such Indebtedness shall have been incurred within the applicable limitations provided in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.6</font><font style="font-family:inherit;font-size:11pt;">;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(j)&#160;&#160;&#160;&#160;Liens on the property of the Company securing the Company&#8217;s mortgage bonds issued pursuant to a mortgage bond indenture or other governing instrument, </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided,</font><font style="font-family:inherit;font-size:11pt;">&#32;that (A)&#160;such mortgage bond indenture or governing instrument shall have been consented to in writing by the holders of at least 66-2/3% in aggregate principal amount of the outstanding Notes and (B)&#160;provision shall have been made concurrently with the issuance of any such mortgage bonds for the Notes to be equally and ratably secured by the Lien securing such mortgage bonds; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(k)&#160;&#160;&#160;&#160;renewals and extensions of Liens permitted pursuant to clauses (a) through (j) of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.7</font><font style="font-family:inherit;font-size:11pt;">&#32;given to secure the renewal, extension or replacement of the Indebtedness secured thereby without increase in the principal amount of such Indebtedness outstanding at the time of such renewal, extension or replacement, which Liens attach solely to the property theretofore securing such Indebtedness.  </font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">In case any property or assets of the Company or any of its Restricted Subsidiaries is subjected to a Lien in violation of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.7</font><font style="font-family:inherit;font-size:11pt;">, the holders of the Notes shall immediately have and enjoy the benefit of an equitable Lien on such property and assets, securing the Notes, to the full extent that, and with such priority as, the holders may be entitled to under applicable law.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Notwithstanding the foregoing provisions of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.7</font><font style="font-family:inherit;font-size:11pt;">, the Company shall not, and shall not permit any Restricted Subsidiary to, create or incur, or suffer to be incurred or to exist, any Lien securing obligations owing under any Material Credit Facility on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company or any Restricted Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or provide any Guaranty of such obligations, unless the Company or such Restricted Subsidiary makes effective provision whereby the Notes shall be equally and ratably secured or guarantied with all such obligations pursuant to such agreements (including, without limitation, an intercreditor agreement), certificates, legal opinions, showings and other instruments reasonably satisfactory to the holders as such holders may reasonably require to evidence and retain the pari passu ranking of the obligations of  the Company and its Restricted Subsidiaries with respect to the Notes and such Material Credit Facility.</font></div><a name="sa878635ca5954420be1ecc3a4aca2919"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.8.  Restricted Payments</font><font style="font-family:inherit;font-size:11pt;">.   The Company will not and will not permit any of its Restricted Subsidiaries to:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;Declare or pay any dividend or other distribution, either in cash or property, on any shares of its capital stock of any class (except dividends or other distributions payable solely in shares of capital stock of the Company or any dividends or distributions payable by a Restricted Subsidiary to a Wholly-Owned Restricted Subsidiary or to the Company);</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;Directly or indirectly, or through any Subsidiary, purchase, redeem, retire or acquire any shares of its capital stock of any class or any warrants, rights or options to purchase or acquire </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">12</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">any shares of its capital stock (other than repurchases of capital stock of the Company from employees who leave or retire from the Company or any Restricted Subsidiary); or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;Directly or indirectly, or through any Subsidiary, defease, redeem, repurchase or otherwise acquire or retire prior to maturity any Indebtedness ranked subordinate in right of payment to the Notes; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;Make any other payment or distribution, either directly or indirectly or through any Subsidiary, in respect of its capital stock (except as permitted in clauses </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">(a)</font><font style="font-family:inherit;font-size:11pt;">&#32;or </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">(b)</font><font style="font-family:inherit;font-size:11pt;">&#32;of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 5.8</font><font style="font-family:inherit;font-size:11pt;">);</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(such declarations or payments of dividends, purchases, redemptions or retirements of capital stock and warrants, rights or options, such defeasances, redemptions, repurchases, acquisitions or retirements of Indebtedness and all such other payments or distributions being herein collectively called </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Restricted Payments</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">) if after giving effect thereto the aggregate amount of Restricted Payments after December&#160;31, 1991 to and including the date of the making of the Restricted Payment in question would exceed (i)&#160;100% of Consolidated Net Income for such period, computed on a cumulative basis for said entire period, </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">plus</font><font style="font-family:inherit;font-size:11pt;">&#32;(ii)&#160;the aggregate net proceeds received by the Company from the sale subsequent to the Execution Date of shares of its capital stock or conversion of its Securities into such shares, </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">plus</font><font style="font-family:inherit;font-size:11pt;">&#32;(iii)&#160;$20,000,000.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Nothing contained in the foregoing provisions of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.8</font><font style="font-family:inherit;font-size:11pt;">&#32;shall prohibit the Company from making scheduled payments of dividends on and redemptions of preferred stock of the Company, </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided</font><font style="font-family:inherit;font-size:11pt;">&#32;that no Default or Event of Default shall have occurred and be continuing, but all such payments shall be taken into account in calculating the permitted amount of Restricted Payments which the Company or its Restricted Subsidiaries may make from time to time.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The Company will not declare any dividend which constitutes a Restricted Payment payable more than 90&#160;days after the date of declaration thereof.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">In addition to the foregoing restrictions, the Company will not declare or make any Restricted Payment either in cash or property nor will the Company pay dividends on or redeem any of its preferred stock if, after giving effect thereto, a Default or an Event of Default shall have occurred and be continuing.  </font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">For the purposes of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.8</font><font style="font-family:inherit;font-size:11pt;">, the amount of any Restricted Payment declared, paid or distributed in property shall be deemed to be the greater of the book value or fair market value (as determined in good faith by the Board of Directors of the Company) of such property at the time of the making of the Restricted Payment in question.</font></div><a name="s6bb4f5656c4844dd9067fad2bf57b84f"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.9.  Investments</font><font style="font-family:inherit;font-size:11pt;">.   The Company will not, and will not permit any Restricted Subsidiary to, make or have outstanding any Investments, other than:</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">13</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;Investments by the Company and its Restricted Subsidiaries in and to Restricted Subsidiaries, including any Investment in a corporation which concurrently with such Investment, will become a Restricted Subsidiary;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;Investments in direct obligations of the United States of America or any agency or instrumentality of the United States of America, the payment or guarantee of which constitutes a full faith and credit obligation of the United States of America, in either case, maturing in 12 months or less from the date of acquisition thereof;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;Investments in certificates of deposit maturing within one year from the date of acquisition thereof, issued by a bank or trust company organized under the laws of the United States or any state thereof, having capital, surplus and undivided profits aggregating at least $200,000,000 and whose long-term certificates of deposit are, at the time of acquisition thereof, rated &#8220;A&#8221; or better by S&amp;P or &#8220;A2&#8221; or better by Moody&#8217;s;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;Investments in commercial paper maturing in 270&#160;days or less from the date of issuance which, at the time of acquisition by the Company or any Restricted Subsidiary, is accorded the highest rating by S&amp;P or Moody&#8217;s or is issued by a corporation organized under the laws of the United States or any state thereof with outstanding corporate debt obligations which are rated &#8220;AA&#8221; or better by S&amp;P, or &#8220;Aa2&#8221; or better by Moody&#8217;s;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(e)&#160;&#160;&#160;&#160;receivables arising from the sale of goods and services in the ordinary course of business of the Company and its Restricted Subsidiaries;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(f)&#160;&#160;&#160;&#160;Investments in Securities received in settlement of any Indebtedness arising in the ordinary course of business of the Company or any Restricted Subsidiary, </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided </font><font style="font-family:inherit;font-size:11pt;">that the aggregate amount of all such Investments at any time outstanding shall not exceed the greater of (A) $5,000,000 or (B) 5% of Consolidated Net Worth;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(g)&#160;&#160;&#160;&#160;Investments in (i)&#160;money market mutual funds, (ii)&#160;mutual funds invested primarily in corporate debt obligations which are rated &#8220;AA&#8221; or better by S&amp;P or &#8220;Aa2&#8221; or better by Moody&#8217;s, and (iii)&#160;corporate debt obligations rated &#8220;AA&#8221; or better by S&amp;P or &#8220;Aa2&#8221; or better by Moody&#8217;s, or preferred stock of any such Person; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided</font><font style="font-family:inherit;font-size:11pt;">, that in no event shall (x) any&#160;such corporate debt obligations&#160;held outside a mutual fund&#160;be in the form of adjustable or variable rate securities&#160; and (y) more than 5% of the assets of any such mutual fund&#160;be in the form of adjustable or variable rate securities; and </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided, further,</font><font style="font-family:inherit;font-size:11pt;">&#32;that the aggregate of all Investments referred to in this</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;Section&#160;5.9(g)</font><font style="font-family:inherit;font-size:11pt;">&#32;shall not exceed 7.5% of Consolidated Net Worth; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(h)&#160;&#160;&#160;&#160;other Investments (in addition to those permitted by the foregoing provisions of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.9</font><font style="font-family:inherit;font-size:11pt;">), </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided</font><font style="font-family:inherit;font-size:11pt;">&#32;that at the time of acquisition thereof the aggregate amount of all such other Investments owned by the Company and its Restricted Subsidiaries shall not exceed an amount equal to 10% of Consolidated Net Worth.</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">14</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">In addition to the foregoing restrictions, the Company will not, and will not permit any Restricted Subsidiary to, make any Investments, other than Investments described in clauses (a) through (f) of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.9</font><font style="font-family:inherit;font-size:11pt;">, if, after giving effect thereto, a Default or an Event of Default shall have occurred and be continuing.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">In valuing any Investments for the purpose of applying the limitations set forth in this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.9</font><font style="font-family:inherit;font-size:11pt;">, such Investments shall be taken at the original cost thereof, without allowance for any subsequent write-offs or appreciation or depreciation therein, but less any amount repaid or recovered on account of capital or principal, except that for purposes of computing Consolidated Net Worth and Consolidated Total Assets, Investments shall be valued in accordance with generally accepted accounting principles.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">For purposes of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.9</font><font style="font-family:inherit;font-size:11pt;">, at any time when a corporation becomes a Restricted Subsidiary, all Investments of such corporation at such time shall be deemed to have been made by such corporation, as a Restricted Subsidiary, at such time.</font></div><a name="sca1c0aefbcf747628d4277db1cef4099"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.10.  Mergers, Consolidations and Sales of Assets</font><font style="font-family:inherit;font-size:11pt;">.   (a)&#160;The Company will not, and will not permit any Restricted Subsidiary to, (i)&#160;consolidate with or be a party to a merger with any other corporation or (ii)&#160;sell, lease or otherwise dispose of all or any substantial part (as defined in paragraph (d) of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.10</font><font style="font-family:inherit;font-size:11pt;">) of the assets of the Company and its Restricted Subsidiaries, </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided, however,</font><font style="font-family:inherit;font-size:11pt;">&#32;that:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(1)&#160;&#160;&#160;&#160;any Restricted Subsidiary may merge or consolidate with or into the Company or any other Restricted Subsidiary so long as in any merger or consolidation involving the Company, the Company shall be the surviving or continuing corporation;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(2)&#160;&#160;&#160;&#160;any Restricted Subsidiary may merge or consolidate with any other corporation so long as the surviving or continuing corporation shall be a Restricted Subsidiary;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(3)&#160;&#160;&#160;&#160;the Company may consolidate or merge with any other corporation so long as (i)&#160;the corporation which results from such merger or consolidation shall be incorporated under the laws of the United States or any state thereof, have substantially all of its assets and the assets of its Subsidiaries located within the United States and be engaged principally in the ownership and operation of a regulated public utility, (ii)&#160;the resulting corporation, if other than the Company, shall execute and deliver to the registered holders of the Notes an agreement satisfactory in form and substance to such holders ratifying and confirming this Agreement and the Notes and expressly assuming the due and punctual payment of the principal and Make&#8209;Whole Amount, if any, and interest on all of the Notes, according to their tenor, and the due and punctual performance and observance of all of the covenants in the Notes and this Agreement to be performed and observed by the Company, (iii)&#160;at the time of such consolidation or merger and after giving effect thereto no Default or Event of Default shall have occurred and be continuing, (iv)&#160;after giving effect to such consolidation or merger the surviving corporation would be permitted to incur at least $1.00 of additional Funded Debt pursuant to paragraph (4) of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.6(a)</font><font style="font-family:inherit;font-size:11pt;">, and (v)&#160;the surviving corporation shall deliver to the registered holders of the Notes an opinion, satisfactory in form and substance to </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">15</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">the registered holders of the Notes, of counsel satisfactory to the registered holders of the Notes, to the effect that all requirements of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.10(a)(3)</font><font style="font-family:inherit;font-size:11pt;">&#32;have been satisfied; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(4)&#160;&#160;&#160;&#160;nothing contained herein shall apply to or operate to prevent the sale of any property of the Company or any Restricted Subsidiary taken by eminent domain or sold in lieu of, and in reasonable anticipation of, a taking by eminent domain.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;Except for the purpose of qualifying directors, the Company will not permit any Restricted Subsidiary to issue or sell (i)&#160;any shares of preferred stock of such Restricted Subsidiary or any Indebtedness of such Restricted Subsidiary to any Person other than the Company or another Restricted Subsidiary, or (ii)&#160;any shares of common stock of such Restricted Subsidiary to any Person other than the Company, another Restricted Subsidiary or another Person who was a holder of such common stock at the time such Restricted Subsidiary became a Restricted Subsidiary and who holds validly pre-existing preemptive rights to acquire such common stock and to whom such common stock is issued (x)&#160;solely in satisfaction of such pre-existing preemptive rights and (y)&#160;solely in connection with the simultaneous issuance of stock to the Company and/or a Restricted Subsidiary whereby the Company and/or such Restricted Subsidiary maintain their same proportionate interest in such Restricted Subsidiary, or (iii)&#160;any shares of stock of any other class (including as </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;stock&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;for the purposes of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.10(b)</font><font style="font-family:inherit;font-size:11pt;">, any warrants, rights or options to purchase or otherwise acquire stock or other securities exchangeable for or convertible into stock).</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;Except as otherwise expressly provided in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.10(e)</font><font style="font-family:inherit;font-size:11pt;">&#32;the Company will not sell, transfer or otherwise dispose of any shares of stock of any Restricted Subsidiary (except for directors&#8217; 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the Restricted Subsidiary being disposed of shall not have any continuing investment in the Company or any other Restricted Subsidiary not being simultaneously disposed of; and</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">16</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(5)&#160;&#160;&#160;&#160;such sale or other disposition does not involve a substantial part (as hereinafter defined) of the assets of the Company and its Restricted Subsidiaries.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;As used in this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.10</font><font style="font-family:inherit;font-size:11pt;">, a sale, lease or other disposition of stock of a Restricted Subsidiary or assets shall be deemed to be a </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;substantial part</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;of the assets of the Company and its Restricted Subsidiaries if either:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(1)&#160;&#160;&#160;&#160;after eliminating the portions of Consolidated Net Income (excluding losses) which were contributed, during the four quarterly fiscal periods immediately preceding such sale, lease or other disposition for which figures are available, by (x)&#160;such Restricted Subsidiary or assets, (y)&#160;each other Restricted Subsidiary which has been disposed of during such four quarterly fiscal periods and (z)&#160;other assets of the Company and its Restricted Subsidiaries disposed of during such four quarterly fiscal periods (other than the sale, abandonment or other disposition of inventory in the ordinary course of business), the Company could not have incurred $1.00 of additional Funded Debt pursuant to paragraph (4) of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.6(a)</font><font style="font-family:inherit;font-size:11pt;">&#32;or declared or made a Restricted Payment pursuant to </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.8</font><font style="font-family:inherit;font-size:11pt;">&#32;as of the last day of such four quarterly fiscal periods; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(2)&#160;&#160;&#160;&#160;the book value of the stock of such Restricted Subsidiary or such assets, when added to the book value of all other assets sold, leased or otherwise disposed of by the Company and its Restricted Subsidiaries (other than in the ordinary course of business) during the 12-month period ending on the date of such proposed sale, lease or other disposition, exceeds 10% of Consolidated Total Assets, determined as of the end of the immediately preceding fiscal year.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(e)&#160;&#160;&#160;&#160;The provisions of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.10</font><font style="font-family:inherit;font-size:11pt;">&#32;shall not apply or operate to prevent any sale or other disposition of a substantial part of the assets of the Company and its Restricted Subsidiaries if written notice to the holders of the Notes is given within 60&#160;days after the effective date of such sale or other disposition (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Sale Date&#8221;</font><font style="font-family:inherit;font-size:11pt;">) describing such sale or other disposition in reasonable detail and setting forth a computation of the net proceeds which have been received by the Company and either:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(1)&#160;&#160;&#160;&#160;the Company offers to apply such net proceeds, if any, to the pro rata redemption of the Notes and other senior Funded Debt of the Company on that date (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Redemption Date&#8221;</font><font style="font-family:inherit;font-size:11pt;">) which is not more than 120&#160;days after the Sale Date at the price required by </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;2.3</font><font style="font-family:inherit;font-size:11pt;">&#32;together with accrued interest thereon to the Redemption Date and makes the tendered redemption of all Notes and other senior Funded Debt of the Company held by holders who have accepted such tender by notice in writing given to the Company not less than 30&#160;days prior to the Redemption Date, or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(2)&#160;&#160;&#160;&#160;within 180 days after the Sale Date, the Company reinvests such net proceeds in other properties or assets which are not encumbered by Liens which are not permitted under </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.7</font><font style="font-family:inherit;font-size:11pt;">&#32;and which are to be used by, or are useful to, the Company or a Restricted Subsidiary in its normal business activities, provided that if the assets as sold were unencumbered, the assets purchased with such net proceeds shall be unencumbered.</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">17</font></div></div><hr style="page-break-after:always"><a name="s4d7d48dc82954dddba7c370ec8149432"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.11.  Guaranties</font><font style="font-family:inherit;font-size:11pt;">.   The Company will not, and will not permit any Restricted Subsidiary to, become or be liable in respect of any Guaranty except Guaranties by the Company or a Restricted Subsidiary (so long as </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 5.7</font><font style="font-family:inherit;font-size:11pt;">&#32;is complied with) which are limited in amount to a stated maximum dollar exposure and included in Consolidated Indebtedness.  </font></div><a name="s7953610bc4834801b520df444bbc9efa"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.12.  Acquisition of Notes</font><font style="font-family:inherit;font-size:11pt;">.   Neither the Company nor any Restricted Subsidiary or Affiliate, directly or indirectly, may acquire or make any offer to acquire any Notes unless an offer has been made to acquire Notes, pro rata, from all holders of the Notes at the same time and upon the same terms.  In case the Company, any Restricted Subsidiary or any Affiliate acquires any Notes, such Notes shall immediately thereafter be cancelled and no Notes shall be issued in substitution therefor.  Without limiting the foregoing, upon the purchase or other acquisition of any Notes by the Company, any Restricted Subsidiary or any Affiliate, such Notes shall no longer be outstanding for purposes of any section of this Agreement relating to the taking by the holders of the Notes of any actions with respect thereto.</font></div><a name="s90d1403e3ad84d57ab8f2d7ef5e910a9"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.13.  Transactions with Affiliates</font><font style="font-family:inherit;font-size:11pt;">.   The Company will not, and will not permit any Restricted Subsidiary to, enter into or be a party to any transaction, arrangement or understanding with any Affiliate (including, without limitation, the purchase from, sale to or exchange of property with, or the rendering of any service by or for, any Affiliate), except on reasonable terms no less favorable to the Company or such Restricted Subsidiary than would be obtained in a comparable arm&#8217;s-length transaction with a Person other than an Affiliate.</font></div><a name="s26d77953283440eeaf01f18172cbf0cf"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.14.  [Reserved]</font><font style="font-family:inherit;font-size:11pt;">.  </font></div><a name="s5880ed33fd9543d388daf6f4367f697e"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.15.  Hazardous Material</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;&#32;Neither the Company nor any Subsidiary shall cause or permit any Hazardous Material to exist on or discharge from any property owned or used by the Company or any Subsidiary which would result in any Lien upon any of its properties (whether originating thereon or migrating to such property from other property).  The Company shall promptly: (A)&#160;pay any claim against the Company or any Subsidiary or any of such properties, (B)&#160;remove any Lien upon any such property, and (C)&#160;indemnify and hold each Purchaser harmless from any and all loss, damage or expense, including the fees and expenses of any environmental engineering or clean-up firm, resulting from any Hazardous Material which exists on or is discharged from any such properties.  The Company shall notify each Purchaser of any condition or occurrence at, on, or arising from any such properties that results in noncompliance with any Environmental Law within ten days after the Company first has knowledge of such condition or occurrence.  The Company and each Subsidiary shall comply, and cause each of its properties to comply with all Environmental Laws, and shall promptly undertake or cause to be undertaken any cleanup, removal, remedial or other action required by Hazardous Material discharged from any of its properties.  Notwithstanding the foregoing provisions of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.15</font><font style="font-family:inherit;font-size:11pt;">, none of the aforementioned events or circumstances shall constitute a default by the Company in its obligations hereunder unless such event or circumstance could have a material adverse effect on the business or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole.  In addition, nothing in this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.15</font><font style="font-family:inherit;font-size:11pt;">&#32;shall be deemed to prevent the Company from contesting any such claim or Lien in good faith by appropriate proceedings which will prevent the forfeiture or sale of </font></div><br><div><div style="line-height:140%;text-align:left;text-indent:312px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">&#160;&#160;&#160;&#160;</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">any property of the Company or any Subsidiary or any material interference with the use thereof by the Company or such Subsidiary.</font></div><a name="s85b66c1ef5894af38839c8d9e24197c2"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;5.16.  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The Company will keep, and will cause each Restricted Subsidiary to keep, proper books of record and account in which full and correct entries will be made of all dealings or transactions of, or in relation to, the business and affairs of the Company or such Restricted Subsidiary, in accordance in all material respects with generally accepted accounting principles consistently applied (except for changes disclosed in the financial statements furnished to holders of the Notes pursuant to this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.16</font><font style="font-family:inherit;font-size:11pt;">&#32;and concurred in by the independent public accountants referred to in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.16(b)</font><font style="font-family:inherit;font-size:11pt;">&#32;hereof), and will furnish to each Purchaser prior to the Closing Date and, from and after the Closing Date, to each Purchaser so long as such Purchaser is the holder of any Note and to each other Institutional Holder of any then outstanding Note (herein, together with such Purchasers called </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;an Entitled Holder&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">) </font><font style="font-family:inherit;font-size:11pt;">(in duplicate if so specified below or otherwise requested):</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Quarterly Statements</font><font style="font-family:inherit;font-size:11pt;">.  As soon as available and in any event within 45&#160;days after the end of each quarterly fiscal period (except the last) of each fiscal year, copies of:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:96px;text-indent:168px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(1)&#160;&#160;&#160;&#160;consolidated and consolidating balance sheets of the Company and its Restricted Subsidiaries as of the end of such quarterly fiscal period, setting forth in comparative form the consolidated and consolidating figures for the end of the preceding fiscal year then most recently ended,</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:96px;text-indent:168px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(2)&#160;&#160;&#160;&#160;consolidated and consolidating statements of income and retained earnings of the Company and its Restricted Subsidiaries for such quarterly fiscal period and for the portion of the fiscal year ending with such quarterly fiscal period, in each case setting forth in comparative form the consolidated and consolidating figures for the corresponding periods of the preceding fiscal year, and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:96px;text-indent:168px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(3)&#160;&#160;&#160;&#160;consolidated and consolidating statements of cash flows of the Company and its Restricted Subsidiaries for the portion of the fiscal year ending with such quarterly fiscal period, setting forth in comparative form the consolidated and consolidating figures for the corresponding period of the preceding fiscal year,</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">all in reasonable detail and certified as complete and correct by an authorized financial officer of the Company;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Annual Statements</font><font style="font-family:inherit;font-size:11pt;">.  As soon as available and in any event within 90&#160;days after the close of each fiscal year of the Company, copies of:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:96px;text-indent:168px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(1)&#160;&#160;&#160;&#160;consolidated and consolidating balance sheets of the Company and its Restricted Subsidiaries as of the close of such fiscal year, and</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">19</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:96px;text-indent:168px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(2)&#160;&#160;&#160;&#160;consolidated and consolidating statements of income, changes in shareholders&#8217; equity, and cash flows of the Company and its Restricted Subsidiaries for such fiscal year,</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">in each case setting forth in comparative form the consolidated and consolidating figures for the preceding fiscal year, all in reasonable detail and accompanied by an opinion thereon of a firm of independent public accountants of recognized national standing selected by the Company and reasonably satisfactory to the Entitled Holders to the effect that the consolidated financial statements have been prepared in accordance with generally accepted accounting principles and present fairly the consolidated financial position of the Company and its Restricted Subsidiaries as of the end of the fiscal year being reported on and the consolidated results of the operations and cash flows for said year and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards and included such tests of the accounting records and such other auditing procedures as said accountants deemed necessary in the circumstances;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Audit Reports</font><font style="font-family:inherit;font-size:11pt;">.  Promptly upon receipt thereof, one copy of each interim or special audit made by independent public accountants of the financial statements of the Company or any Restricted Subsidiary;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">SEC and Other Reports</font><font style="font-family:inherit;font-size:11pt;">.  Promptly upon their becoming available: (i)&#160;one copy of each financial statement, report, notice or proxy statement sent by the Corporation or the Company to its respective stockholders generally and of each regular or periodic report, and any registration statement or prospectus filed by the Corporation, the Company or any Subsidiary with any securities exchange or the Securities and Exchange Commission or any successor agency (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;SEC&#8221;</font><font style="font-family:inherit;font-size:11pt;">); (ii)&#160;one copy of each annual report filed with the Public Utilities Commission of the State of California; and (iii)&#160;copies of (A)&#160;any orders in any proceedings to which the Company or any of its Subsidiaries is a party, issued by any governmental agency, Federal or state, having jurisdiction over the Company or any of its Subsidiaries and (B)&#160;any reports, applications or other documents filed with the Public Utilities Commission of the State of California or any other governmental agency, Federal or state, which (in the case of each of the matters referred to in subclause (A) and (B)) individually or in the aggregate, could have, or reflect facts or circumstances which could have, a material adverse effect upon the business or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole or the Company&#8217;s or any Subsidiary&#8217;s ability to comply with this Agreement and the Notes; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided, however,</font><font style="font-family:inherit;font-size:11pt;">&#32;that during any periods when the Corporation is not required to file financial statements with the SEC, the Corporation shall then furnish to each Entitled Holder consolidated quarterly and annual financial statements of the Corporation and its Subsidiaries within the respective periods provided in paragraphs&#160;(a) and (b) above;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(e)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">ERISA Reports</font><font style="font-family:inherit;font-size:11pt;">.  Promptly upon the occurrence thereof, written notice of (i)&#160;a Reportable Event with respect to any Plan (except that, with respect to any Reportable Event as to which the PBGC has waived the generally applicable 30 day notice requirement, such written notice </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">20</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">to the Entitled Holder may be given at any time simultaneously with or prior to the time that notice is required to be given to the PBGC in the Company&#8217;s Annual Report &#8211; Form 5500); (ii)&#160;the institution of any steps by the Company, any ERISA Affiliate, the PBGC or any other person to terminate any Plan subject to Title IV of ERISA, (iii)&#160;the institution of any steps by the Company or any ERISA Affiliate to withdraw from any Plan subject to Title IV of ERISA; (iv)&#160;a non-exempt </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;prohibited transaction&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;within the meaning of Section&#160;406 of ERISA in connection with any Plan that could result in material liability to the Company or a Restricted Subsidiary; (v)&#160;any material increase in the contingent liability of the Company or any Restricted Subsidiary with respect to any post-retirement welfare liability; or (vi)&#160;the taking of any action by, or the threatening of the taking of any action by, the Internal Revenue Service, the Department of Labor or the PBGC with respect to any of the foregoing;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(f)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Officer&#8217;s Certificates</font><font style="font-family:inherit;font-size:11pt;">. Within the periods provided in paragraphs (a) and (b) above, a certificate of an authorized financial officer of the Company stating that such officer has reviewed the provisions of this Agreement and (i)&#160;stating that the Company is in full compliance with this Agreement and the Notes, (ii)&#160;setting forth (A)&#160;the information and computations (in sufficient detail) required in order to establish whether the Company was in compliance with the requirements of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.6</font><font style="font-family:inherit;font-size:11pt;">&#32;through </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.11</font><font style="font-family:inherit;font-size:11pt;">&#32;during the period covered by the financial statements then being furnished, and (B)&#160;stating whether there existed as of the date of such financial statements and whether, to the best of such officer&#8217;s knowledge, there exists on the date of the certificate or existed at any time during the period covered by such financial statements any Default or Event of Default and, if any such condition or event exists on the date of the certificate, specifying the nature and period of existence thereof and the action the Company is taking and proposes to take with respect thereto;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(g)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Accountant&#8217;s Certificates</font><font style="font-family:inherit;font-size:11pt;">.  Within the period provided in paragraph (b) above, a certificate of the accountants who render an opinion with respect to such financial statements, stating that they have reviewed the Notes and this Agreement and stating further whether, in making their audit, such accountants have become aware of any Default or Event of Default under any of the terms or provisions thereof, and if any such condition or event then exists, specifying the nature and period of existence thereof, it being understood and agreed that such accountants shall not be liable to any Person by reason of their failure to obtain knowledge of any Default or Event of Default that would not be disclosed in the course of an audit conducted in accordance with generally accepted auditing standards; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(h)&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Requested Information</font><font style="font-family:inherit;font-size:11pt;">.  With reasonable promptness, such other data and information as any Entitled Holder may reasonably request.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Without limiting the foregoing, the Company will permit each Entitled Holder of any then outstanding Note (or such Persons as such Entitled Holder may designate), to visit and inspect, any of the properties of the Company or any Restricted Subsidiary, to examine all of their books of account, records, reports and other papers, to make copies and extracts therefrom and to discuss their respective affairs, finances and accounts </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">21</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss with such Entitled Holder the finances and affairs of the Company and its Restricted Subsidiaries), all at such reasonable times and as often as may be reasonably requested.  If a Default has occurred and is continuing hereunder, the cost of such inspection, including the reasonable fees and expenses of any attorneys or accountants employed by the Purchasers for such purpose, shall be paid by the Company.</font></div><a name="s906b246896dc43c59e74b2831162fb12"></a><table cellpadding="0" cellspacing="0" style="padding-top:21px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:112px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SECTION&#160;6.</font></div></td><td style="vertical-align:top;padding-left:1.3333333333333333px;"><div style="line-height:140%;text-align:left;font-size:11pt;text-indent:-1.3333333333333333px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">EVENTS OF DEFAULT AND REMEDIES THEREFOR</font><font style="font-family:inherit;font-size:11pt;">.</font></div></td></tr></table><a name="s8809a461ad8545d987c7d581670766ab"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;6.1.   Events of Default</font><font style="font-family:inherit;font-size:11pt;">&#160;&#160;&#160;&#160;.   Any one or more of the following shall constitute an </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Event of Default&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">as such term is used herein:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;Default shall occur in the payment of interest on any Note when the same shall have become due and such default shall continue for more than 10 days; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;Default shall occur in the making of any payment of the principal of any Note or Make&#8209;Whole Amount, if any, thereon at the expressed or any accelerated maturity date or at any date fixed for prepayment; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;Default shall be made in the payment as and when the same shall become due and payable (whether by lapse or time, by declaration, by call for redemption or otherwise) of the principal of or interest on any Indebtedness (other than the Notes) of the Company or any Restricted Subsidiary for borrowed money, in an aggregate amount exceeding $1,000,000, and such default shall continue beyond the period of grace, if any, allowed with respect thereto; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;Default or the happening of any event shall occur under any indenture, agreement or other instrument under which any Indebtedness of the Company or any Restricted Subsidiary for borrowed money, in an aggregate amount exceeding $2,000,000 may be issued, and such default or event shall continue for a period of time sufficient to permit the acceleration of the maturity of any such Indebtedness of the Company or any Restricted Subsidiary outstanding thereunder; or as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), (i)&#160;the Company or any Restricted Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $2,000,000, or (ii)&#160;one or more Persons have the right to require the Company or any Subsidiary so to purchase or repay such Indebtedness; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(e)&#160;&#160;&#160;&#160;Default shall occur in the observance or performance of any covenant or agreement contained in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.6</font><font style="font-family:inherit;font-size:11pt;">&#32;through </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.11</font><font style="font-family:inherit;font-size:11pt;">, other than any such default which is cured no later than five days after such default shall first become known to any Responsible Officer of the Company; or</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">22</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(f)&#160;&#160;&#160;&#160;Default shall occur in the observance or performance of any other provision of this Agreement which is not remedied within 30&#160;days after such default shall first become known to any Responsible Officer of the Company; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(g)&#160;&#160;&#160;&#160;Any representation or warranty made by the Company herein, or made by the Company in any statement or certificate furnished by the Company in connection with the consummation of the issuance and delivery of the Notes or furnished by the Company pursuant hereto, is untrue in any material respect as of the date of the issuance or making thereof; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(h)&#160;&#160;&#160;&#160;The Company or any Restricted Subsidiary becomes insolvent or bankrupt, is generally not paying its debts as they become due or makes an assignment for the benefit of creditors, or the Company or any Restricted Subsidiary causes or suffers an order of relief to be entered with respect to it under applicable Federal bankruptcy law or applies for or consents to the appointment of a custodian, liquidator, trustee or receiver for the Company or such Restricted Subsidiary or for the major part of the property of either; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(i)&#160;&#160;&#160;&#160;Final judgment or judgments for the payment of money aggregating in excess of $250,000 is or are outstanding against the Company or any Restricted Subsidiary or against any property or assets of either and any one of such judgments has remained unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period of 60&#160;days from the date of its entry; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(j)&#160;&#160;&#160;&#160;A custodian, liquidator, trustee or receiver is appointed for the Company or any Restricted Subsidiary or for the major part of the property of either and is not discharged within 60&#160;days after such appointment; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(k)&#160;&#160;&#160;&#160;Bankruptcy, reorganization, arrangement or insolvency proceedings, or other proceedings for relief under any bankruptcy or similar law or laws for the relief of debtors, are instituted by or against the Company or any Restricted Subsidiary and, if instituted against the Company or any Restricted Subsidiary, are consented to or are not dismissed within 60&#160;days after such institution; or</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(l)&#160;&#160;&#160;&#160;if (i)&#160;any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section&#160;412 of the Code, (ii) a notice of intent to terminate any Plan under Section&#160;4041(c) of ERISA shall have been filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii)&#160;the aggregate &#8220;amount of unfunded benefit liabilities&#8221; (within the meaning of section&#160;4001(a)(18) of ERISA) under all Plans, determined in accordance with Title&#160;IV of ERISA, shall exceed an amount that could reasonably be expected to have a material adverse effect on the business or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole, (iv)&#160;the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">23</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">tax provisions of the Code relating to employee benefit plans, (v)&#160;the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi)&#160;the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Subsidiary thereunder; and only if any such event or events described in clauses (i) through (vi) above, either individually or together with any other such event or events, could reasonably be expected to have a material adverse effect on the business or condition (financial or otherwise) of the Company and its Subsidiaries taken as a whole.  As used in this Section&#160;6.1(l), the terms </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;employee benefit plan&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;and </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;employee welfare benefit plan&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall have the respective meanings assigned to such terms in section 3 of ERISA.</font></div><a name="s79be77791bfd4a3cb8b7c87eb8d05072"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;6.2.  Notice to Holders</font><font style="font-family:inherit;font-size:11pt;">.   When any Event of Default described in the foregoing </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;6.1</font><font style="font-family:inherit;font-size:11pt;">&#32;has occurred, or if the holder of any Note or of any other evidence of Indebtedness of the Company or any Restricted Subsidiary for borrowed money gives any notice or takes any other action with respect to a claimed default, the Company agrees to give notice within three business days of such event to all holders of the Notes then outstanding.</font></div><a name="sf0d3b72acf0841c3a2c25101ab8f30ec"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;6.3.  Acceleration of Maturities</font><font style="font-family:inherit;font-size:11pt;">.   When any Event of Default described in paragraph (a) or (b) of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;6.1</font><font style="font-family:inherit;font-size:11pt;">&#32;has happened and is continuing, any holder of any Note may, and when any Event of Default described in paragraphs (c) through (g) inclusive, (i) or (l), of said </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;6.1</font><font style="font-family:inherit;font-size:11pt;">&#32;has happened and is continuing, the holder or holders of 25% or more of the principal amount of Notes at the time outstanding may, by notice to the Company, declare the entire principal and all interest accrued on all Notes to be, and all Notes shall thereupon become, forthwith due and payable, without any presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived.  When any Event of Default described in paragraph (h), (j), or (k) of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;6.1</font><font style="font-family:inherit;font-size:11pt;">&#32;has occurred, then all outstanding Notes shall immediately become due and payable without presentment, demand or notice of any kind.  Upon the Notes becoming due and payable as a result of any Event of Default as aforesaid, the Company will forthwith pay to the holders of the Notes the entire principal and interest accrued on the Notes and, to the extent not prohibited by applicable law, an amount as liquidated damages for the loss of the bargain evidenced hereby (and not as a penalty) equal to the Make-Whole Amount.  No course of dealing on the part of the holder or holders of any Notes nor any delay or failure on the part of any holder of Notes to exercise any right shall operate as a waiver of such right or otherwise prejudice such holder&#8217;s rights, powers and remedies.  The Company further agrees, to the extent permitted by law, to pay to the holder or holders of the Notes all costs and expenses incurred by them in the collection of any Notes upon any default hereunder or thereon, including reasonable compensation to such holder&#8217;s or holders&#8217; attorneys for all services rendered in connection therewith.</font></div><a name="sadc9ee67dd444d498a6425d4608339e4"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;6.4.   Rescission of Acceleration</font><font style="font-family:inherit;font-size:11pt;">.   The provisions of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;6.3</font><font style="font-family:inherit;font-size:11pt;">&#32;are subject to the condition that if the principal of and accrued interest on all or any outstanding Notes have been declared immediately due and payable by reason of the occurrence of any Event of Default described in paragraphs (a) through (g) inclusive, (i) or (l), inclusive, of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;6.1</font><font style="font-family:inherit;font-size:11pt;">, the holders of 66-2/3% in aggregate principal amount of the Notes then outstanding may, by written instrument filed with the Company, rescind and annul such declaration and the consequences thereof, provided that at the time such declaration is annulled and rescinded:</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">24</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;no judgment or decree has been entered for the payment of any monies due pursuant to the Notes or this Agreement;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;all arrears of interest upon all the Notes and all other sums payable under the Notes and under this Agreement (except any principal, interest or Make&#8209;Whole Amount on the Notes which has become due and payable solely by reason of such declaration under </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;6.3</font><font style="font-family:inherit;font-size:11pt;">) shall have been duly paid; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;each and every other Default and Event of Default shall have been made good, cured or waived pursuant to </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;7.1</font><font style="font-family:inherit;font-size:11pt;">;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">and </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided further,</font><font style="font-family:inherit;font-size:11pt;">&#32;that no such rescission and annulment shall extend to or affect any subsequent Default or Event of Default or impair any right consequent thereto.</font></div><a name="s0ef38fdbbd9043a0878819a53d4e4376"></a><table cellpadding="0" cellspacing="0" style="padding-top:21px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:112px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SECTION&#160;7.</font></div></td><td style="vertical-align:top;padding-left:1.3333333333333333px;"><div style="line-height:140%;text-align:left;font-size:11pt;text-indent:-1.3333333333333333px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">AMENDMENTS, WAIVERS AND CONSENTS</font><font style="font-family:inherit;font-size:11pt;">.</font></div></td></tr></table><a name="s69272e2414334ccc8a4229e16bfd0938"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;7.1.  Consent Required</font><font style="font-family:inherit;font-size:11pt;">.   Any term, covenant, agreement or condition of this Agreement may, with the consent of the Company, be amended or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), if the Company shall have obtained the consent in writing of (a)&#160;prior to the Closing Date, the Purchasers and (b)&#160;on or after the Closing Date, the holders of at least 66-2/3% in aggregate principal amount of outstanding Notes; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided</font><font style="font-family:inherit;font-size:11pt;">&#32;that without the written consent of each Purchaser prior to the Closing Date or, thereafter, the holders of all of the Notes then outstanding, no such amendment or waiver shall be effective (i)&#160;which will change the time of payment of the principal of or the interest on any Note or change the principal amount thereof or change the rate of interest thereon, or (ii)&#160;which will change any of the provisions with respect to optional prepayments, or (iii)&#160;which will change the percentage of Purchasers or holders of the Notes required to consent to any such amendment or waiver of any of the provisions of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;7</font><font style="font-family:inherit;font-size:11pt;">&#32;or </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;6 </font><font style="font-family:inherit;font-size:11pt;">or the principal amount of the Notes that the Purchasers are to purchase pursuant to </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;1.2</font><font style="font-family:inherit;font-size:11pt;">&#32;upon the satisfaction of the conditions to the Closing Date that appear in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;4.2</font><font style="font-family:inherit;font-size:11pt;">.</font></div><a name="s8d5d4ef641bd489cb15823a36f2a9ab6"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;7.2.  Solicitation of Holder</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">s</font><font style="font-family:inherit;font-size:11pt;">.   Prior to the Closing Date, or after the Closing Date so long as there are any Notes outstanding, the Company will not solicit, request or negotiate for or with respect to any proposed waiver or amendment of any of the provisions of this Agreement or the Notes unless each Purchaser, if prior to the Closing Date, and each holder of Notes (irrespective of the amount of Notes then owned by it), if after the Closing Date, shall be informed thereof by the Company and shall be afforded the opportunity of considering the same and shall be supplied by the Company with sufficient information to enable it to make an informed decision with respect thereto.  The Company will not, directly or indirectly, pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, to any Purchaser or holder of Notes as consideration for or as an inducement to entering into by any Purchaser or holder of Notes of any waiver or amendment of any of the terms and provisions of this Agreement or the Notes unless such remuneration is concurrently offered, on the same terms, ratably to the Purchasers or holders of all Notes then outstanding.</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">25</font></div></div><hr style="page-break-after:always"><a name="sa80c2695de2144debe33df1bac0c25d0"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;7.3.  Effect of Amendment or Waive</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">r</font><font style="font-family:inherit;font-size:11pt;">.   Any such amendment or waiver shall apply equally to all of the Purchasers or holders of the Notes and shall be binding upon them, upon each future holder of any Note and upon the Company, whether or not such Note shall have been marked to indicate such amendment or waiver.  No such amendment or waiver shall extend to or affect any obligation not expressly amended or waived or impair any right consequent thereon.</font></div><a name="sf8bdb64d05c549a482841e41e941e3b5"></a><table cellpadding="0" cellspacing="0" style="padding-top:21px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:112px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SECTION&#160;8.</font></div></td><td style="vertical-align:top;padding-left:1.3333333333333333px;"><div style="line-height:140%;text-align:left;font-size:11pt;text-indent:-1.3333333333333333px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">INTERPRETATION OF AGREEMENT; DEFINITIONS</font><font style="font-family:inherit;font-size:11pt;">.</font></div></td></tr></table><a name="sf04cf6b24b7c4c4b8840711989a10ca5"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;8.1.  Definitions</font><font style="font-family:inherit;font-size:11pt;">.   Unless the context otherwise requires, the terms hereinafter set forth when used herein shall have the following meanings and the following definitions shall be equally applicable to both the singular and plural forms of any of the terms herein defined:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Additional Funded Debt&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;of the Company shall mean as of the date of any determination thereof, the greater of (i) the amount, if any, by which the aggregate amount of all unsecured Current Debt of the Company then outstanding to the Corporation or its subsidiaries exceeds 15% of Consolidated Net Worth, or (ii) the amount, if any, by which the aggregate amount of all unsecured Current Debt of the Company then outstanding under a bank credit facility or to the Corporation or its subsidiaries exceeds 30% of Consolidated Net Worth.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Affiliate&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean any Person (other than a Restricted Subsidiary) (i)&#160;which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, the Company, (ii)&#160;which beneficially owns or holds 5% or more of any class of the Voting Stock of the Company or (iii)&#160;5% or more of the Voting Stock (or in the case of a Person which is not a corporation, 5% or more of the equity interest) of which is beneficially owned or held by the Company or a Restricted Subsidiary.  The term </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;control&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of Voting Stock, by contract or otherwise.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Agreement&#8221;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall mean this Note Agreement dated as of January&#160;24, 2014, as amended or otherwise modified from time to time.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Blocked Person&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall have the meaning set forth in paragraph 23 of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit&#160;B</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Business Day&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean any day other than a Saturday, Sunday or other day on which banks in New York or California are required by law to close or are customarily closed.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Capitalized Lease&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean any lease the obligation for Rentals with respect to which is required to be capitalized on a balance sheet of the lessee in accordance with generally accepted accounting principles.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Capitalized Rentals&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;of any Person shall mean as of the date of any determination thereof the amount at which the aggregate Rentals due and to become due under all Capitalized Leases under which </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">26</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">such Person is a lessee would be reflected as a liability on a consolidated balance sheet of such Person in accordance with generally accepted accounting principles.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;CISADA&#8221; </font><font style="font-family:inherit;font-size:11pt;">shall have the meaning set forth in paragraph 23 of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit&#160;B.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Closing Date&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall have the meaning set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;1.3</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Company&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean San Jose Water Company, a California corporation, and any Person who succeeds to all, or substantially all, of the assets and business of San Jose Water Company.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Consolidated Debt&#8221;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall mean all Debt of the Company and its Restricted Subsidiaries, determined on a consolidated basis eliminating intercompany items.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Consolidated Funded Debt&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean all Funded Debt of the Company and its Restricted Subsidiaries, determined on a consolidated basis eliminating intercompany items.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Consolidated Indebtedness&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean all Indebtedness of the Company and its Restricted Subsidiaries, determined on a consolidated basis eliminating intercompany items.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Consolidated Net Income&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;for any period shall mean the gross revenues of the Company and its Restricted Subsidiaries for such period less all expenses and other proper charges (including taxes on income), determined on a consolidated basis after eliminating earnings or losses attributable to outstanding Minority Interests, but excluding in any event:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;any gains or losses on the sale or other disposition of Investments or fixed or capital assets, and any taxes on such excluded gains and any tax deductions or credits on account of any such excluded losses;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160; the proceeds of any life insurance policy;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;net earnings and losses of any Restricted Subsidiary accrued prior to the date it became a Restricted Subsidiary;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;net earnings and losses of any corporation (other than a Restricted Subsidiary), substantially all the assets of which have been acquired in any manner by the Company or any Restricted Subsidiary, realized by such corporation prior to the date of such acquisition;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(e)&#160;&#160;&#160;&#160;net earnings and losses of any corporation (other than a Restricted Subsidiary) with which the Company or a Restricted Subsidiary shall have consolidated or which shall have merged into or with the Company or a Restricted Subsidiary prior to the date of such consolidation or merger;</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">27</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(f)&#160;&#160;&#160;&#160;net earnings of any business entity (other than a Restricted Subsidiary) in which the Company or any Restricted Subsidiary has an ownership interest unless such net earnings shall have actually been received by the Company or such Restricted Subsidiary in the form of cash distributions;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(g)&#160;&#160;&#160;&#160;any portion of the net earnings of any Restricted Subsidiary which for any reason is unavailable for payment of dividends to the Company or any other Restricted Subsidiary;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(h)&#160;&#160;&#160;&#160;earnings resulting from any reappraisal, revaluation or write-up or write-down of assets;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(i)&#160;&#160;&#160;&#160;any deferred or other credit representing any excess of the equity in any Subsidiary at the date of acquisition thereof over the amount invested in such Subsidiary; </font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(j)&#160;&#160;&#160;&#160;any gain arising from the re-acquisition of any Securities of the Company or any Restricted Subsidiary; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(k)&#160;&#160;&#160;&#160;any reversal of any contingency reserve, except to the extent that provision for such contingency reserve shall have been made from income arising during such period.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Consolidated Net Income Available for Interest Charges&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;for any period shall mean:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(1)&#160;&#160;&#160;&#160;Consolidated Net Income, </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">plus</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(2)&#160;&#160;&#160;&#160;the sum of (i)&#160;state, Federal or local taxes measured by income and excess profits taxes paid or accrued by the Company and its Restricted Subsidiaries on account of such Consolidated Net Income during said period plus (ii)&#160;all Interest Charges of the Company and its Restricted Subsidiaries for said period (but only to the extent deducted in computing Consolidated Net Income for said period.)</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Consolidated Net Worth&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall mean as of any date the aggregate amount of the capital stock accounts (less treasury stock), retained earnings and surplus of the Company and its Restricted Subsidiaries after deducting Minority Interests to the extent included in the capital stock accounts of the Company, all as determined on a consolidated basis for the Company and its Restricted Subsidiaries.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Consolidated Total Assets&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, as of any date as of which the amount thereof is to be determined, the sum total of all of the assets, both real and personal, of the Company and its Restricted Subsidiaries on a consolidated basis, after eliminating all offsetting debits and credits among the Company and all of its Restricted Subsidiaries and deducting reserves for obsolescence, depletion and/or depreciation and all other proper reserves which should be set aside in connection with the business conducted by the pertinent corporation (other than reserves which are, in effect, mere appropriations of retained earnings).</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">28</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Control</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">&#8220;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Controlled Affiliate</font><font style="font-family:inherit;font-size:11pt;">&#8221; means an Affiliate of a Person that is under the Control of such Person or which Affiliate and such Person are both under the Control of another Person.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Controlled Entity&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;means (i) any of the Subsidiaries of the Company and any of their or the Company&#8217;s respective Controlled Affiliates and (ii) if the Company has a parent company, such parent company and its Controlled Affiliates.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Corporation&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean SJW Corp., a California corporation which is the parent company of the Company, and any person who succeeds to all or substantially all of the assets and business of SJW Corp.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Current Debt&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;of any Person shall mean (i) all Indebtedness of such Person for borrowed money payable on demand or in less than one year and (ii) all Guaranties by such Person of Current Debt of others;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#32;provided,</font><font style="font-family:inherit;font-size:11pt;">&#32;that in the determination of Current Debt of the Company or any Restricted Subsidiary, (x) there shall be excluded any Indebtedness for Ordinary Course Deposits and (y) there shall be included all Indebtedness of the Company under the Line of Credit.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Debt&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;of any Person shall mean, without duplication, all Current Debt and all Funded Debt of such Person.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Default&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean any event or condition the occurrence of which would, with the lapse of time or the giving of notice, or both, constitute an Event of Default.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Environmental Laws&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;means any statute, law, ordinance, rule or regulation of any local, state or federal authority having jurisdiction over any property of the Company or of its Subsidiaries or any portion thereof, regulating or imposing liability concerning the release or disposal of any hazardous waste or toxic substance or relating to pollution or protection of the environment, including, but not limited to: (a)&#160;the Federal Water Pollution Control Act, as amended; (b)&#160;the Federal Resource Conservation and Recovery Act, as amended; (c)&#160;the Comprehensive Environmental Response Compensation and Liability Act, as amended; (d)&#160;the Toxic Substance Control Act, as amended; (e)&#160;the Clean Air Act, as amended; and (f)&#160;any similar law.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;ERISA&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time.  References to sections of ERISA shall be construed to also refer to any successor sections.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;ERISA Affiliate</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean any corporation, trade or business that is, along with the Company, a member of a controlled group of corporations or a controlled group of trades or businesses, as described in Section&#160;414(b) and 414(c), respectively, of the Code or Section&#160;4001 of ERISA.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Event of Default&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall have the meaning set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;6.1</font><font style="font-family:inherit;font-size:11pt;">.</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">29</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Execution Date&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall have the meaning set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;1.3</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Funded Debt&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;of any Person shall mean (i)&#160;all Indebtedness of such Person for borrowed money or which has been incurred in connection with the acquisition of assets in each case having a final maturity of one or more than one year from the date of origin thereof (or which is renewable or extendible at the option of the obligor for a period or periods more than one year from the date of origin), including all payments in respect thereof that are required to be made within one year from the date of any determination of Funded Debt, whether or not the obligation to make such payments shall constitute a current liability of the obligor under generally accepted accounting principles, (ii)&#160;all Capitalized Rentals of such Person, (iii)&#160;all Guaranties by such Person of Funded Debt of others and (iv)&#160;for purposes of calculating compliance with the provisions of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.6(a)(4)</font><font style="font-family:inherit;font-size:11pt;">&#32;and the definitions contained therein, Funded Debt of the Company shall include all Additional Funded Debt of the Company; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided</font><font style="font-family:inherit;font-size:11pt;">, that in the determination of Funded Debt of the Company or any Restricted Subsidiary, there shall be excluded (x) any Indebtedness for Ordinary Course Deposits and (y) Indebtedness of the Company under the Line of Credit.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Guaranties&#8221;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#32;</font><font style="font-family:inherit;font-size:11pt;">by any Person shall mean all obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing, or in effect guaranteeing, any Indebtedness, dividend or other obligation of any other Person (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;primary obligor&#8221;</font><font style="font-family:inherit;font-size:11pt;">) in any manner, whether directly or indirectly, including, without limitation, all obligations incurred through an agreement, contingent or otherwise, by such Person: (i)&#160;to purchase such Indebtedness or obligation or any property or assets constituting security therefor, (ii)&#160;to advance or supply funds (x)&#160;for the purchase or payment of such Indebtedness or obligation, (y)&#160;to maintain working capital or other balance sheet condition or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation, (iii)&#160;to lease property or to purchase Securities or other property or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of the primary obligor to make payment of the Indebtedness or obligation, or (iv)&#160;otherwise to assure the owner of the Indebtedness or obligation of the primary obligor against loss in respect thereof.  For the purposes of all computations made under this Agreement, a Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the principal amount of such Indebtedness for borrowed money which has been guaranteed, and a Guaranty in respect of any other obligation or liability or any dividend shall be deemed to be Indebtedness equal to the maximum aggregate amount of such obligation, liability or dividend.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Hazardous Material&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;means any hazardous or toxic material, substance or waste which is defined by those or similar terms and is regulated as such under any applicable Environmental Law.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Indebtedness&#8221;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#32;</font><font style="font-family:inherit;font-size:11pt;">of any Person shall mean and include all obligations of such Person which in accordance with generally accepted accounting principles shall be classified upon a balance sheet of such Person as liabilities of such Person, and in any event shall include all (i)&#160;obligations of such Person for borrowed money or which has been incurred in connection with the acquisition of property or assets, (ii)&#160;obligations secured by any Lien upon property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such obligations, (iii)&#160;obligations created or arising </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">30</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">under any conditional sale or other title retention agreement with respect to property acquired by such Person, notwithstanding the fact that the rights and remedies of the seller, lender or lessor under such agreement in the event of default are limited to repossession or sale of property, (iv)&#160;Capitalized Rentals and (v)&#160;Guaranties of obligations of others of the character referred to in this definition.  For the purpose of computing the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Indebtedness&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;of any Person, there shall be excluded any particular Indebtedness to the extent that, upon or prior to the maturity thereof, there shall have been deposited with the proper depositary in trust the necessary funds (or evidences of such Indebtedness, if permitted by the instrument creating such Indebtedness) for the payment, redemption or satisfaction of such Indebtedness; and thereafter such funds and evidences of Indebtedness so deposited shall not be included in any computation of the liabilities of such Person.  </font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Institutional Holder</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean any </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;qualified institutional buyer,</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;as defined in Rule&#160;144A promulgated under the Securities Exchange Act of 1934, as said Rule may from time to time be amended.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Interest Charges&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">of any Person with respect to any Indebtedness thereof for any period shall mean all interest charges (including amortization of debt discount or amounts imputed as interest of any Indebtedness in accordance with sound accounting practice) paid, payable or accruing in respect of such Indebtedness for such period; provided that if the interest charges on such Indebtedness are to be determined for any period commencing after the date of computation, then in the case of any Indebtedness evidenced by an obligation bearing interest at a variable rate or at different fixed rates, or any obligation on which interest does not begin to accrue at the date of computation of Interest Charges, or any obligation on which interest does not become payable until a specified date more than one year after the date of computation, the interest charges attributable to such obligation shall be calculated on the basis of the greater of (i)&#160;the rate payable on such obligation on the date of computation and (ii)&#160;the average interest rate payable on all Funded Debt of such Person during the three-month period immediately preceding the date of computation.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Investments&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall mean all investments, in cash or by delivery of property made, directly or indirectly in any Person, whether by acquisition of shares of capital stock, indebtedness or other obligations or Securities or by loan, advance, capital contribution or otherwise; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided, however,</font><font style="font-family:inherit;font-size:11pt;">&#32;that </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Investments&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall not mean or include routine investments in property to be used or consumed in the ordinary course of business.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Lien&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall mean any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether such interest is based on the common law, statute or contract, and including but not limited to the security interest lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease, consignment or bailment for security purposes, but, excluding in the case of the Company or any Restricted Subsidiary, rights, reserved to or vested in any municipality or public authority as an incident of any franchise, grant, license or permit of the Company or any Restricted Subsidiary, as the case may be, whether by the terms of any franchise, grant, license or permit or provision of law or otherwise.  The term </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Lien&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall include reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances (including, with respect to stock, stockholder agreements, voting trust agreements, buyback agreements and </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">31</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">all similar arrangements) affecting property.  For the purposes of this Agreement, the Company or a Restricted Subsidiary shall be deemed to be the owner of any property which it has acquired or holds subject to a conditional sale agreement, Capitalized Lease or other arrangement pursuant to which title to the property has been retained by or vested in some other Person for security purposes and such retention or vesting shall constitute a Lien.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Line of Credit&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">means that certain Credit Agreement dated as of March&#160;1, 2012 between the Company and Wells Fargo Bank, National Association, as amended, modified, supplemented, refinanced or replaced from time to time, providing the Company a short-term line of credit.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Make-Whole Amount&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make Whole Amount may in no event be less than zero.  For the purposes of determining the Make Whole Amount, the following terms have the following meanings:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Called Principal</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 2.3 or has become or is declared to be immediately due and payable pursuant to Section 6.3, as the context requires.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Discounted Value&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Reinvestment Yield&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, with respect to the Called Principal of any Note, 0.50% over  the yield to maturity implied by the yield(s) reported as of 11:00 a.m. (Central Standard Time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as &#8220;Page PX1&#8221;  (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities (&#8220;Reported&#8221;) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a)&#160;converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on the run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2)&#160;closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.  </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">32</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then &#8220;Reinvestment Yield&#8221; means, with respect to the Called Principal of any Note, 0.50% over  the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Remaining Average Life&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360 day year composed of twelve 30 day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Remaining Scheduled Payments&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 2.3 or Section 6.3.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Settlement Date&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 2.3 or has become or is declared to be immediately due and payable pursuant to Section 6.3, as the context requires.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Material Credit Facility</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, as to the Company and its Restricted Subsidiaries, any other agreement(s) creating or evidencing indebtedness for borrowed money entered into on or after the Closing Date by the Company or any Restricted Subsidiary, or in respect of which the Company or any Restricted Subsidiary is an obligor or otherwise provides a guarantee or other credit support (</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;Credit Facility&#8221;</font><font style="font-family:inherit;font-size:11pt;">), in a principal amount outstanding or available for borrowing equal to or greater than $5,000,000 (or the equivalent in the relevant currency of payment); and if no Credit Facility or Credit Facilities equal or exceed such amount, then the largest Credit Facility shall be deemed to be a Material Credit Facility</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">.</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">33</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Minority Interests&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean any shares of stock of any class of a Restricted Subsidiary (other than directors&#8217; qualifying shares as required by law) that are not owned by the Company and/or one or more of its Restricted Subsidiaries.  Minority Interests shall be valued by valuing Minority Interests constituting preferred stock at the voluntary or involuntary liquidating value of such preferred stock, whichever is greater, and by valuing Minority Interests constituting common stock at the book value of capital and surplus applicable thereto adjusted, if necessary, to reflect any changes from the book value of such common stock required by the foregoing method of valuing Minority Interests in preferred stock.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Moody&#8217;s&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall mean Moody&#8217;s Investors Services, Inc.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Multiemployer Plan&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean any Plan that is a &#8220;multiemployer plan&#8221; (as such term is defined in section 4001(a)(3) of ERISA).</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">&#8220;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">NAIC</font><font style="font-family:inherit;font-size:11pt;">&#8221; means the National Association of Insurance Commissioners.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;OFAC&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall have the meaning set forth in paragraph 23 of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit&#160;B</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;OFAC Sanctions Program&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource center/sanctions/Programs/Pages/Programs.aspx.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Ordinary Course Deposits&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall mean in the case of the Company or any Restricted Subsidiary any deposits or advances received by the Company or such Restricted Subsidiary, as the case may be (whether shown on the Company&#8217;s balance sheet as advances for construction, contributions in aid of construction, or otherwise), in the ordinary course of its business from customers, consumers, property developers or other Persons if, in each case, such deposits or advances were made in accordance with customary practices of the utility industry in existence at such time or pursuant to regulatory authority.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;PBGC&#8221;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#32;</font><font style="font-family:inherit;font-size:11pt;">means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Person&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean an individual, partnership, corporation, trust or unincorporated organization, and a government or agency or political subdivision thereof.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Plan&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean an </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;employee benefit plan&#8221; </font><font style="font-family:inherit;font-size:11pt;">(as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Pro Forma Interest Charges&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, as of the date of any determination thereof, the sum of Interest Charges with respect to all Funded Debt of the Company and its Restricted Subsidiaries (other than Funded Debt to be retired concurrently with the issuance of the Funded Debt then to be issued) for the twelve full consecutive calendar months immediately following such date of determination, determined on a pro </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">34</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">forma basis, including, Interest Charges on all Funded Debt then to be issued; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided,</font><font style="font-family:inherit;font-size:11pt;">&#32;that if Funded Debt of the Company includes Additional Funded Debt of the Company, the Interest Charges for such Additional Funded Debt shall be based upon the rate then payable under the bank credit facility, </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided,</font><font style="font-family:inherit;font-size:11pt;">&#32;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">further</font><font style="font-family:inherit;font-size:11pt;">&#32;that if the unsecured debt of the Company to the Corporation or its subsidiaries exceeds the Company&#8217;s unsecured debt under the bank credit facility at the time of reference, the Interest Charges shall be based upon the rate then payable on such unsecured debt to the Corporation or its subsidiaries.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Purchaser&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall have the meaning set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;1.1</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Rentals&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean and include, as of the date of any determination thereof, all fixed payments (including as such all payments which the lessee is obligated to make to the lessor on termination of the lease or surrender of the property) payable by the Company or a Restricted Subsidiary, as lessee or sublessee under a lease of real or personal property, but shall be exclusive of any amounts required to be paid by the Company or a Restricted Subsidiary (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes and similar charges.  Fixed rents under any so-called </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;percentage leases&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall be computed solely on the basis of the minimum rents, if any, required to be paid by the lessee regardless of sales volume or gross revenues.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Reportable Event&#8221;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall have the same meaning as in ERISA.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Responsible Officer&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;with respect to the Company shall mean the President, the Chief Financial Officer, the Chairman, any Vice President, the Treasurer, and the Controller. </font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Restricted Subsidiary&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean any Subsidiary (i)&#160;which is organized under the laws of the United States or any State thereof; (ii)&#160;which conducts substantially all of its business and has substantially all of its assets within the United States; and (iii)&#160;of which more than 80% (by number of votes) of the Voting Stock is beneficially owned by the Company and/or one or more Restricted Subsidiaries.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;S&amp;P&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean Standard &amp; Poor&#8217;s Rating Services (a division of McGraw Hill Companies, Inc.).</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Security&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall have the same meaning as in Section&#160;2(1) of the Securities Act of 1933, as amended.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The term </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;subsidiary&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean, as to any particular parent corporation, any corporation of which more than 50% (by number of votes) of the Voting Stock shall be beneficially owned, directly or indirectly, by such parent corporation.  The term </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Subsidiary&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall mean a subsidiary of the Company.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;SVO&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean the Securities Valuation Office of the NAIC or any successor to such office.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Total Capitalization&#8221;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#32;</font><font style="font-family:inherit;font-size:11pt;">shall mean as of any date the sum of (i)&#160;Consolidated Net Worth plus (ii)&#160;Consolidated Funded Debt.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;U.S. Economic Sanctions&#8221; </font><font style="font-family:inherit;font-size:11pt;">shall have the meaning set forth in paragraph 23 of </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit&#160;B.</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">35</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Voting Stock&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;shall mean Securities of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate directors (or Persons performing similar functions).</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Wholly-Owned Restricted Subsidiary&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;means, at any time, any Restricted Subsidiary all of the equity interests (except directors&#8217; qualifying shares) and voting interests of which are owned by any one or more of the Company and the Company&#8217;s other Wholly-Owned Restricted Subsidiaries at such time.</font></div><a name="sd56d9a59f8cf436996844375c312f09e"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;8.2.  Accounting Principles</font><font style="font-family:inherit;font-size:11pt;">.   Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, the same shall be done in accordance with generally accepted accounting principles, to the extent applicable, except where such principles are inconsistent with the requirements of this Agreement.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">If after the date of this Agreement (a)&#160;any change shall occur in generally accepted accounting principles in effect on the date of this Agreement (a </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;GAAP Change&#8221;</font><font style="font-family:inherit;font-size:11pt;">) which results in a change in any computation or definition used in calculating compliance by the Company with any covenant in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Sections&#160;5.6</font><font style="font-family:inherit;font-size:11pt;">&#32;through </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">5.11</font><font style="font-family:inherit;font-size:11pt;">&#32;and which, in the good faith judgment of the chief financial officer of the Company has had or may have a material effect on the ability of the Company to comply with one or more such covenants (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Affected Covenants</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">) and (b)&#160;the Purchasers shall receive within 90 days after the effective date of such GAAP Change (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Effective Date&#8221;</font><font style="font-family:inherit;font-size:11pt;">) a written notice from the Company (i)&#160;describing the GAAP Change and (ii)&#160;setting forth in reasonable detail (including detailed calculations) why the GAAP Change has had or may have a material effect on the ability of the Company to comply with the Affected Covenants and confirming the good faith judgment of the chief financial officer of the Company with respect thereto, such Purchaser agrees upon such Purchaser&#8217;s receipt of such notice to enter into good faith negotiations with the Company for an amendment to this Agreement of the Affected Covenants so as to place the parties, insofar as possible, in the same relative position as if the GAAP Change had not occurred.  If notice of a GAAP Change has been given then during the period from the Effective Date of the GAAP Change until the effective date of an amendment to this Agreement with respect thereto, the Company shall calculate compliance with the Affected Covenants as though such GAAP Change had not occurred and if no such amendment to this Agreement shall become effective within one year from the Effective Date of such GAAP Change, the Company shall continue to calculate compliance with the Affected Covenants as though such GAAP Change had not occurred.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">For purposes of determining compliance with the financial covenants contained in this Agreement, any election by the Company to measure an item of Indebtedness using fair value (as permitted by Statement of Financial Accounting Standards No. 159 or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.</font></div><a name="s70748d89282946ea8108cf75ea8f5926"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;8.3.  Directly or Indirectly</font><font style="font-family:inherit;font-size:11pt;">.   Where any provision in this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether the action in question is taken directly or indirectly by such Person.</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">36</font></div></div><hr style="page-break-after:always"><a name="sbe6bf8bdf6e34762bf2af870dbed7525"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><table cellpadding="0" cellspacing="0" style="padding-top:21px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:112px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SECTION&#160;9.</font></div></td><td style="vertical-align:top;padding-left:1.3333333333333333px;"><div style="line-height:140%;text-align:left;font-size:11pt;text-indent:-1.3333333333333333px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">MISCELLANEOUS.</font></div></td></tr></table><a name="s8a6b45ed4a8d4c888fea6b2dbfa027e0"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.1.  Registered Notes</font><font style="font-family:inherit;font-size:11pt;">.   The Company shall cause to be kept at its principal office a register for the registration and transfer of the Notes (hereinafter called the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Note Register&#8221;</font><font style="font-family:inherit;font-size:11pt;">), and the Company will register or transfer or cause to be registered or transferred, as hereinafter provided and under such reasonable regulations as it may prescribe, any Note issued pursuant to this Agreement.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">At any time and from time to time the registered holder of any Note which has been duly registered as hereinabove provided may transfer such Note upon surrender thereof at the principal office of the Company duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or its attorney duly authorized in writing.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The Person in whose name any registered Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes of this Agreement.  Payment of or on account of the principal, Make&#8209;Whole Amount, if any, and interest on any registered Note shall be made to or upon the written order of such registered holder.  The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.</font></div><a name="s965513559f984599a4c9af85133dc2b1"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.2.  Exchange of Notes</font><font style="font-family:inherit;font-size:11pt;">.   At any time and from time to time, upon not less than 10 days&#8217; notice to that effect given by the holder of any Note initially delivered or of any Note substituted therefor pursuant to </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;9.1</font><font style="font-family:inherit;font-size:11pt;">, this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;9.2</font><font style="font-family:inherit;font-size:11pt;">&#32;or </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;9.3</font><font style="font-family:inherit;font-size:11pt;">, and, upon surrender of such Note at its office, the Company will deliver in exchange therefor, without expense to such holder, except as set forth below, a Note for the same aggregate principal amount as the then unpaid principal amount of the Note so surrendered, or Notes in the denomination of $100,000 or any amount in excess thereof as such holder shall specify, dated as of the date to which interest has been paid on the Note so surrendered or, if such surrender is prior to the payment of any interest thereon, then dated as of the date of issue, payable to such Person or Persons, or registered assigns, as may be designated by such holder, and otherwise of the same form and tenor as the Notes so surrendered for exchange.</font></div><a name="s1b0c49364ccb42c2a309e604f104873d"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.3.  Loss, Theft, Etc. of Notes</font><font style="font-family:inherit;font-size:11pt;">.    Upon receipt of evidence satisfactory to the Company of the loss, theft, mutilation or destruction of any Note, and in the case of any such loss, theft or destruction upon delivery of a bond of indemnity in such form and amount as shall be reasonably satisfactory to the Company, or in the event of such mutilation upon surrender and cancellation of the Note, the Company will make and deliver without expense to the holder thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or mutilated Note.  If the Purchaser or any subsequent Institutional Holder is the owner of any such lost, stolen or destroyed Note, then the affidavit of an authorized officer of such owner, setting forth the fact of loss, theft or destruction and of its ownership of such Note at the time of such loss, theft or destruction shall be accepted as satisfactory evidence thereof and no further indemnity shall be required as a condition to the execution and delivery of a new Note other than the written agreement of such owner to indemnify the Company.</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">37</font></div></div><hr style="page-break-after:always"><a name="sa16828d773984534ac26422bc1a71bcb"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.4.  Expenses, Stamp Tax Indemnity</font><font style="font-family:inherit;font-size:11pt;">.   Whether or not the transactions herein contemplated shall be consummated, the Company agrees to pay directly all the Purchasers&#8217; reasonable out-of-pocket expenses incurred by the Purchasers and each other holder of a Note in connection with the preparation, execution and delivery of this Agreement and the transactions contemplated hereby, including but not limited to the reasonable charges and disbursements of Chapman and Cutler LLP, the Purchasers&#8217; special counsel, duplicating and printing costs and charges for shipping the Notes, adequately insured to each Purchaser at such Purchaser&#8217;s home office or at such other place as such Purchaser may designate, and all such expenses relating to any amendment, waivers or consents pursuant to the provisions hereof, including, without limitation, any amendments, waivers, or consents resulting from any work-out, renegotiation or restructuring relating to the performance by the Company of its obligations under this Agreement and the Notes.  The Company also agrees that it will pay and save each Purchaser harmless against any and all liability with respect to stamp and other taxes, if any, which may be payable or which may be determined to be payable in connection with the execution and delivery of this Agreement or the Notes, whether or not any Notes are then outstanding.  The Company agrees to protect and indemnify each Purchaser against any liability for any and all brokerage fees and commissions payable or claimed to be payable to any Person in connection with the transactions contemplated by this Agreement.  The Company agrees to pay the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided,</font><font style="font-family:inherit;font-size:11pt;">&#32;that such costs and expenses shall not exceed $4,000.</font></div><a name="sadd57392036d4c50aef32d62bf507159"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.5.  Powers and Rights Not Waived: Remedies Cumulative</font><font style="font-family:inherit;font-size:11pt;">.   No delay or failure on the part of the holder of any Note in the exercise of any power or right shall operate as a waiver thereof; nor shall any single or partial exercise of the same preclude any other or further exercise thereof, or the exercise of any other power or right, and the rights and remedies of the holder of any Note are cumulative to, and are not exclusive of, any rights or remedies any such holder would otherwise have.</font></div><a name="sf3ef9357604d472ab9d661712a34ef0d"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.6.  Notices</font><font style="font-family:inherit;font-size:11pt;">.   All communications provided for hereunder shall be in writing and, if to the Purchasers, delivered or mailed prepaid by registered or certified mail or overnight air courier, or by facsimile communication, in each case addressed to such Purchaser at such Purchaser&#8217;s address appearing on </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;I</font><font style="font-family:inherit;font-size:11pt;">&#32;to this Agreement or such other address as such Purchaser or the subsequent holder of any Note initially issued to such Purchaser may designate to the Company in writing, and if to the Company, delivered or mailed by registered or certified mail or overnight air courier, or by facsimile communication, to the Company at 110 West Taylor Street, San Jose, California 95110, Attention: Chief Financial Officer or to such other address as the Company may in writing designate to each Purchaser or to a subsequent holder of the Note initially issued to such Purchaser; </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">provided, however,</font><font style="font-family:inherit;font-size:11pt;">&#32;that a notice to such Purchaser by overnight air courier shall only be effective if delivered to such Purchaser at a street address designated for such purpose in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;I</font><font style="font-family:inherit;font-size:11pt;">, and a notice to such Purchaser by facsimile communication shall only be effective if made by confirmed transmission to such Purchaser at a telephone number designated for such purpose in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;I</font><font style="font-family:inherit;font-size:11pt;">&#32;(with an original by overnight air courier delivered to such Purchaser the day next following such facsimile communication), or, in either case, as such Purchaser or a subsequent holder of any Note initially issued to such Purchaser may designate to the Company in writing.</font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">38</font></div></div><hr style="page-break-after:always"><a name="sdd85c739a1c7482a9bdc1f6da2fbc9fb"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.7.  Successors and Assigns</font><font style="font-family:inherit;font-size:11pt;">.   This Agreement shall be binding upon the Company and its successors and assigns and shall inure to each Purchaser&#8217;s benefit and to the benefit of such Purchaser&#8217;s successors and assigns, including each successive holder or holders of any Notes.</font></div><a name="s380e2d0e3d154339bf23090d0d454010"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.8.  Survival of Covenants and Representations</font><font style="font-family:inherit;font-size:11pt;">.  All covenants, representations and warranties made by the Company herein and in any certificates delivered pursuant hereto, whether or not in connection with the Execution Date or the Closing Date, shall survive the closing and the delivery of this Agreement and the Notes.</font></div><a name="s5373aec21e7e4bc1851f56066ffece0f"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.9.  Severability</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;Should any part of this Agreement for any reason be declared invalid or unenforceable, such decision shall not affect the validity or enforceability of any remaining portion, which remaining portion shall remain in force and effect as if this Agreement had been executed with the invalid or unenforceable portion thereof eliminated and it is hereby declared the intention of the parties hereto that they would have executed the remaining portion of this Agreement without including therein any such part, parts or portion which may, for any reason, be hereafter declared invalid or unenforceable.</font></div><a name="sfc2c695a135e476395543ce75b7185c8"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.10.  Governing Law</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;This Agreement and the Notes issued and sold hereunder shall be governed by and construed in accordance with California law.</font></div><a name="s8f9123299a044f1fbaa62f4e09069b61"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section&#160;9.11.  Captions</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;&#32;The descriptive headings of the various Sections or parts of this Agreement are for convenience only and shall not affect the meaning or construction of any of the provisions hereof.</font></div><a name="s7c5df209fe3e45e59d8068a6cc5af2bd"></a><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Section 9.12</font><font style="font-family:inherit;font-size:11pt;">.  </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">Confidential Information</font><font style="font-family:inherit;font-size:11pt;">.  For the purposes of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 9.12</font><font style="font-family:inherit;font-size:11pt;">, &#8220;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Confidential Information</font><font style="font-family:inherit;font-size:11pt;">&#8221; means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser&#8217;s behalf in violation hereof, (c) otherwise becomes known to such Purchaser other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 5.16</font><font style="font-family:inherit;font-size:11pt;">&#32;that are otherwise publicly available.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its auditors, financial advisors and other professional advisors who are bound by professional obligations of confidentiality or who agree to hold confidential the Confidential Information substantially in accordance with this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 9.12</font><font style="font-family:inherit;font-size:11pt;">, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 9.12</font><font style="font-family:inherit;font-size:11pt;">), (v) any Person from which it offers to purchase any Security </font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">39</font></div></div><hr style="page-break-after:always"><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 9.12</font><font style="font-family:inherit;font-size:11pt;">), (vi) any U.S. federal or state or foreign regulatory authority having or claiming to have jurisdiction over such Purchaser, (vii)&#160;the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser&#8217;s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser&#8217;s Notes or this Agreement.  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 9.12</font><font style="font-family:inherit;font-size:11pt;">&#32;as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 9.12</font><font style="font-family:inherit;font-size:11pt;">.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">In the event that as a condition to receiving access to information relating to the Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 9.12</font><font style="font-family:inherit;font-size:11pt;">, this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 9.12</font><font style="font-family:inherit;font-size:11pt;">&#32;shall not be amended thereby and, as between such Purchaser or such holder and the Company, this </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;9.12</font><font style="font-family:inherit;font-size:11pt;">&#32;shall supersede any such other confidentiality undertaking.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this Agreement may be executed in any number of counterparts, each executed counterpart constituting an original but all together only one agreement.</font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">40</font></div></div><hr style="page-break-after:always"><a name="s108F3C5065F2FB671536D4E10655A387"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The execution hereof by you shall constitute a contract between us for the uses and purposes hereinabove set forth, and this Agreement may be executed in any number of counterparts, each executed counterpart constituting an original but all together only one agreement.</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SAN JOSE WATER COMPANY</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">By </font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">/s/ W. Richard Roth</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Name:  W. Richard Roth</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Title:  President, Chief Executive Officer,</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">&#32;&#32;&#32;&#32;&#32;&#32;&#32;&#32;&#32;&#32;&#32;&#32;&#32;&#32;&#32;Chairman of the Board</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">By </font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">/s/ James P. Lynch</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Name:  James P. Lynch</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Title:  Chief Financial Officer</font></div><br><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><hr style="page-break-after:always"><a name="s108F3C5065F2FB671536D4E10655A387"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Accepted as of January 24, 2014.</font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">By </font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">/s/  Pradeep Killamsetty</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Name:  Pradeep Killamsetty</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Title:  Managing Director</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">By </font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">/s/  Pradeep Killamsetty</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Name:  Pradeep Killamsetty</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Title:  Authorized Signatory</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div><div style="line-height:140%;text-align:left;text-indent:312px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">&#160;&#160;&#160;&#160;</font></div></div><hr style="page-break-after:always"><a name="s1E925E6A85B29BF75F77D4E1074F4CB2"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">SAN JOSE WATER COMPANY</font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">5.14% Senior Note, Series&#160;L,</font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Due ___________, 2044</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">No. RL-_____&#160;&#160;&#160;&#160;______________, 2014</font></div><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$____________________&#160;&#160;&#160;&#160;PPN&#160;798237&#160;L*2</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SAN JOSE WATER COMPANY, a California corporation (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;Company&#8221;</font><font style="font-family:inherit;font-size:11pt;">), for value received, hereby promises to pay to</font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">or registered assigns</font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">on the ____ day of ___________, 2044</font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">the principal amount of</font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the principal amount from time to time remaining unpaid hereon at the rate of 5.14% per annum from the date hereof until maturity, payable semiannually on the 1st day of each March and September in each year commencing on March 1, 2015, and at maturity.  The Company agrees to pay interest on overdue principal (including any overdue optional prepayment of principal) and Make&#8209;Whole Amount, if any, and (to the extent legally enforceable) on any overdue installment of interest, at the rate of 7.14% per annum after the due date, whether by acceleration or otherwise, until paid.  Both the principal hereof and interest hereon are payable at the principal office of the Company in San Jose, California in coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts.  If any amount of principal, Make&#8209;Whole Amount, if any, or interest on or in respect of this Note becomes due and payable on any date which is not a Business Day, such amount shall be payable in accordance with Section 2.7 of the Note Agreement referred to below.  </font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">This Note is one of the 5.14% Senior Notes, Series&#160;L, due ___________, 2044 (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Notes&#8221;</font><font style="font-family:inherit;font-size:11pt;">) of the Company in the aggregate principal amount of $50,000,000 issued or to be issued under and pursuant to the terms and provisions of the Note Agreement dated as of January&#160;24, 2014 (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Note Agreement&#8221;</font><font style="font-family:inherit;font-size:11pt;">), entered into by the Company with the original Purchasers therein referred to and this Note and the holder hereof are entitled equally and ratably with the holders of all other Notes outstanding under the Note Agreement to all the benefits provided for thereby or referred to therein.  Reference is hereby made to the Note Agreement for a statement of such rights and benefits.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">This Note and the other Notes outstanding under the Note Agreement may be declared due prior to their expressed maturity dates and certain prepayments are permitted to be made thereon, all in the events, on the terms and in the manner and amounts as provided in the Note Agreement.</font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">EXHIBIT&#160;A</font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(to Note Agreement)</font></div></div><hr style="page-break-after:always"><a name="s1E925E6A85B29BF75F77D4E1074F4CB2"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The Notes are not subject to prepayment or redemption at the option of the Company prior to their expressed maturity dates except on the terms and conditions and in the amounts and with the Make&#8209;Whole Amount, if any, set forth in the Note Agreement.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">This Note is registered on the books of the Company and is transferable only by surrender thereof at the principal office of the Company duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of this Note or its attorney duly authorized in writing.  Payment of or on account of principal, Make&#8209;Whole Amount, if any, and interest on this Note shall be made only to or upon the order in writing of the registered holder.</font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SAN JOSE WATER COMPANY</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">By ___________________________________</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Name:</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Title:</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">By ____________________________________</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Name:</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Title:</font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">A-2</font></div></div><hr style="page-break-after:always"><a name="s2ACEA14B3626BB74E849D4E107744177"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">REPRESENTATIONS AND WARRANTIES</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SAN JOSE WATER COMPANY, a California corporation (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Company&#8221;</font><font style="font-family:inherit;font-size:11pt;">), represents and warrants to each purchaser (each, a </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Purchaser&#8221;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">and, collectively, the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Purchasers&#8221;</font><font style="font-family:inherit;font-size:11pt;">) of its Notes referred to below as follows:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">1.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Definitions.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The defined terms used in these representations and warranties have the meanings specified in the Note Agreement dated as of January&#160;24, 2014 (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Agreement&#8221;</font><font style="font-family:inherit;font-size:11pt;">), among the Company, John Hancock Life Insurance Company (U.S.A.) and John Hancock Life Insurance Company of New York, relating to the purchase by the Purchasers of the 5.14% Senior Notes, Series&#160;L, Due 2044 (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Notes&#8221;</font><font style="font-family:inherit;font-size:11pt;">) of the Company in the aggregate principal amount of $50,000,000.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">2.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Subsidiaries.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;As indicated in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;II</font><font style="font-family:inherit;font-size:11pt;">, the Company has no Subsidiaries of any kind.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">3.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Corporate Organization and Authority.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The Company</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;has all requisite power and authority and all necessary licenses and permits to own and operate its properties and to carry on its business as now conducted and as presently proposed to be conducted;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;is duly licensed or qualified and is in good standing as a foreign corporation in each jurisdiction wherein the nature of the business transacted by it or the nature of the property owned or leased by it makes such licensing or qualification necessary; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;has received and currently possesses all necessary governmental and regulatory permits and authority to operate as a water utility under the jurisdiction of the Public Utilities Commission of the State of California, including without limitation all necessary or appropriate permits and authorizations issued by the California Department of Health Services and the California Department of Water Resources.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">4.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Business and Property.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The Purchasers have heretofore been provided with a Confidential Memorandum, dated October&#160;2013 (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Private Placement Memorandum</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8221;</font><font style="font-family:inherit;font-size:11pt;">), prepared by the Company with the assistance of Slusser Associates, Inc., Section III of which sets forth a correct description of the business conducted by the Company and the principal properties of the Company</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">5.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Financial Statements.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;(a)&#160;The balance sheets of the Company as of December&#160;31 in each of the years 2011 and 2012 and the statements of income, changes in shareholders&#8217; equity, and cash flows for the fiscal years ended on said dates, audited by KPMG LLP have been prepared in accordance with generally accepted accounting principles consistently applied except as therein noted, are correct and complete and present fairly the financial position of the Company as of such dates and the results of its operations and </font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">EXHIBIT&#160;B</font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(to Note Agreement)</font></div></div><hr style="page-break-after:always"><a name="s2ACEA14B3626BB74E849D4E107744177"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">cash flows for such periods.  The unaudited interim balance sheet of the Company as of June 30, 2013 and the statements of income and cash flows for the six-month period then ended have been prepared in all material respects in accordance with generally accepted accounting principles consistently applied (other than without footnotes and subject to customary year-end adjustments), are correct and complete in all material respects and present fairly the financial position of the Company as of such date and the results of its operations and cash flows for such period.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;Since December&#160;31, 2012 there has been no change in the condition, financial or otherwise, of the Company as shown on the balance sheet as of such date, except changes in the ordinary course of business, none of which, individually or in the aggregate, has been materially adverse.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">6.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Debt.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;V</font><font style="font-family:inherit;font-size:11pt;">&#32;to the Agreement correctly describes all Debt of the Company outstanding on December 31, 2013.  Since such date, no other Debt has been incurred or entered into and there has been no material change in the amount of Debt of the Company outstanding, other than changes in the amount of Debt outstanding under the Line of Credit, such that on the Execution Date and on the Closing Date the aggregate principal amount outstanding thereunder does not exceed $75,000,000.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">7.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Full Disclosure.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;Neither the financial statements referred to in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5</font><font style="font-family:inherit;font-size:11pt;">&#32;hereof nor the Agreement nor the Private Placement Memorandum nor any other written statement furnished by or on behalf of the Company to each Purchaser in connection with the negotiation of the Agreement or the negotiation and sale of the Notes, contains any untrue statement of a material fact or omits a material fact necessary to make the statements contained therein or herein not misleading.  There is no fact peculiar to the Company which has not been disclosed to each Purchaser in writing which materially affects adversely nor, so far as the Company can now foresee, could, individually or in the aggregate, materially affect adversely the properties, business, prospects, profits or condition (financial or otherwise) of the Company or the ability of the Company to comply with and perform the terms of the Agreement or the Notes.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">8.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Pending Litigation.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;There are no proceedings pending or, to the knowledge of the Company threatened, against or affecting the Company in any court or before any governmental authority or arbitration board or tribunal or regulatory agency which could reasonably be expected to, individually or in the aggregate, materially and adversely affect the properties, business, prospects, profits or condition (financial or otherwise) of the Company or the ability of the Company to comply with or perform its respective obligations under the Agreement or the Notes.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">9.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Title to Properties.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The Company has good and marketable title in fee simple (or its equivalent under applicable law) to all parcels of real property and has good title to all the other material items of property it purports to own, including that reflected in the most recent balance sheet referred to in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5</font><font style="font-family:inherit;font-size:11pt;">&#32;hereof, except as sold or otherwise disposed of in the ordinary course of business and except for Liens permitted by the Agreement.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">10.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Patents and Trademarks.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The Company owns or possesses all the patents, trademarks, trade names, service marks, copyrights, licenses and water and other rights with respect to the foregoing necessary </font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">B-2</font></div></div><hr style="page-break-after:always"><a name="s2ACEA14B3626BB74E849D4E107744177"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">for the present and planned future conduct of its business, without any known conflict with the rights of others.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">11.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Transaction is Legal, Authorized and Enforceable.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The issuance and sale of the Notes and the execution and delivery of the Agreement by the Company and performance by the Company and compliance of the Company with, all of the provisions of the Notes and the Agreement:</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)&#160;&#160;&#160;&#160;are within the legal and corporate powers and authority of the Company;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;will not violate any provisions of any law or any order of any court or governmental authority or agency and will not conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, the Articles of Incorporation or By-laws of the Company or any indenture or other agreement or instrument to which the Company is a party or by which it may be bound or to which it may be subject or results in the imposition of any Lien or encumbrance on any property of the Company; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;have been duly authorized by the Company pursuant to proper corporate action on the part of the Company (no action by any of the stockholders of the Company being required by law, by the Articles of Incorporation or By-laws of the Company or otherwise).  </font></div><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">On the Execution Date, the Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable in accordance with its terms.  On the Closing Date, the Notes will be duly executed and delivered by the Company and the Agreement and the Notes, when issued, will constitute the legal, valid and binding obligations, contracts and agreements of the Company enforceable in accordance with their respective terms.  </font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">12.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">No Defaults.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;If the transactions contemplated by the Agreement were in effect on the Execution Date, no Default or Event of Default would have occurred and be continuing.  On the Closing Date, no Default or Event of Default has occurred that is continuing.  The Company is not in default in the payment of principal or interest on any Indebtedness and is not in default under any instrument or instruments or agreements under and subject to which any Indebtedness has been issued and no event has occurred and is continuing under the provisions of any such instrument or agreement which with the lapse of time or the giving of notice, or both, would constitute a default or an event of default thereunder, except for any amount or amounts, which, individually or in the aggregate, may equal $100,000 or less.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">13.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Governmental Consent.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The Company has obtained the consent of the Public Utilities Commission of the State of California to the issuance and sale of the Notes and the execution, delivery and compliance with and performance by the Company with the terms and provisions of the Notes and the Agreement; such consent is in full force and effect and has not been modified, revoked or rescinded on or as of the date hereof.  Neither the nature of the Company nor of any of its businesses or properties, nor any relationship between the Company and any other Person, nor any circumstance in connection with the offer, issue, sale or delivery of the Notes or the execution and delivery of the Agreement are such as to require any other consent, approval or authorization of, or filing, registration or qualification with, any regulatory body, </font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">B-3</font></div></div><hr style="page-break-after:always"><a name="s2ACEA14B3626BB74E849D4E107744177"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">state, Federal or local on the part of the Company as a condition to the execution, delivery and performance of the Notes or the Agreement.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The Application 10&#8209;07&#8209;022 filed July 23, 2010 by the Company before the Public Utilities Commission of the State of California, and the Exhibits attached thereto, do not contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein not misleading.  There is no fact peculiar to the Company which has not been disclosed to the Public Utilities Commission of the State of California which materially affects adversely or, so far as the Company can now foresee, could, individually or in the aggregate, materially affect adversely the ability of the Company to comply with and perform the terms of CPUC Decision 11&#8209;01&#8209;034 dated January&#160;27, 2011, or which would provide the Public Utilities Commission with a basis for rescinding, revoking, modifying or amending Decision 11&#8209;01&#8209;034.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">14.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Taxes.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;All tax returns required to be filed by the Company have, in fact, been filed, and all taxes, assessments, fees and other governmental charges upon the Company, or upon any of its properties, income or franchises, which are shown to be due and payable in such returns have been paid.  For all taxable years ending on or before December&#160;31, 2011, the Federal income tax liability of the Company has been satisfied and either the period of limitations on assessment of additional Federal income tax has expired or the Company has entered into an agreement with the Internal Revenue Service closing conclusively the total tax liability for the taxable year.  The Company does not know of any proposed additional tax assessment against it or any of its properties and no material controversy in respect of additional Federal or state income taxes due since said date is pending or to the knowledge of the Company is threatened.  The provisions for taxes on the books of the Company are adequate for all open years, and for its current fiscal year.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">15.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Use of Proceeds.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The net proceeds from the sale of the Notes will be used for the purposes specified on </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Schedule&#160;III</font><font style="font-family:inherit;font-size:11pt;">&#32;to the Agreement.  None of the transactions contemplated in the Agreement or the Notes (including, without limitation thereof, the use of proceeds from the issuance of the Notes) will violate or result in a violation of Section&#160;7 of the Securities Exchange Act of 1934, as amended, or any regulation issued pursuant thereto, including, without limitation, Regulations U, T and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter&#160;II.  The Company does not own or intend to carry or purchase any </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;margin stock&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;within the meaning of said Regulation U.  None of the proceeds from the sale of the Notes will be used to purchase, directly or indirectly, or refinance any borrowing the proceeds of which were used to purchase, directly or indirectly, any </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;security&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;within the meaning of the Securities Exchange Act of 1934, as amended.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">16.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Private Offering.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;Neither the Company nor any agent on behalf thereof has, directly or indirectly, offered or will offer the Notes or any similar Security or has solicited or will solicit an offer to acquire the Notes or any similar Security from or has otherwise approached or negotiated or will approach or negotiate in respect of the Notes or any such similar Security with any Person other than the Purchasers and not more than 15 other institutional investors, each of whom was offered a portion of the Notes or such similar Security at private sale for investment.  Neither the Company nor any agent on behalf thereof has, directly or indirectly, offered or will offer the Notes or any such similar Security or has, directly or indirectly, </font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">B-4</font></div></div><hr style="page-break-after:always"><a name="s2ACEA14B3626BB74E849D4E107744177"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">solicited or will solicit an offer to acquire the Notes or any such similar Security from any Person so as to bring the issuance and sale of the Notes or such similar Security within the provisions of Section&#160;5 of the Securities Act of 1933, as amended.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">17.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">ERISA.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(a)  The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not, individually or in the aggregate, reasonably be expected to result in a material adverse effect on the business, prospects, profits, properties or condition (financial or otherwise) of the Company.  Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate material in relation to the business, prospects, profits, properties or condition (financial or otherwise) of the Company.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(b)&#160;&#160;&#160;&#160;The present value of the aggregate benefit liabilities under each of the pension Plans subject to Title IV of ERISA (other than Multiemployer Plans), determined as of the end of such Plan&#8217;s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan&#8217;s most recent actuarial valuation report, exceeded the aggregate current value of the assets of such Plan allocable to such benefit liabilities by approximately $25,000,000 in the case of any single Plan and $25,000,000 in the aggregate for all Plans.  The term </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;benefit liabilities&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;has the meaning specified in section 4001 of ERISA and the terms &#8220;current value&#8221; and &#8220;present value&#8221; have the meaning specified in section 3 of ERISA.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(c)&#160;&#160;&#160;&#160;The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are material in relation to the business, prospects, profits, properties or condition (financial or otherwise) of the Company.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;The expected postretirement benefit obligation (determined as of the last day of the Company&#8217;s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715 60, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company is not material in relation to the business, prospects, profits, properties or condition (financial or otherwise) of the Company.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(e)&#160;&#160;&#160;&#160;The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.  The representation </font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">B-5</font></div></div><hr style="page-break-after:always"><a name="s2ACEA14B3626BB74E849D4E107744177"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">by the Company to each Purchaser in the first sentence of this paragraph is made in reliance upon and subject to the accuracy of such Purchaser&#8217;s representation in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section 3.2</font><font style="font-family:inherit;font-size:11pt;">&#32;of the Agreement as to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by such Purchaser.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">18.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Compliance with Law.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The Company:  (a)&#160;is not in violation of any laws, ordinances, governmental rules or regulations to which it is subject, nor (b)&#160;has failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its property or to the conduct of its business which violation or failure to obtain might, individually or in the aggregate, materially adversely affect the business, prospects, profits, properties or condition (financial or otherwise) of the Company, or impair the ability of the Company to observe or perform its obligations under the Notes or the Agreement.  The Company is not in default with respect to any order of any court or governmental authority or any regulatory agency or any arbitration board or panel.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">19.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Compliance with Environmental Laws.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The Company is not in violation of any applicable Federal, state or local laws, statutes, rules, regulations or ordinances relating to public health, safety or the environment, including, without limitation, relating to releases, discharges, emissions or disposal to air, water, land or ground water, to the withdrawal or use of ground water, to the use, handling or disposal of polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde, to the treatment, storage, disposal or management of hazardous substances (including, without limitation, petroleum, crude oil or any fraction thereof, or other hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous or other controlled, prohibited or regulated substances which violation could, individually or in the aggregate, have a material adverse effect on the business, prospects, profits, properties or condition (financial or otherwise) of the Company.  The Company has no liability or class of liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42&#160;U.S.C. Section&#160;9601 </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">et seq.</font><font style="font-family:inherit;font-size:11pt;">), or the Resource Conservation and Recovery Act of 1976, as amended (42&#160;U.S.C. Section&#160;6901 </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">et seq.</font><font style="font-family:inherit;font-size:11pt;">).</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">20.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Restrictions on the Company.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The Company is not a party to any contract or agreement, or subject to any charter or other corporate restriction, which, individually or in the aggregate, materially and adversely affects the business of the Company.  The Company is not a party to any contract or agreement or subject to any charter or other corporate restriction which prohibits the execution, delivery, performance and observance by the Company of the Notes or the Agreement.  The Company is not a party to any agreement which would result or cause at any time in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Section&#160;5.7</font><font style="font-family:inherit;font-size:11pt;">&#32;of the Agreement.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">21.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Investment Company Act.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The Company is not, nor is directly or indirectly controlled by, or acting on behalf of any person which is, an </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;investment company&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;within the meaning of the Investment Company Act of 1940, as amended.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">22.&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">Public Utility Holding Company Act, Etc.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;The Company is a public utility and a wholly-owned subsidiary of the Corporation, but it is not a </font><font style="font-family:inherit;font-size:11pt;font-style:italic;">&#8220;public utility&#8221;</font><font style="font-family:inherit;font-size:11pt;">&#32;within the meaning of the Federal Power Act, as amended.</font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">B-6</font></div></div><hr style="page-break-after:always"><a name="s2ACEA14B3626BB74E849D4E107744177"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-style:italic;"></font><font style="font-family:inherit;font-size:11pt;">23</font><font style="font-family:inherit;font-size:11pt;font-style:italic;">.&#160;&#160;&#160;&#160;Foreign Assets Control Regulations, Etc.</font><font style="font-family:inherit;font-size:11pt;">&#32;&#32;(a) Neither the Company nor any Controlled Entity is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;OFAC&#8221;</font><font style="font-family:inherit;font-size:11pt;">) (an </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;OFAC Listed Person&#8221;</font><font style="font-family:inherit;font-size:11pt;">) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program,  or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act (</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;CISADA&#8221;</font><font style="font-family:inherit;font-size:11pt;">) or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;U.S. Economic Sanctions&#8221;</font><font style="font-family:inherit;font-size:11pt;">) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (i), clause (ii) or clause (iii), a </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;Blocked Person&#8221;</font><font style="font-family:inherit;font-size:11pt;">).  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The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti Money Laundering Laws and U.S. Economic Sanctions.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(d)&#160;&#160;&#160;&#160;(1) Neither the Company nor any Controlled Entity (i) has been charged with, or convicted of bribery or any other anti corruption related activity under any applicable law or regulation in a U.S. or any non U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively, </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#8220;Anti Corruption Laws&#8221;</font><font style="font-family:inherit;font-size:11pt;">), (ii) to the Company&#8217;s actual knowledge after making due inquiry, is under investigation by any U.S. or non U.S. governmental authority or agency </font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">B-7</font></div></div><hr style="page-break-after:always"><a name="s2ACEA14B3626BB74E849D4E107744177"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">for possible violation of Anti Corruption Laws, (iii) has been assessed civil or criminal penalties under any Anti Corruption Laws or (iv) has been or is the target of sanctions imposed by the United Nations or the European Union;</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(2)&#160;&#160;&#160;&#160;To the Company&#8217;s actual knowledge after making due inquiry, neither the Company nor any Controlled Entity has, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a governmental official or a commercial counterparty for the purposes of: (i) influencing any act, decision or failure to act by such governmental official in his or her official capacity or such commercial counterparty, (ii) inducing a governmental official to do or omit to do any act in violation of the governmental official&#8217;s lawful duty, or (iii) inducing a governmental official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder; and</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:61px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(3)&#160;&#160;&#160;&#160;No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any improper payments, including bribes, to any governmental official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage.  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Terms used in this certificate which are not defined shall have the meanings defined in the Agreement.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">c.&#160;&#160;&#160;&#160;The Agreement and the Notes have been duly authorized, executed and delivered by the Company and constitute the legal, valid and binding obligations of the Company, enforceable in accordance with their respective terms.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">d.&#160;&#160;&#160;&#160;The representations and warranties with respect to the Company and its Subsidiaries as set forth in </font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Exhibit&#160;B</font><font style="font-family:inherit;font-size:11pt;">&#32;to the Agreement are true and correct as though made at and as of this date (except to the extent such representations and warranties relate to another date, in which case such representations and warranties continue to be true and correct as of such earlier date).</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">e.&#160;&#160;&#160;&#160;The Decision 11&#8209;01&#8209;034 dated January&#160;27, 2011 of the Public Utilities Commission of the State of California (the </font><font style="font-family:inherit;font-size:11pt;font-style:italic;font-weight:bold;">&#8220;Order&#8221;</font><font style="font-family:inherit;font-size:11pt;">) is in full force and effect, and has not been revoked, rescinded, modified, or amended, all necessary actions have been taken by the Company to comply with and satisfy the conditions and obligations of the Company under the Order, and there are no proceedings pending or, to the knowledge of the Company threatened, affecting the validity of the Order or the ability of the Company to comply with or perform its obligations under the Order.</font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">EXHIBIT&#160;C</font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(to Note Agreement)</font></div></div><hr style="page-break-after:always"><a name="sA576697E7D503D1C7A03D4E107A55F10"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:120px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">f.&#160;&#160;&#160;&#160;The Company has performed and complied with all agreements and conditions in the Agreement which are required to be performed or complied with by the company before or at the date hereof.</font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">DATED:  _______________, 2014.</font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">SAN JOSE WATER COMPANY</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:330px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:312px;"><font style="font-family:inherit;font-size:11pt;">By</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">__________________________&#160;&#160;&#160;&#160;</font></div></td></tr></table><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Name:  W. Richard Roth</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Title:  President</font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman; font-size:10pt;"><tr><td style="width:330px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:312px;"><font style="font-family:inherit;font-size:11pt;">By</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">__________________________&#160;&#160;&#160;&#160;</font></div></td></tr></table><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Name:  James P. Lynch</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:624px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Title:  Chief Financial Officer</font></div><div style="line-height:140%;text-align:left;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:center;padding-left:330px;text-indent:-19px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">C-2</font></div></div><hr style="page-break-after:always"><a name="sA10DA4F6ED5F9DF9B998D4E107C45324"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">DESCRIPTION OF SPECIAL COUNSEL&#8217;S CLOSING OPINION</font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">[Delivered to Purchasers Only]</font></div><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;padding-top:18px;text-align:justify;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">EXHIBIT&#160;D</font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(to Note Agreement)</font></div></div><hr style="page-break-after:always"><a name="sFF18E079ED5A671D027AD4E107F63EB4"></a><div><div style="line-height:140%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><br><div style="line-height:140%;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">DESCRIPTION OF CLOSING OPINION OF COUNSEL TO THE COMPANY</font></div><div style="line-height:120%;font-size:11pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:98.71794871794873%;border-collapse:collapse;text-align:left;"><tr><td colspan="1"></td></tr><tr><td width="100%"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:77px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">&#160;</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:16px;padding-bottom:16px;padding-right:2px;"><div style="text-align:left;padding-left:9px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">[__________], 2014</font></div></td></tr></table></div></div><div style="line-height:120%;padding-top:24px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">John Hancock Life Insurance Company (U.S.A.)</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">John Hancock Life Insurance Company of New York</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">197 Clarendon Street</font></div><div style="line-height:120%;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Boston, Massachusetts  02116</font></div><table cellpadding="0" cellspacing="0" style="padding-top:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:34px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:120%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;">Re:</font></div></td><td style="vertical-align:top;padding-left:1.3333333333333333px;"><div style="line-height:120%;text-align:left;font-size:11pt;text-indent:-1.3333333333333333px;"><font style="font-family:inherit;font-size:11pt;font-weight:bold;text-decoration:underline;">Note Agreement dated as of January 24, 2014</font></div></td></tr></table><div style="line-height:120%;padding-bottom:16px;padding-top:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Ladies and Gentlemen:</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">We have acted as counsel for San Jose Water Company, a California corporation (the &#8220;</font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Company</font><font style="font-family:inherit;font-size:11pt;">&#8221;), in connection the Note Agreement, dated as of January 24, 2014 (the &#8220;</font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Note Agreement</font><font style="font-family:inherit;font-size:11pt;">&#8221;), by and among the Company, and each of the purchasers named in </font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Schedule I</font><font style="font-family:inherit;font-size:11pt;">&#32;hereto (the &#8220;</font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Purchasers</font><font style="font-family:inherit;font-size:11pt;">&#8221;), pursuant to which the Purchasers will purchase $50,000,000 aggregate principal amount of the Company&#8217;s 5.14% Senior Notes, due [__________], 2044 (the &#8220;</font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Notes</font><font style="font-family:inherit;font-size:11pt;">&#8221;).  Capitalized terms defined in the Note Agreement are used herein as therein defined, unless otherwise defined herein.  This opinion letter is being delivered to you pursuant to </font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Section&#160;4.2(c)</font><font style="font-family:inherit;font-size:11pt;">&#32;of the Note Agreement.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">In connection with this opinion letter, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the Articles of Incorporation and Bylaws of the Company and such other documents and records, and other instruments as we have deemed appropriate for purposes of the opinions set forth herein, including the following: </font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">A.&#160;&#160;&#160;&#160;the Note Agreement;</font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">B.&#160;&#160;&#160;&#160;the Notes issued as of the date of this opinion by the Company pursuant to the Note Agreement;</font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">C.&#160;&#160;&#160;&#160;the Certificate of James Lynch, Chief Financial Officer and Treasurer, Palle Jensen, Senior Vice President of Regulatory Affairs, and Suzy Papazian, Secretary of the Company dated the date hereof (the &#8220;</font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Officer&#8217;s Certificate</font><font style="font-family:inherit;font-size:11pt;">&#8221;);</font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">D.&#160;&#160;&#160;&#160;the Certificate of Good Standing of the Company certified by the Secretary of the State of California as of a recent date (the &#8220;</font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">California Certificate</font><font style="font-family:inherit;font-size:11pt;">&#8221;); and</font></div><div style="line-height:120%;padding-bottom:16px;text-align:justify;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">E.&#160;&#160;&#160;&#160;relevant provisions of the California Public Utilities Code applicable to the regulation of the Company, including those applicable to public utilities and their holding companies and governing the issuance of securities and the assumption of indebtedness by them; a copy of Application 10-07-022 filed July 23, 2010 with the California Public Utilities Commission (&#8220;</font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">CPUC</font><font style="font-family:inherit;font-size:11pt;">&#8221;) pertaining to certain </font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">EXHIBIT&#160;E</font></div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(to Note Agreement)</font></div></div><hr style="page-break-after:always"><a name="sFF18E079ED5A671D027AD4E107F63EB4"></a><div><div style="line-height:120%;padding-bottom:8px;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div></div><br><div style="line-height:120%;padding-bottom:16px;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">financing matters of the Company; and a copy of Decision 11-01-034 dated January 27, 2011 approving such financing matters.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The Note Agreement and the Notes are each individually referred to herein as an &#8220;</font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Opinion Document</font><font style="font-family:inherit;font-size:11pt;">&#8221; and they are collectively referred to herein as the &#8220;</font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Opinion Documents</font><font style="font-family:inherit;font-size:11pt;">&#8221;.  </font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">We have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of the documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as certified, facsimile or photostatic copies, and the authenticity of the originals of all documents submitted to us as copies.  We have also assumed that the Opinion Documents constitute valid and binding obligations of each party thereto other than the Company.  </font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">As to any facts that are material to the opinions hereinafter expressed that we did not independently establish or verify, we have relied without investigation upon the representations of the Company contained in the Opinion Documents and upon certificates</font><font style="font-family:inherit;font-size:11pt;font-weight:bold;">&#32;</font><font style="font-family:inherit;font-size:11pt;">of officers of the Company.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">In rendering the opinions set forth herein, whenever a statement or opinion set forth herein is qualified by &#8220;to our knowledge,&#8221; &#8220;known to us&#8221; or words of similar import, it is intended to indicate that, during the course of our representation of the Company in the subject transaction, no information has come to the attention of the individual lawyers in our Firm who have participated in the transactions to which this opinion relates, including Scott D. Karchmer, J. Michael Jack, and David V. Chang, that gives us actual knowledge of the inaccuracy of such statement or opinion.  We have not undertaken any independent investigation to determine the accuracy of facts material to any such statement or opinion, and no inference as to such statement or opinion should be drawn from the fact of our representation of the Company.  </font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Based upon and subject to the foregoing, and to the limitations and qualifications described below, we are of the opinion that:</font></div><div style="line-height:120%;padding-left:0px;padding-bottom:16px;text-align:left;"><font style="padding-bottom:16px;text-align:left;font-family:inherit;font-size:11pt;padding-right:48px;">1.</font><font style="font-family:inherit;font-size:11pt;">The Company is a corporation validly existing and in good standing under the laws of the State of California with the corporate power and authority to own its properties and to carry on its business as, to our knowledge, it is now conducted.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">2.&#160;&#160;&#160;&#160;The Company has the corporate power and authority to enter into and perform the Opinion Documents, has taken all necessary corporate action to authorize the execution, delivery and performance of such Opinion Documents and has duly executed and delivered such Opinion Documents.  </font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">3.&#160;&#160;&#160;&#160;Each Opinion Document is the valid and binding obligation of the Company enforceable against the Company in accordance with its terms.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">4.&#160;&#160;&#160;&#160;The execution and delivery by the Company of the Opinion Documents do not, and the performance by the Company of its obligations thereunder will not, (i) result in a violation of the Articles of Incorporation or Bylaws of the Company, (ii) result in a breach or a default under any agreement or instrument listed on </font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Exhibit A</font><font style="font-family:inherit;font-size:11pt;">&#32;hereto, (iii) result in the creation or imposition of a lien on any assets of the Company under any agreement or instrument listed on </font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Exhibit A</font><font style="font-family:inherit;font-size:11pt;">&#32;hereto; (iv) violate or be in conflict with any U.S. federal or California laws, rules or regulations applicable to the Company, or (v) require any approval, consent, permit, waiver or license from or filing with any governmental authority or court of the United States or the State of California, including the California Public Utilities Commission.</font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">E-2</font></div></div><hr style="page-break-after:always"><a name="sFF18E079ED5A671D027AD4E107F63EB4"></a><div><div style="line-height:120%;padding-bottom:8px;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div></div><br><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">5.&#160;&#160;&#160;&#160;Assuming the accuracy of the representations and warranties and compliance with the agreements contained in the Note Agreement, the issuance, sale and delivery of the Notes under the circumstances contemplated by the Note Agreement do not require registration under the Securities Act of 1933, as amended, qualification under the California Corporate Securities Law of 1968, as amended, or the qualification of an indenture under the Trust Indenture Act of 1939, as amended.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">6.&#160;&#160;&#160;&#160;The extension of credit made on the date hereof and the use of the proceeds thereof in accordance with the provisions of the Note Agreement do not violate the provisions of Regulations T, U or X of the Board of Governors of the Federal Reserve System.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">7.&#160;&#160;&#160;&#160;The Company is not an &#8220;investment company&#8221; within the meaning of, and subject to regulation under, the Investment Company Act of 1940, as amended.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">8.&#160;&#160;&#160;&#160;The Company is not a &#8220;holding company&#8221; or a &#8220;public-utility company&#8221; within the meaning of the Public Utility Holding Company Act of 2005, as amended.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">9.&#160;&#160;&#160;&#160;To our knowledge, there are no pending lawsuits or other proceedings against the Company or its properties before any court, arbitrator or governmental agency or authority that challenge the legality, validity or enforceability of the Opinion Documents.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">The opinions expressed above are subject to the following limitations, exceptions, qualifications and assumptions:</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">A.&#160;&#160;&#160;&#160;The opinions expressed herein are subject to bankruptcy, insolvency, fraudulent transfer and other similar laws affecting the rights and remedies of creditors generally and general principles of equity, including concepts of materiality, reasonableness, good faith and fair dealing. In addition, the enforceability of the Opinion Documents is subject to the effect of California Civil Code 1670.5, which provides that a court may refuse to enforce, or may limit the application of a contract or any clauses thereof, which the court finds as a matter of law to have been unconscionable at the time it was made.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">B.&#160;&#160;&#160;&#160;The opinions expressed in this opinion letter are limited to the laws of the States of California and the Federal laws of the United States of America, and we express no opinion with respect to the laws of any other state or jurisdiction.  </font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">C.&#160;&#160;&#160;&#160;For purposes of our opinion in </font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">paragraph 1</font><font style="font-family:inherit;font-size:11pt;">&#32;hereof as to the valid existence and good standing of the Company, we have relied solely upon a good standing certificate issued by the Secretary of State of the State of California.  </font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">D.&#160;&#160;&#160;&#160;For purposes of the opinions in </font><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">paragraph&#160;4</font><font style="font-family:inherit;font-size:11pt;">, we have considered such laws and regulations that in our experience are typically applicable to a transaction of the nature contemplated by the Opinion Documents as well as the California Public Utilities Code.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">E.&#160;&#160;&#160;&#160;Certain waivers by the parties to the Opinion Documents may relate to matters that cannot, as a matter of law, be effectively waived.  </font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">F.&#160;&#160;&#160;&#160;The enforceability of the Opinion Documents may be limited by the unenforceability under certain circumstances of provisions imposing penalties, forfeitures, late payment charges or an increase in interest rate upon delinquency in payment or an occurrence of default.</font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">E-3</font></div></div><hr style="page-break-after:always"><a name="sFF18E079ED5A671D027AD4E107F63EB4"></a><div><div style="line-height:120%;padding-bottom:8px;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div></div><br><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">G.&#160;&#160;&#160;&#160;We note that Section 1717 of the California Civil Code provides that where a contract permits one party to the contract to recover attorneys&#8217; fees, the prevailing party in any action to enforce any provision of the contract shall be entitled to recover its reasonable attorneys&#8217; fees.  </font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">H.&#160;&#160;&#160;&#160;We express no opinion as to:</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(i)&#160;&#160;&#160;&#160;The enforceability of any provision of the Opinion Documents permitting modification thereof only by means of an agreement in writing signed by the parties thereto.  Section 1698 of the California Civil Code provides that an oral modification to a contract may be enforced if the oral modification was performed notwithstanding a contrary provision in the document.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(ii)&#160;&#160;&#160;&#160;Any tax laws, environmental laws, pension and employee benefit laws, antitrust laws, or any municipal laws (including without limitation, any subdivision laws and regulations) or terms of any local agencies within the State of California.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;text-indent:96px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(iii)&#160;&#160;&#160;&#160;The effect of the law of any jurisdiction other than the State of California which limits the rate of interest legally chargeable or collectible.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">This opinion letter is effective only as of the date hereof.  We do not assume responsibility for updating this opinion letter as of any date subsequent to its date, and we assume no responsibility for advising you of any changes with respect to any matters described in this opinion letter that may occur subsequent to the date of this opinion letter or from the discovery, subsequent to the date of this opinion letter, of information not previously known to us pertaining to the events occurring prior to such date.</font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">This opinion letter is furnished by us solely for the benefit of the Purchasers and their respective successors and permitted assigns pursuant to the Note Agreement, and this opinion letter may not be relied upon by such parties for any other purpose or by any other person or entity for any purpose whatsoever or quoted in whole or in part or otherwise referred to or used or furnished to any other person without our express written consent.  </font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Notwithstanding the preceding paragraph of this opinion, each of the Purchasers and their permitted transferees may furnish a copy of this opinion (i) to its independent auditors and attorneys if required in the performance of professional services for such Purchaser or transferee, (ii) to any state or federal authority, or independent insurance board or body, having regulatory jurisdiction over such Purchaser or transferee, including without limitation anyone using the information to rate or classify such Purchaser or transferee or the Notes, and (iii) pursuant to order or legal process of any court or governmental agency.  </font></div><div style="line-height:120%;padding-bottom:16px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">In addition, the Purchasers&#8217; counsel, Chapman and Cutler LLP, may rely on and refer to this opinion in providing their opinion to the Purchasers in connection with this transaction.</font></div><div style="line-height:120%;padding-bottom:64px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Very truly yours,</font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">E-4</font></div></div><hr style="page-break-after:always"><a name="sFF18E079ED5A671D027AD4E107F63EB4"></a><div><div style="line-height:120%;padding-bottom:8px;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div></div><br><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">SCHEDULE I</font><font style="font-family:inherit;font-size:11pt;">&#32;<br></font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">Purchasers</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">&#32;<br>1.  John Hancock Life Insurance Company (U.S.A.)</font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">2.  John Hancock Life Insurance Company of New York</font></div><div style="line-height:120%;padding-bottom:64px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">E-5</font></div></div><hr style="page-break-after:always"><a name="sFF18E079ED5A671D027AD4E107F63EB4"></a><div><div style="line-height:120%;padding-bottom:8px;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div></div><br><div style="line-height:120%;padding-bottom:16px;text-align:center;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;text-decoration:underline;">EXHIBIT A</font></div><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">1.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$20,000,000 8.58% Senior Notes, Series A due July 1, 2022, issued pursuant to those certain Note Agreements dated July 1, 1992, as amended by that certain First Amendment to Note Agreements dated as of December 1, 1995 and that certain Second Amendment to Note Agreements dated as of February 15, 2000.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">2.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$30,000,000 7.37% Senior Notes, Series B due January 1, 2024, issued pursuant to those certain Note Agreements dated as of October 1, 1993, as amended by that certain First Amendment to Note Agreements dated as of February 15, 2000.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">3.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$10,000,000 9.45% Senior Notes, Series C due November 1, 2020, issued pursuant to those certain Exchange Agreements dated as of October 1, 1993, as amended by that certain First Amendment to Exchange Agreements dated as of February 15, 2000.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">4.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$15,000,000 7.15% Senior Notes, Series D due January 1, 2026 issued pursuant to those certain Note Agreements dated as of December 1, 1995, as amended by that certain First Amendment to Note Agreements dated as of February 15, 2000.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">5.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$15,000,000 6.81% Senior Notes, Series E due December 1, 2028 issued pursuant to that certain Note Agreement dated as of December 1, 1998, as amended by that certain First Amendment to Note Agreement dated as of February 15, 2000.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">6.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$20,000,000 7.20% Senior Notes, Series F due September 1, 2031 issued pursuant to those certain Note Agreements dated as of September 1, 2001.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">7.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$20,000,000 5.93% Senior Notes, Series G due September 1, 2033 issued pursuant to that certain Note Agreement dated as of September 2, 2003.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">8.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$20,000,000 5.71% Senior Notes, Series H due January 1, 2037 issued pursuant to that certain Note Agreement dated as of January 23, 2007.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">9.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$20,000,000 5.93% Senior Notes, Series I due December&#160;17, 2037 issued pursuant to that certain Note Agreement dated as of December&#160;17, 2007.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">10.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$10,000,000 6.54% Senior Notes, Series J due February&#160;1, 2024 issued pursuant to that certain Note Agreement dated as of February&#160;2, 2009.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">11.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">$20,000,000 6.75% Senior Notes, Series K due May 15, 2039 issued pursuant to that certain Note Agreement dated as of May 15, 2009.</font></div></td></tr></table><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">E-6</font></div></div><hr style="page-break-after:always"><a name="sFF18E079ED5A671D027AD4E107F63EB4"></a><div><div style="line-height:120%;padding-bottom:8px;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7.5pt;"><font style="font-family:inherit;font-size:7.5pt;"><br></font></div></div><br><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">12.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Credit Agreement between the Company and Wells Fargo Bank, National Association dated as of March 1, 2012, as amended by that certain First Amendment to Credit Agreement dated as of January 11, 2013.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">13.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Funding Agreement between the State of California Department of Water Resources and San Jose Water Company dated as of January 18, 2005 for a loan of $2,474,000.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">14.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Funding Agreement between the State of California Department of Health Services and San Jose Water Company dated as of March 13, 2007 for a loan of $1,660,250, as amended by that certain Amendment A&#8209;1 dated as of January&#160;31, 2008.</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:18px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:140%;font-size:11pt;padding-left:0px;"><font style="font-family:inherit;font-size:11pt;">15.</font></div></td><td style="vertical-align:top;"><div style="line-height:140%;text-align:justify;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">Loan Agreement between the California Pollution Control Financing Authority and San Jose Water Company dated as of June 1, 2010 for a loan of $50,000,000 at 5.10% due June 1, 2040. </font></div></td></tr></table><div style="line-height:140%;padding-top:18px;text-align:justify;padding-left:48px;text-indent:-48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:140%;padding-top:18px;text-align:center;text-indent:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:120%;padding-bottom:64px;text-align:left;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><br><div><div style="line-height:140%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">E-7</font></div></div>	</body>
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