UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934


Date of Report: May 7, 2008
(Date of earliest event reported)

YWC LOGO

THE YORK WATER COMPANY
(Exact name of registrant as specified in its charter)


PENNSYLVANIA
0-690
23-1242500
(State or other jurisdiction
(Commission
(I.R.S. Employer
of incorporation)
File Number)
Identification No.)
 
130 EAST MARKET STREET
YORK, PENNSYLVANIA
 
17401
(Address of principal executive offices)
(Zip Code)

(717) 845-3601
(Registrant's telephone number, including area code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)


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:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
 

THE YORK WATER COMPANY


Item 1.01
Entry into a Material Definitive Agreement .

On May 7, 2008, The York Water Company (“we” or “us”) entered into a loan agreement and a reimbursement, credit and security agreement, which are described in Item 2.03 of this report and are incorporated by reference into this Item 1.01.

Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On May 7, 2008, the Pennsylvania Economic Development Financing Authority, or PEDFA, issued $12,000,000 aggregate principal amount of Exempt Facilities Revenue Refunding Bonds, Series A 2008 (the “bonds”) for our benefit pursuant to the terms of a Trust Indenture (the “indenture”), entered into on May 7, 2008 and dated as of May 1, 2008, between PEDFA and Manufacturers and Traders Trust Company, as Trustee.  PEDFA then loaned the proceeds of the offering of the bonds to us pursuant to a Loan Agreement (the “loan agreement”), entered into on May 7, 2008 and dated as of May 1, 2008, between us and PEDFA.  The loan agreement provides for a $12,000,000 loan with a maturity date of October 1, 2029.  Amounts outstanding under the loan agreement are our direct general obligations. The proceeds of the loan were used to redeem PEDFA Exempt Facilities Revenue Bonds, Series B of 2004 issued by PEDFA on December 9, 2004.

Borrowings under the loan agreement bear interest at a variable rate as determined by PNC Capital Markets, as Remarketing Agent, on a periodic basis elected by us.  We have currently elected that the interest rate be determined on a weekly basis.  The Remarketing Agent determines the interest rate based on then current market conditions in order to determine the lowest interest rate which would cause the bonds to have a market value equal to the principal amount thereof plus accrued interest thereon.

Pursuant to the indenture and the loan agreement, while the bonds bear interest at a weekly rate they are subject to redemption by PEDFA, upon our written request, in whole or in part at any time, in certain authorized denominations, at a redemption price of 100% of the principal amount redeemed plus accrued interest, if any, to the redemption date.  Such redemption by PEDFA will be to the full extent of funds either made available for such purpose by us or already on deposit in the Trustee’s debt service fund.  In addition, if interest paid to bondholders pursuant to the indenture becomes taxable to them, the indenture may require PEDFA to redeem the bonds.  If redemption of the bonds is required pursuant to the provisions of the indenture, the agreement provides that we are to promptly make payments sufficient to pay the principal of, premium, if any, and interest on the bonds due on such redemption date.  As of May 7, 2008, the interest rate under the loan agreement was 2.61%.

The loan agreement further provides that, in the event we fail to make any of the payments required under the loan agreement, the item or installment so in default will continue as an obligation until the amount in default has been fully paid, and we will pay the same with interest thereon, to the extent permitted by law, from the date when such payment was due as provided in the indenture.  In addition, if, subsequent to a date on which we are obligated to make payments, losses are incurred in respect of any investments, or any other event has occurred causing the money in the debt service fund established under the indenture, together with any other money then held by the Trustee and available for the purpose, to be less than the amount sufficient at the time of such occurrence or other event to pay all debt service due and payable or to become due and payable on the bonds, the Trustee will notify us of such fact and thereafter we will pay to the Trustee for deposit in the debt service fund the amount of any such deficiency.  Furthermore, the loan agreement provides that, in the event payment of the principal of and the interest on the bonds is accelerated upon the occurrence of an event of default under the indenture, all amounts payable under the loan agreement for the remainder of the term will become immediately due and payable.

 
Page 2
 


The loan agreement contains certain covenants and provisions that affect us, including, without limitation, covenants and provisions that:

·  
restrict our ability to create or incur indebtedness (subject to enumerated exceptions);
 
·  
restrict our ability to create or incur certain liens on our property (subject to enumerated exceptions); and
 
·  
in certain limited circumstances, restrict our ability to declare or pay any dividends on any shares of our capital stock, purchase or redeem any shares of our capital stock or make any other payment or distribution in respect of our capital stock (subject to enumerated exceptions).
 
In order to keep variable interest rates down and to enhance the marketability of the bonds, we entered into a Reimbursement, Credit and Security Agreement with PNC Bank, National Association (the “bank”) dated as of May 1, 2008.  This agreement provides for a three-year direct pay letter of credit issued by the bank for our account authorizing the Trustee to make one or more draws on the bank up to an aggregate of $12,185,425 for the principal amount and accrued interest on the bonds.  This agreement holds the bank responsible for providing the Trustee with funds for the timely payment of the principal of and interest on the bonds and for the purchase price of the bonds that have been tendered or deemed tendered for purchase and have not been remarketed.  Pursuant to the terms of this agreement, we must reimburse the bank the same day as regular interest payments are made, and within fourteen months for the purchase price of tendered bonds that have not be remarketed.  The reimbursement period for the principal is immediate at maturity, upon default by us, or if the bank does not renew the letter of credit.  All payments due to the bank under this agreement bear interest at a fluctuating rate per annum as set forth in the agreement.

The reimbursement, credit and security agreement contains certain covenants and provisions that affect us, including, without limitation, covenants and provisions that:

·  
require that we maintain a minimum equity to capitalization ratio of not less than 38%, as of the end of each fiscal quarter for the quarter then ending;
 
·  
require that we maintain a minimum interest coverage ratio of not less than 1.80 to 1.00, as of the end of each fiscal quarter for the four quarters then ending;
 
·  
restrict our ability to create or incur certain liens on our property (subject to enumerated exceptions); and
 
·  
limit our ability to call the bonds for optional redemption.
 
A copy of the Loan Agreement is filed as Exhibit 10.1 to this report. A copy of the Trust Indenture relating to the bonds is filed as Exhibit 10.2 to this report.  A copy of the Reimbursement, Credit and Security Agreement is filed as Exhibit 10.3 to this report.


 
Page 3
 


Item 9.01
Financial Statements and Exhibits.

(d) Exhibits
 
 
10.1
 
10.2
 
10.3
 


 
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 THE YORK WATER COMPANY


SIGNATURES



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.
 

 
 
 
THE YORK WATER COMPANY
 
       
Date: May 12, 2008
By:
/s/ Kathleen M. Miller    
   
Kathleen M. Miller
 
   
Chief Financial Officer
 
       

 
 
Page 5
 

EXHIBIT INDEX

Exhibit Number
Document
 
10.1
Loan Agreement between Pennsylvania Economic Development Financing Authority and The York Water Company, entered into May 7, 2008 and dated as of May 1, 2008.
 
10.2
Trust Indenture between Pennsylvania Economic Development Financing Authority and Manufacturers and Traders Trust Company, entered into May 7, 2008 and dated as of May 1, 2008.
 
10.3
Reimbursement, Credit and Security Agreement between The York Water Company and PNC Bank, National Association, entered into May 7, 2008 and dated as of May 1, 2008.
 


 
Page 6
 

EXHIBIT 10.1


LOAN AGREEMENT
 
BETWEEN
 
PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY
(the "ISSUER")
 
AND
 
THE YORK WATER COMPANY
(the "COMPANY")
 
DATED AS OF MAY 1, 2008

 
 
 
 

TABLE OF CONTENTS

ARTICLE I DEFINITIONS AND CERTAIN RULES OF INTERPRETATION 
SECTION 1.1. Definitions. 
SECTION 1.2. Certain Rules of Interpretation. 
 
ARTICLE II REPRESENTATIONS 
SECTION 2.1. Representations and Findings of Issuer. 
SECTION 2.2. Representations by the Company. 
 
ARTICLE III LOAN AND REPAYMENT; OPERATION OF PROJECT FACILITIES 
SECTION 3.1. Loan of Bond Proceeds. 
SECTION 3.2. Repayment of Loan. 
SECTION 3.3. Operation. 
SECTION 3.4. Insurance. 
SECTION 3.5. Maintenance and Repair. 
SECTION 3.6. Right to Discontinue Operation of Project Facilities.
SECTION 3.7. Insurance and Condemnation Awards. 
SECTION 3.8. Workers' Compensation Coverage. 
SECTION 3.9. Taxes, Claims for Labor and Materials, Compliance with Laws. 
SECTION 3.10. Issuer's Limited Liability. 
SECTION 3.11. Right of Inspection. 
 
ARTICLE IV ISSUANCE OF 2008A BONDS; SECURITY; INVESTMENTS 
SECTION 4.1. Issuance of 2008A Bonds.
SECTION 4.2. Security for the 2008A Bonds. 
SECTION 4.3. Reserved. 
SECTION 4.4. Investment of Funds. 
 
ARTICLE V COMPANY OBLIGATIONS; PROVISIONS FOR PAYMENT; COVENANTS 
SECTION 5.1. Company Approval of Issuance of 2008A Bonds.
SECTION 5.2. Refunding of 2008A Bonds. 
SECTION 5.3. Redemption of 2008A Bonds. 
SECTION 5.4. Installment Loan Payments. 
SECTION 5.5. Administrative Expenses. 
SECTION 5.6. Payments to Issuer and Local IDA. 
SECTION 5.7. Obligations of the Company Absolute and Unconditional. 
SECTION 5.8. Option to Prepay Amounts Under Loan Agreement in Certain Events. 
SECTION 5.9. Company's Performance Under Indenture. 
SECTION 5.10. Covenants Regarding Tax Exemption. 
SECTION 5.11. Company's Option to Remarket 2008A Bonds Purchased in Lieu of Redemption.
SECTION 5.12. Nondiscrimination – Sexual Harassment. 
SECTION 5.13. Rate Mode Conversion. 
SECTION 5.14. Letter of Credit Facility. 
 
ARTICLE VI PARTICULAR AGREEMENTS 
SECTION 6.1. Indemnified Party's Release and Indemnification Provisions.
SECTION 6.2. Maintenance of Corporate Existence. 
SECTION 6.3. Financial Information. 
SECTION 6.4. Agreement of Issuer Not to Assign or Pledge. 
SECTION 6.5. Reference to 2008A Bonds Ineffective after 2008A Bonds Paid. 
SECTION 6.6. Assignment, Sale or Lease of Project Facilities. 
SECTION 6.7. Amendment of Loan Agreement or Indenture. 
SECTION 6.8. Waiver of Vendor’s Lien. 
SECTION 6.9. Limitations on Indebtedness. 
SECTION 6.10. Limitation on Liens. 
SECTION 6.11. Dividends, Stock Purchases. 
SECTION 6.12. Termination of Pension Plans. 
 
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES 
SECTION 7.1. Defaults and Remedies. 
SECTION 7.2. Annulment of Acceleration.
SECTION 7.3. Agreement to Pay Attorneys’ Fees and Expenses.
SECTION 7.4. General Enforcement Provisions. 
SECTION 7.5. Notice of Default. 
SECTION 7.6. Unassigned Issuer’s Rights. 
 
ARTICLE VIII MISCELLANEOUS 
SECTION 8.1. Term of Loan Agreement. 
SECTION 8.2. Notices. 
SECTION 8.3. Benefit of Parties. 
SECTION 8.4. Severability. 
SECTION 8.5. Counterparts. 
SECTION 8.6. Captions.
SECTION 8.7. Law Governing Construction of Loan Agreement.
SECTION 8.8. Payments on Non-Business Days.
SECTION 8.9. Payments to be Sufficient to Meet DTC Requirements. 
SECTION 8.10. Reserved. 
SECTION 8.11. Limitation of Liability; No Personal Liability.

EXHIBIT A – NONDISCRIMINATION/SEXUAL HARASSMENT CLAUSE


 
 
 
 

LOAN AGREEMENT
This Loan Agreement dated as of May 1, 2008, between the Pennsylvania Economic Development Financing Authority (the "Issuer"), a public instrumentality of the Commonwealth of Pennsylvania (the "Commonwealth") and a public body corporate and politic organized and existing under the Pennsylvania Economic Development Financing Law, as amended (the "Act"), and The York Water Company, a Pennsylvania corporation (the "Company"),

WITNESSETH:
WHEREAS, the Issuer is empowered by the provisions of the Act to enter into agreements providing for the financing of the acquisition, construction and equipping of industrial, commercial and specialized enterprises for the public for purposes of alleviating unemployment, maintaining employment at a high level and encouraging economic development in the Commonwealth of Pennsylvania and promoting the health, safety and general welfare of the people of the Commonwealth of Pennsylvania within the meaning of the Act, including water utility facilities; and

WHEREAS, the Issuer has previously determined to issue several series of its Exempt Facilities Revenue Bonds (The York Water Company Project) (collectively, the "2004 Bonds") to provide funds to loan to The York Water Company (the "Company") for the financing of costs associated with the construction of a water intake pumping station adjacent to the Susquehanna River and a water main pipeline, together with related pumps, fittings, valves and other water infrastructure system improvements, all for the purpose of providing an additional source of surface water supply to meet the needs of the Company’s residential, commercial and industrial customers (the "Project Facilities") and paying some or all of the costs of issuance of the 2004 Bonds; and
 
WHEREAS, on April 7, 2004, the Issuer issued $7,300,000 aggregate principal amount of the 2004 Bonds designated "Series A of 2004" (the "Series 2004A Bonds") which funded a portion of the costs of the Project Facilities; and
 
WHEREAS, on December 9, 2004, the Issuer issued $12,000,000 aggregate principal amount of the 2004 Bonds designated "Series B of 2004" (the "Series 2004B Bonds") which also funded a portion of the costs of the Project Facilities; and
 
WHEREAS, the Series 2004B Bonds are insured by a financial guaranty insurance policy issued by XL Capital Assurance, Inc.(the "Insurer"); and
 
WHEREAS, due to the recent disruption in the municipal bond market, the Issuer, at the request of the Company, has determined to replace the Insurer through the issuance of its refunding bonds, and therefore has authorized the issuance of $12,000,000 Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project) (the "2008A Bonds"), the proceeds of which will be used, together with certain other available funds, to redeem $12,000,000 principal amount of the Series 2004B Bonds (the "Project"); and
 
WHEREAS, the Issuer will enter into this Loan Agreement with the Company, providing for the loan by the Issuer to the Company of the proceeds of the 2008A Bonds for such purpose and the repayment of such loan by the Company; and

WHEREAS, the 2008A Bonds are to be issued under a Trust Indenture dated as of May 1, 2008 (the "Indenture") between the Issuer and Manufacturers and Traders Trust Company, as Trustee (the "Trustee"); and

WHEREAS, the 2008A Bonds and the interest thereon are and shall be payable from funds drawn under an irrevocable, direct-pay Letter of Credit (the "Letter of Credit") to be issued by PNC Bank, National Association (the "Bank").  Concurrently with the issuance of the 2008A Bonds and the Letter of Credit by the Bank, the Company will enter into a Reimbursement, Credit and Security Agreement, dated as of May 1, 2008 (the "Reimbursement Agreement") with the Bank; and
 
WHEREAS, the Trustee has agreed under the Indenture to draw on the Letter of Credit at such times and in such amounts as shall be sufficient to pay when due the principal and interest on the 2008A Bonds and to credit all amounts paid under the Letter of Credit against the Company’s obligation to make payments under this Loan Agreement for such items; and
 
WHEREAS, this Loan Agreement (and the loan payments payable hereunder) is being assigned by the Issuer to the Trustee as security for the 2008A Bonds; and

NOW THEREFORE, in consideration of the covenants and agreements herein made, and subject to the conditions herein set forth, the Issuer and the Company, intending to be legally bound, covenant and agree as follows:

ARTICLE I
 
DEFINITIONS AND CERTAIN RULES OF INTERPRETATION
 
SECTION 1.1.   Definitions .
 
All words and terms as used in this Loan Agreement shall have the same meanings given such words and terms in the Indenture, unless the context or use clearly indicates another or different meaning or intent.  In addition, the terms defined in the recitals to this Loan Agreement shall have the meanings set forth therein and the following words and terms as used in this Loan Agreement shall have the following meanings, unless the context or use clearly indicates another or different meaning or intent:

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

"Capitalized Rentals" shall mean as of the date of any determination the amount at which the aggregate Rentals due and to become due under all Capitalized Leases under which the Company is a lessee would be reflected as a liability on a balance sheet of the Company.

"Consolidated Current Assets" and "Consolidated Current Liabilities" shall mean such assets and liabilities of the Company and its subsidiaries on a consolidated basis as shall be determined in accordance with generally accepted accounting principles to constitute current assets and current liabilities, respectively.

"Costs of Issuance" means all costs and expenses incurred by the Issuer, the Local IDA or the Company in connection with the issuance and sale of the 2008A Bonds, including without limitation (i) fees and expenses of accountants, attorneys, engineers, credit enhancers and financial advisors, (ii) materials, supplies, and printing and engraving costs, (iii) recording and filing fees, (iv) rating agency fees, (v) the initial and first year's annual fees and expenses (including, without limitation, counsel fees and expenses) of the Trustee, the Paying Agent and the Remarketing Agent, (vi) any underwriters' discount or fee and expenses, (vii) the Issuer's issuance fee and administrative and overhead expenses as provided in Section 6.6 of this Loan Agreement, and (viii) fees and expenses relating to the provision of any liquidity facility.

"County" means the County of York, a political subdivision of the Commonwealth.

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

"Default" shall mean any event or condition, the occurrence of which would, with the lapse of time or the giving of notice, or both, constitute an Event of Default as defined in Section 8.1 hereof.

"Environmental Legal Requirement" shall mean any applicable law relating to public health, safety or the environment, including, without limitation, relating to releases, discharges or emissions to air, water, land or groundwater, to the withdrawal or use of groundwater, to the use and handling of polychlorinated biphenyls or asbestos, to the disposal, treatment, storage or management of solid or hazardous wastes or to exposure to toxic or hazardous materials, to the handling, transportation, discharge or release of gaseous or liquid substances and any regulation, order, notice or demand issued pursuant to such statute or ordinance, in each case applicable to the Property of the Company or the operation, construction or modification of any thereof, including without limitation the following: the Clean Air Act, the Federal Water Pollution Control Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the Comprehensive Environmental Response Compensation and Liability Act as amended by the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act as amended by the Solid and Hazardous Waste Amendments of 1984, the Occupational Safety and Health Act, the Emergency Planning and Community Right-to-Know Act of 1986, the Solid Waste Disposal Act, the Pennsylvania Safe Drinking Water Act and any other state statutes addressing similar matters, and any state statute providing for financial responsibility for cleanup or other actions with respect to the release or threatened release of hazardous substances and any state nuisance statute.

"Excepted Encumbrances" shall mean any of the following:

(a)   liens for taxes, assessments or governmental charges not delinquent and liens for workers' compensation awards and similar obligations not delinquent and undetermined liens or charges incidental to construction;
 
(b)   any liens securing Indebtedness neither assumed nor guaranteed by the Company on which it customarily pays interest, existing in or relating to real estate acquired by the Company for transmission, distribution or right-of-way purposes;
 
(c)   easements or reservations in any Property of the Company created for the purpose of roads, railroads, railroad side tracks, water and gas transmission and distribution mains, conduits, water power rights of the Commonwealth of Pennsylvania or others, building and use restrictions and defects of title to, or leases of, any parts of the Property of the Company which do not in the opinion of the Company's counsel materiality impair the use of the Property as an entirety in the operation of the business of the Company;
 
(d)   undetermined liens and charges incidental to current construction, including mechanics', laborers', materialmen's and similar liens not delinquent;
 
(e)   any obligations or duties affecting the Property of the Company to any municipality or public authority with respect to any franchise, grant, license, permit or certificate;
 
(f)   rights reserved to or vested in any municipality or public authority to control or regulate any Property of the Company or to use such Property in a manner which does not materially impair the use of such Property for the purposes for which it is held by the Company; or
 
(g)   judgments in course of appeal or otherwise in contest and secured by sufficient bond or security.
 
"Excepted Property" shall mean (a) cash, bonds, stocks, obligations and other Securities; (b) choses in action, accounts and bills receivable, judgments and other evidences of Indebtedness and contracts, leases and operating agreements; (c) stock in trade, merchandise, equipment, apparatus, materials or supplies manufactured or acquired for the purpose of sale and/or resale in the usual course of business or consumable in the operation of any of the Properties of the Company or held for the purpose of repairing or replacing (in whole or in part) any rolling stock, business, motor coaches, trucks, automobiles or other vehicles or aircraft; (d) timber, gas, oil, minerals (including developed and undeveloped natural gas reserves and natural gas in underground storage or otherwise), mineral rights and royalties; (e) materials or products generated, manufactured, produced or purchased by the Company for sale, distribution or use in the ordinary course of its business; (f) rolling stock, buses, motor coaches, trucks, automobiles and other vehicles and all aircraft; and (g) the Company's franchise to be a corporation.

"Funded Debt" of any Person shall mean (a) all Indebtedness 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 included in Consolidated Current Liabilities, (b) all Capitalized Rentals, and (c) all Guaranties of Indebtedness of others.

"Guaranties" by any Person shall mean all obligations (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect, guaranteeing any Indebtedness, dividend or other obligation, of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, all obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any Property or assets constituting security therefor, (b) to advance or supply funds (1) for the purchase or payment of such Indebtedness or obligation, (2) 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, or (c) 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 (d) 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.

"Indebtedness" 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 (a) obligations of such Person for borrowed money or which has been incurred in connection with the acquisition of Property or assets, (b) obligations secured by any lien or other charge upon Property or assets owned by such Person, even though such Person has not assumed or become liable for the payment of such obligations, (c) obligations created or arising 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, and (d) Capitalized Rentals under any Capitalized Lease.  For the purpose of computing the "Indebtedness" 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 assets of such Person.

"Indemnified Parties" means the Issuer, the Trustee, the Paying Agent and any of their respective officers, directors, members, commissioners, employees, agents, servants and any other person acting for or on behalf of the Issuer, the Trustee or the Paying Agent.

"Installment Loan Payment(s)" means payments required to be made by the Company to pay (i) the Debt Service on the 2008A Bonds, as provided for in Section 6.4(b)(1), (c), (d) and (f) of this Loan Agreement, including the principal of, premium, if any (whether at stated maturity, upon redemption prior to stated maturity, or upon acceleration of stated maturity), and interest on the 2008A Bonds when due and (ii) the Purchase Price on the 2008A Bonds, as defined and provided for in Section 6.4(b)(2) of this Loan Agreement.

"Loan Agreement" means this Loan Agreement, and all amendments and supplements hereto.

"Local IDA" means the York County Industrial Development Authority, a governmental entity of the Commonwealth in its capacity as an applicant sponsor for the Project.

"Plant Account" shall mean the plant account under the Pennsylvania Public Utilities Commission Uniform System of Accounts for Water Utilities dated November 21, 1946, as the same may be amended from time to time.

"Project Facilities" means the facilities described in the recitals hereto financed by the 2004 Bonds.

"Property" shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

"Rentals" shall mean and include all fixed rents (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, 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 (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes and similar charges.  Fixed rents under any so-called "percentage leases" shall be computed solely on the basis of the minimum rents, if any, required to be paid by the lessee regardless of sales volume or gross revenues.

"Seasonal Indebtedness" as of the date of any determination thereof shall mean (a) all Indebtedness for money borrowed other than Funded Debt and (b) Guaranties of Seasonal Indebtedness of others.

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

"Unassigned Issuer's Rights" means all of the rights of the Issuer to receive insurance under Section 4.4 hereof, to inspect the Project Facilities under Section 4.11 hereof, to receive payments and to be reimbursed for attorney's and other fees and expenses under Sections 6.6 and 8.3 hereof, to be held harmless and indemnified under Section 7.1 hereof, to receive information under Section 7.3, and, to the extent provided in this Agreement, to give or withhold consent to or approval of amendments, modifications, and terminations of this Agreement.

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

SECTION 1.2.   Certain Rules of Interpretation .
 
(a)   The definitions set forth in Article I and in the Indenture shall be equally applicable to both the singular and plural forms of the terms therein defined and shall cover all genders.
 
(b)   "Herein," "hereby," "hereunder," "hereof," "hereinbefore," "hereinafter" and other equivalent words refer to this Loan Agreement and not solely to the particular Article, Section or Subdivision hereof in which such word is used.
 
(c)   Reference herein to an article number ( e.g. , Article IV) or a section number ( e.g. , Section 6.2) shall be construed to be a reference to the designated article number or section number hereof unless the context or use clearly indicates another or different meaning or intent.
 
(d)   Words of the masculine gender shall mean and include correlative words of the feminine and neuter genders and words importing the singular number shall mean and include the plural number and vice versa.
 
(e)   Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons.
 
(f)   Any headings preceding the text of the several Articles and Sections of this Loan Agreement, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Loan Agreement, nor shall they affect its meaning, construction or effect.
 
(g)   References to statutes or regulations are to be construed as including all statutory or regulatory provisions consolidating, amending or replacing the statute or regulation referred to; and references to agreements and other contractual instruments shall be deemed to include any exhibits and appendices attached thereto and all amendments, supplements and other modifications to such instruments, but only to the extent such amendments, supplements and other modifications are not prohibited by the terms of this Loan Agreement.
 
(h)   Whenever in this Loan Agreement, the Issuer, the Company, the Bank, the Paying Agent or the Trustee is named or referred to, it shall include, and shall be deemed to include, its respective successors and assigns whether so expressed or not.  All of the covenants, stipulations, obligations and agreements by or on behalf of, and other provisions for the benefit of, the Issuer, the Company, the Bank, the Paying Agent and the Trustee contained in this Loan Agreement shall inure to the benefit of such respective successors and assigns, bind and shall, inure to the benefit of any officer, board, commission, authority, agency or instrumentality to whom or to which there shall be transferred by or in accordance with law any right, power or duty of the Issuer or of its successors or assigns, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions of this Loan Agreement.
 
(i)   Every "request," "order," "demand," "application," "appointment," "notice," "statement," "certificate," "consent," "direction" or similar action hereunder by persons referred to herein shall, unless the form thereof is specifically provided, be in writing and signed by an Authorized Representative of the person giving it.
 
ARTICLE II
 
REPRESENTATIONS
 
SECTION 2.1.   Representations and Findings of Issuer .
 
The Issuer hereby confirms its findings and represents that:

(a)   Organization .  The Issuer is a public body corporate and politic established in the Commonwealth pursuant to the laws of the Commonwealth including the Act.  Under the Act, the Issuer has the power to enter into the Indenture, this Loan Agreement and the Underwriting Agreement and to carry out its obligations thereunder and hereunder and to issue the 2008A Bonds to redeem and refinance the Series 2004 B Bonds.
 
(b)   Pending Litigation .  To the knowledge of the Issuer, there are no actions, suits, proceedings, inquiries or investigations pending or threatened against or affecting the Issuer in any court or before any governmental authority or arbitration board or tribunal, which involve the possibility of materially and adversely affecting the transactions contemplated by the Financing Documents or which, in any way, would adversely affect the validity or enforceability of the Financing Documents or the ability of the Issuer to perform its obligations under the Financing Documents.
 
(c)   [Reserved .]
 
(d)   [ Reserved .]
 
(e)   [ Reserved .]
 
(f)   [ Reserved .]
 
(g)   No Other Pledges .  The Issuer has not and will not pledge the income and Revenues derived from this Loan Agreement or its other interests in this Loan Agreement or the Indenture other than pursuant to and as set forth in the Indenture.
 
(h)   No Conflicts .  The execution, delivery and performance by the Issuer of this Loan Agreement and the Indenture and the issuance of the 2008A Bonds will not conflict with or create a breach of or default under the Act or other applicable law or any agreement or instrument to which the Issuer is a party or by which it is bound.
 
(i)   Agreements Are Legal and Authorized .  The adoption of the Bond Resolution, the issuance and sale of the 2008A Bonds and the execution and delivery by the Issuer of the Financing Documents, and the compliance by the Issuer with all of the provisions of each thereof and of the 2008A Bonds, (i) are within the powers and authority of the Issuer, (ii) have been done in full compliance with the provisions of the Act, are legal and will not conflict with or constitute on the part of the Issuer a violation of or a breach of or default under, or result in the creation of any lien, charge or encumbrance upon any property of the Issuer (other than as contemplated by this Loan Agreement and the Indenture) under the provisions of, any by-law or other agreement or instrument to which the Issuer is a party or by which the Issuer is bound, or any license, judgment, decree, law, statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Issuer or any of its activities or properties and (iii) have been duly authorized by all necessary action on the part of the Issuer.
 
(j)   Governmental Consents .  Neither the nature of the Issuer nor any of its activities or properties, nor any relationship between the Issuer and any other Person, nor any circumstance in connection with the offer, issue, sale or delivery of any of the 2008A Bonds is such as to require the consent, approval or authorization of, or the filing, registration or qualification with, any governmental authority on the part of the Issuer in connection with the execution, delivery and performance of the Financing Documents or the offer, issue, sale or delivery of the 2008A Bonds, other than those already obtained as of the Issue Date; provided, however, no representation is made herein as to compliance with the securities or "blue sky" laws of any jurisdiction.
 
(k)   No Defaults .  No event has occurred and no condition exists with respect to the Issuer which would constitute an "Event of Default" as defined in the Indenture or which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Indenture.
 
(l)   Limited Obligations .  The 2008A Bonds shall be limited obligations of the Issuer and shall be payable only from Revenues.  Neither the faith and credit nor the taxing power of the Commonwealth, the Issuer, or any other political corporation, subdivision or agency thereof is pledged to the payment of the principal of and premium, if any, or interest on such 2008A Bonds.
 
(m)   Requirements Satisfied .  All requirements and conditions specified in the Act and all other laws and regulations applicable to the adoption of the Bond Resolution, the execution and delivery of this Loan Agreement and the Indenture, and the issuance and delivery of the 2008A Bonds will be fulfilled prior to the initial delivery of the 2008A Bonds to the purchasers thereof.
 
SECTION 2.2.   Representations by the Company .
 
The Company makes the following representations as the basis for the undertakings on its part herein contained:

(a)   Corporate Organization and Power .  The Company (i) is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth, and (ii) 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 being conducted and as presently proposed to be conducted.
 
(b)   Pending Litigation .  Except as set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2007, there are no actions, suits, proceedings, inquiries or investigations 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 which involve the possibility of materially and adversely affecting the transactions contemplated by the Financing Documents or which, in any way, would adversely affect the validity or enforceability of the 2008A Bonds or the Financing Documents or the legal ability of the Company to perform its obligations under this Loan Agreement.
 
(c)   Agreements Are Valid and Authorized .  The execution and delivery by the Company of this Loan Agreement and the compliance by the Company with all of the provisions hereof (i) are within the corporate power of the Company, (ii) will not conflict with or result in any breach of any of the provisions of, or constitute a default under, any material agreement, charter document, by-law or other material instrument to which the Company is a party or by which it may be bound, or any license, judgment, decree, law, statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its activities or properties, and (iii) have been duly authorized by all necessary action on the part of the Company.  This Agreement, upon the due execution and delivery thereof by the Company and the Issuer, will be a valid and binding obligation of the Company enforceable in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or other laws or equitable principles of general application relating to or affecting the enforcement of creditors' rights generally.
 
(d)   Governmental Consents .  No actions by the Company in connection with the execution, delivery and performance by the Company of this Loan Agreement are such as to require the consent, approval or authorization of, or the filing, registration or qualification with, any governmental authority on the part of the Company, other than those already obtained as of the Issue Date; provided, however, no representation is made herein as to compliance with the securities or "blue sky" laws of any jurisdiction.
 
(e)   No Defaults .  No event has occurred and no condition exists with respect to the Company  that would constitute an "Event of Default" under the Indenture or which, with the lapse of time or with the giving of notice or both, would become an "Event of Default" under the Indenture.
 
(f)   Tax Documents .  The representations and statements made by the Company in the Tax Documents are true and correct.
 
(g)   Tax Information .  The information furnished by the Company and used by the Issuer in preparing the tax certificate and information return pursuant to the Code is accurate and complete in all material respects as of the date of original issuance and delivery of the 2008A Bonds.  The proceeds of the 2008A Bonds will not exceed the Project Costs.  None of the  Costs of Issuance will be financed with proceeds of the 2008A Bonds, including any underwriter’s discount on the sale of the 2008A Bonds.
 
(h)   Disqualified Contractors .  The Company is not a Disqualified Contractor.
 
ARTICLE III
 
LOAN AND REPAYMENT; OPERATION OF PROJECT FACILITIES
 
SECTION 3.1.   Loan of Bond Proceeds .
 
To provide funds for the redemption and refinancing of the Series 2004 B Bonds, the Issuer will issue the 2008A Bonds upon the terms and conditions contained in this Loan Agreement and the Indenture and will loan the proceeds thereof to the Company by causing the Bond proceeds to be applied as provided in Article V hereof.

SECTION 3.2.   Repayment of Loan .
 
The Company will repay the loan of the Bond proceeds by making the payments required by Article VI hereof.

SECTION 3.3.   Operation .
 
The Company shall operate and maintain the Project Facilities in such manner as to comply in all material respects with the Act and all applicable requirements of federal, state and local laws and the regulations, rules and orders of any federal, state or local agency, board, commission or court having jurisdiction over the Project Facilities or the operation thereof, including without limitation applicable zoning, planning, building and environmental laws, regulations, rules and orders; provided that the Company shall be deemed in compliance with this Section so long as it is acting with due diligence to correct any violations of any of the foregoing or contesting in good faith any such requirement by appropriate legal proceedings.  The Company shall pay all costs and expenses of operation and maintenance of the Project Facilities, including all applicable taxes.  During such period as the Project Facilities is operated in accordance with the provisions of this Loan Agreement, the Company will, within the design capabilities thereof, cause the Project Facilities to be operated and maintained in accordance with all applicable, valid and enforceable rules and regulations; provided, that the Company reserves the right to contest in good faith any such rules or regulations or the application thereof to the Project.  It is understood and agreed that the Issuer shall have no duties or responsibilities whatsoever with respect to the operation or maintenance of the Project Facilities, or the performance of the Project Facilities for its designed purposes.

SECTION 3.4.   Insurance .
 
Subject to the provisions of Section 4.6 hereof, the Company agrees to maintain, or cause to be maintained, all necessary insurance with respect to the Project Facilities in accordance with its customary insurance practices and the practices of Persons operating similar facilities, which may include self-insurance.  All costs of maintaining insurance with respect to the Project Facilities shall be paid by the Company, and the Issuer and the Trustee shall have no obligation or liability in this regard.  All general liability insurance policies relating to the site of the Project Facilities or facilities shall name the Issuer and the Trustee as additional insureds as their interests may appear.

SECTION 3.5.   Maintenance and Repair .
 
Subject to the provisions of Section 4.6 hereof, the Company agrees that it will (i) maintain, or cause to be maintained, the Project Facilities and all of its other properties in as reasonably safe condition as its operations shall permit and (ii) maintain, or cause to be maintained, the Project Facilities and all of its other properties in good repair and in good operating condition, ordinary wear and tear excepted, making from time to time all necessary repairs thereto and renewals and replacements thereof material to the integrity of the water system or to the provision of adequate service to the Company's customers.  All costs of operating and maintaining the Project Facilities and all of its other properties shall be paid by the Company, and the Issuer shall have no obligation or liability in this regard.

SECTION 3.6.   Right to Discontinue Operation of Project Facilities .
 
Although the Company intends to operate, or cause to be operated, the Project Facilities for its designed purposes until the date on which no 2008A Bonds are Outstanding, subject to the provisions of Section 6.10 hereof, the Company is not required by this Loan Agreement to operate, or cause to be operated, any portion of the Project Facilities after the Company shall deem in its sole discretion that such continued operation is not advisable and in such event it is not prohibited by this Loan Agreement from selling, leasing or retiring all or any such portion of the Project Facilities.  Subject to the provisions of Section 6.10 hereof, the net proceeds from such sale, lease or other disposition, if any, shall belong to, and may be used for any lawful purpose by, the Company.  Upon discontinuance of operation of the Project Facilities in accordance with this Section 4.6, the Company shall be discharged from its obligations to insure, maintain and repair the Project Facilities or to cause the Project Facilities to be insured, maintained and repaired as set forth in Sections 4.4 and 4.5 hereof.

SECTION 3.7.   Insurance and Condemnation Awards .
 
Subject to the provisions of Sections 4.4 and 6.10 hereof, the net proceeds of any insurance or condemnation award as a result of the destruction or condemnation of the Project Facilities or any portion thereof shall belong to, and may be used for any lawful purpose by, the Company.

SECTION 3.8.   Workers' Compensation Coverage .
 
Throughout the term of this Loan Agreement, the Company shall comply, or cause compliance, with applicable workers' compensation laws of the Commonwealth.

SECTION 3.9.   Taxes, Claims for Labor and Materials, Compliance with Laws .
 
(a)   The Company will promptly pay and discharge all lawful taxes, assessments and governmental charges or levies imposed upon the Company or upon or in respect of all or any part of the Property or business of the Company, 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 or charge upon any Property of the Company including the Installment Loan Payments; provided the Company shall not be required to pay any such tax, assessment, charge, levy, account payable or claim if (1) 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 any material interference with the use thereof by the Company, and (2) the Company shall set aside on its books, reserves deemed by it to be adequate with respect thereto.
 
(b)   The Company will promptly 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, the Employees Retirement Income Security Act of 1974, as amended, and all Environmental Legal Requirements, the violation of which would materially and adversely affect the Properties, business, prospects, profits or condition (financial or otherwise) of the Company or would result in any lien or charge upon any Property of the Company, subject, however, to the Company's right to contest in good faith the application of any such laws, rules or regulations to the Company or its operations so long as such contest does not result in a material threat to the operation of the Company's water system or its ability to make the payments due hereunder.
 
SECTION 3.10.   Issuer's Limited Liability .
 
It is recognized that the Issuer's only source of funds with which to carry out its commitments under the 2008A Bonds or this Loan Agreement will be from the proceeds from the sale of the 2008A Bonds, drawings under the Letter of Credit, the Installment Loan Payments, or from any available income or earnings derived therefrom, or from any funds which otherwise might be made available by the Company; and it is expressly agreed that the Issuer shall have no liability, obligation, or responsibility with respect to this Loan Agreement, the Project Facilities or the Project except to the extent of funds available from such sources.

SECTION 3.11.   Right of Inspection .
 
Subject to reasonable security and safety regulations and upon reasonable notice, the Issuer and the Trustee, and their respective agents and representatives, shall have the right during normal business hours to inspect the Project Facilities and the books and records of the Company pertaining to the Project and the Project Facilities; provided, however, that this right is subject to federal, state and local laws and regulations applicable to the site of the Project Facilities.  The right of access hereby reserved to the Issuer and the Trustee may be exercised only after such agent or representative shall have executed release of liability and secrecy agreements (to the extent permitted by law, in the case of an Issuer representative) if requested by the Company in the form then currently used by the Company, and nothing contained in this Section or in any other provision of this Loan Agreement shall be construed to entitle the Issuer or the Trustee to any information or inspection involving the confidential expertise of the Company.

ARTICLE IV
 
ISSUANCE OF 2008A BONDS; SECURITY; INVESTMENTS
 
SECTION 4.1.   Issuance of 2008A Bonds .
 
In order to provide funds to redeem and refinance the Series 2004B Bonds, the Issuer, concurrently with the execution of this Loan Agreement, will sell, issue and deliver to the initial purchasers thereof the 2008A Bonds, all in accordance with the Indenture.

SECTION 4.2.   Security for the 2008A Bonds .
 
(a)   The obligations of the Company under this Loan Agreement, including specifically the obligation to pay Installment Loan Payments and Administrative Expenses and its obligations under Article VI hereof shall be direct general obligations of the Company.  Prior to or simultaneously with the issuance of the 2008A Bonds, the Issuer will assign to the Trustee under the terms of the Indenture all of the Issuer's right, title, and interest in and to this Loan Agreement including specifically the Installment Loan Payments but excepting all Unassigned Issuer's Rights.
 
The Company hereby pledges to the Issuer and grants to the Issuer a lien upon and a security interest in all moneys and funds held under the Indenture to secure the Company's obligations under this Agreement.

(b)   The Company shall join with the Issuer and the Trustee to prepare and file such financing statements, continuation statements and other documents under the Pennsylvania Uniform Commercial Code or other applicable law as the Issuer or the Trustee may reasonably require for the perfection and maintenance of any security interests granted hereby and shall file or arrange for the Trustee to file, and pay the costs of filing the same in such public offices as the Issuer or the Trustee shall designate.  This Agreement shall constitute a security agreement within the meaning of the Delaware Uniform Commercial Code.
 
(c)   The Trustee, as assignee of the foregoing security interest, shall hold the security interest in all moneys and funds held under the Indenture together with any other security granted hereunder, or under any other document securing the 2008A Bonds, first , for the equal and ratable benefit of the holders of all 2008A Bonds, and second , for the benefit of the Bank, and shall exercise the remedies provided herein and by law for the equal and ratable benefit of the Holders of all Bonds and the Bank, as the case may be.  Notwithstanding the foregoing, all moneys and funds held in the Rebate Fund under the Indenture shall be held solely for the benefit of the United States Treasury in order to pay the Rebate Requirement, if any.
 
SECTION 4.3.   Reserved .
 
SECTION 4.4.   Investment of Funds .
 
The Issuer hereby gives its express written authority to the Company as provided in the Indenture to direct the investment of the Debt Service Fund or any other Fund held by the Trustee pursuant to the Indenture.

ARTICLE V
 
COMPANY OBLIGATIONS; PROVISIONS FOR PAYMENT; COVENANTS
 
SECTION 5.1.   Company Approval of Issuance of 2008A Bonds .
 
The governing body of the Issuer has adopted the Bond Resolution authorizing the execution of this Loan Agreement and the Indenture and the issuance of the 2008A Bonds.  The Company hereby approves the Bond Resolution and the Indenture.  It is hereby agreed that the foregoing approval of the Bond Resolution and the Indenture constitutes the acknowledgment and agreement of the Company that the 2008A Bonds, when issued, sold and delivered as provided in the Bond Resolution and the Indenture, will be issued in accordance with and in compliance with this Loan Agreement, notwithstanding any other provisions of this Loan Agreement or any other contract or agreement to the contrary.  Any Registered Owner is entitled to rely fully and unconditionally on the foregoing approval.  Notwithstanding any provisions of this Loan Agreement or any other contract or agreement to the contrary, the Company's approval of the Bond Resolution and the Indenture shall be the Company's agreement that all covenants and provisions in this Loan Agreement and the Indenture affecting the Company shall, upon the delivery of the 2008A Bonds and the Indenture, become valid and binding covenants and obligations of the Company so long as the 2008A Bonds, premium, if any, and the interest thereon are outstanding and unpaid.  Particularly, the obligation of the Company to pay, promptly when due, all Installment Loan Payments specified in this Loan Agreement and the Indenture shall be absolute and unconditional, and said obligation may be enforced as provided in this Loan Agreement and the Indenture.

SECTION 5.2.   Refunding of 2008A Bonds .
 
After the issuance of any 2008A Bonds, the Issuer shall not refund any of the 2008A Bonds or change or modify the 2008A Bonds in any way, except as provided for in the Indenture, without the prior written approval of an Authorized Company Representative; nor shall the Issuer redeem any 2008A Bonds prior to the maturity date except upon the written request of an Authorized Company Representative, unless such redemption is required or permitted by the Indenture without such request.

SECTION 5.3.   Redemption of 2008A Bonds .
 
The Issuer, upon the written request of the Company (and provided that the affected 2008A Bonds are subject to redemption prior to maturity at the option of the Issuer or the Company, and provided that such request is received in sufficient time prior to the date upon which such redemption is proposed), shall promptly take or cause to be taken all action that may be necessary under the applicable redemption provisions to effect such redemption prior to maturity, to the full extent of funds either made available for such purpose by the Company or already on deposit in the Debt Service Fund and available for such purpose.  The redemption of any Outstanding 2008A Bonds prior to maturity at any time shall not relieve the Company of its absolute and unconditional obligation to pay each remaining Installment Loan Payment with respect to any Outstanding 2008A Bonds, as specified in the Indenture.  If a redemption of 2008A Bonds is required pursuant to the provisions of the Indenture, the Company agrees as provided herein to promptly make Installment Loan Payments sufficient to pay the principal of, premium, if any, and interest on the 2008A Bonds due on such redemption date.

SECTION 5.4.   Installment Loan Payments .
 
(a)   The Company hereby covenants and agrees to make the Installment Loan Payments, as hereinafter provided in subsections (b), (c), (d) and (f) of this Section, to the Trustee, on behalf of the Issuer, in accordance with this Loan Agreement..
 
(b)   The Company shall make Installment Loan Payments, subject to the limitations of subsection (e) below of this Loan Agreement, in immediately available funds directly to the Trustee for deposit in the Debt Service Fund no later than each day on which any payment of Debt Service shall become due (whether at maturity or upon redemption or acceleration or otherwise) in an amount which, together with other money held by the Trustee under the Indenture and available therefor, will enable the Trustee to make such payment in full when due.
 
(c)   In the event the Company should fail to make any of the payments required in this Section, the item or installment so in default shall continue as an obligation of the Company until the amount in default shall have been fully paid, and the Company agrees to pay the same with interest thereon, to the extent permitted by law, from the date when such payment was due as provided in the Indenture.
 
(d)   If, subsequent to a date on which the Company is obligated to pay the Installment Loan Payments (subject to the provisions of Article X of the Indenture), losses (net of gains) shall be incurred in respect of any investments, or any other event has occurred causing the money in the Debt Service Fund, together with any other money then held by the Trustee and available for the purpose, to be less than the amount sufficient at the time of such occurrence or other event to pay, in accordance with the provisions of the Indenture, all Debt Service due and payable or to become due and payable, the Trustee shall notify the Company of such fact and thereafter the Company, as and when required for purposes of such Debt Service Fund, shall pay in immediately available funds to the Trustee for deposit in the Debt Service Fund the amount of any such deficiency.
 
(e)   Notwithstanding the foregoing, it is the intention of the parties hereto to conform strictly to the usury laws now in force in the Commonwealth, and any provision for any payment contained herein and in the 2008A Bonds shall be held to be subject to reduction to the amount allowed under said usury laws as now or hereafter construed by the courts having jurisdiction.
 
(f)   The Company further agrees that in the event payment of the principal of and the interest on the 2008A Bonds is accelerated upon the occurrence of an Event of Default under the Indenture, all amounts payable under Section 5.4(b) for the remainder of the term hereof (other than interest not yet due) shall be immediately due and payable.
 
(g)   Any amount held in the Debt Service Fund on any payment date specified in subsection (b) above and not previously credited against Installment Loan Payments or designated for payments due on particular 2008A Bonds, shall be credited against the Installment Loan Payments required to be made by the Company on such date.
 
(h)           The Company shall receive a credit against its payment obligations under Section 5.4(b) to the extent of payments made to the Trustee by the Bank pursuant to drawings under the Letter of Credit, but only to the extent that the Company has reimbursed the Bank for such drawings pursuant to the Reimbursement Agreement.

SECTION 5.5.   Administrative Expenses .
 
The Company shall pay, or cause to be paid, an amount equal to the reasonable fees and charges of the Trustee, the Paying Agent and the Remarketing Agent for services rendered by each as Trustee, Paying Agent and Remarketing Agent, respectively, under the Indenture and the reasonable expenses incurred as Trustee and Paying Agent under the Indenture, and the Remarketing Agent under the Remarketing Agreement, including reasonable fees and expenses of their counsel.  The Trustee's right to receive its reasonable fees, charges and expenses hereunder shall be secured by a lien on moneys held by it in the Debt Service Fund and, upon an Event of Default hereunder, the Trustee shall have a right of payment prior to the payment of the owners of the 2008A Bonds as provided in Section 8.11 of the Indenture.

SECTION 5.6.   Payments to Issuer and Local IDA .
 
The Company shall pay or cause to be paid all of the Issuer's and Local IDA's reasonable, actual out-of-pocket expenses and costs in connection with the issuance of the 2008A Bonds, including, without limitation, all financing, legal, printing, and other expenses and all Costs of Issuance incurred in issuing the 2008A Bonds (including the fees and expenses of bond counsel and the Issuer's financial advisor) and the Issuer's fee of .20% of the principal amount of the 2008A Bonds for issuing the 2008A Bonds.  Also, in the future the Company shall pay to the Issuer upon receipt of statements therefor from time to time, such amounts as are necessary to pay or reimburse the Issuer and the Local IDA for their reasonable and necessary expenses and costs attributable to the 2008A Bonds and the Project.

SECTION 5.7.   Obligations of the Company Absolute and Unconditional.
 
The obligations of the Company to make the payments required and to perform the covenants contained in Sections 5.4, 5.5, 5.6, 5.10, 6.1 and 7.3 and to perform and observe the other agreements on its part contained herein shall be absolute and unconditional and shall not be subject to diminution by set-off, counterclaim, abatement or otherwise.  Until (i) payment of all Debt Service relating to the 2008A Bonds shall have been made, (ii) the Company shall have satisfied all of its obligations to the Bank pursuant to the Indenture, this Agreement, the Letter of Credit and the Reimbursement Agreement, and (iii) all fees, indemnities, expenses and charges of the Issuer, Local IDA, the Trustee, the Paying Agent and the Remarketing Agent have been fully paid or provision satisfactory to such parties has been made for such payment, the Company (a) will not suspend or discontinue any payments provided for in this Loan Agreement, except to the extent the same have been prepaid, (b) will perform and observe all its other agreements contained herein, and (c) except as provided in Section 8.1, will not terminate this Loan Agreement for any cause, including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, sale, loss, eviction or constructive eviction, destruction of or damage to the Project Facilities, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the Commonwealth or any political subdivision of either, or any failure of the Issuer to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or in connection herewith or with the Indenture.  Nothing contained in this Section shall be construed to release the Issuer from the performance of any of the agreements on its part herein contained and in the event the Issuer shall fail to perform any such agreement on its part, the Company may take such action as the Company may deem necessary to perform or compel performance, provided that no such action shall violate the agreements on the part of the Company contained in this Loan Agreement or postpone or diminish the amounts required to be paid by the Company pursuant to this Loan Agreement.  Upon the issuance and delivery of the 2008A Bonds to the initial purchasers thereof, the Company shall have received, and the Issuer shall have given, full and complete consideration for the Company's obligation hereunder to make Installment Loan Payments.

SECTION 5.8.   Option to Prepay Amounts Under Loan Agreement in Certain Events .
 
The Company shall have, and is hereby granted, the option to prepay the amounts required to be paid by the Company under Section 5.4(b) in whole or in part and to direct the Trustee to redeem the 2008A Bonds in whole or in part, as the case may be, if the Company determines to exercise any optional redemption rights under the terms of the 2008A Bonds or if any of the events described in Article V of the Indenture requiring the redemption of 2008A Bonds shall have occurred.  The Company may at any time deliver money, and/or Government Obligations, to the Trustee with instructions to the Trustee to hold such money, and/or Government Obligations, pursuant to Article X of the Indenture in connection with a discharge of the Indenture.  The Issuer agrees that, at the request at any time of the Company, it will cooperate with the Company to cause the 2008A Bonds or any portion thereof to be redeemed, or to cause the Indenture to be discharged, to the extent permitted by the Indenture.

SECTION 5.9.   Company's Performance Under Indenture .
 
The Company agrees, for the benefit of the Owners, to do and perform all acts and things contemplated in the Indenture to be done or performed by it and to not interfere with the exercise of the power and authority granted to the Trustee in the Indenture.  The Company further agrees to aid in furnishing any documents, certificates or opinions that may be required under the Indenture.

SECTION 5.10.   Covenants Regarding Tax Exemption .
 
It is the intention of the Company and the Issuer that the interest on the 2008A Bonds be excludable from the gross income of the holders thereof for federal income tax purposes by reason of Section 103(a) of the Code, except for any Bond for any period that such Bond is owned by a person who is a "substantial user" of the Project Facilities or a "related person" within the meaning of Section 147(a) of the Code, and that substantially all of the proceeds of the 2008A Bonds will be used to refinance the 2004B Bonds the proceeds of which were used to provide facilities for the furnishing of water within the meaning of Section 142(a)(4) of the Code and any Regulations promulgated with respect thereto.  To that end, the Company and the Issuer (to the extent reasonably within the control of the Issuer) covenant with each other to refrain from any action which would adversely affect, or to take such action to assure, the treatment of the 2008A Bonds as obligations described in Section 103(a) of the Code, the interest on which is not includable in the gross income of the holders thereof (other than the income of a "substantial user" of the Project or a "related person" within the meaning of Section 147(a) of the Code) for purposes of federal income taxation. None of the covenants and agreements herein contained shall require either the Company or the Issuer to enter an appearance or intervene in any administrative, legislative or judicial proceeding in connection with any changes in applicable laws, rules or regulations or in connection with any decisions of any court or administrative agency or other governmental body affecting the taxation of interest on the 2008A Bonds.

SECTION 5.11.   Company's Option to Remarket 2008A Bonds Purchased in Lieu of Redemption .
 
Pursuant to Section 5.4 of the Indenture, the Company is given the right to purchase 2008A Bonds in lieu of redemption.  In the event the Company exercises such option with respect to 2008A Bonds which have been called for redemption under Section 5.7 of the Indenture, the Company (or any Person acting on its behalf) (i) will not remarket such 2008A Bonds as tax exempt 2008A Bonds without first obtaining an opinion of Bond Counsel that the interest on the 2008A Bonds to be remarketed is not includable in the gross income of the owners thereof for federal income tax purposes except for interest on any Bond for any period during which such Bond is owned by a person who is a "substantial user" of the Project or any person considered to be related to such person within the meaning of Section 147(a) of the Code, and (ii) will not remarket such 2008A Bonds until the Company delivers to the Issuer and the Trustee an opinion of counsel, not unsatisfactory to the Issuer and Trustee in their reasonable judgment, that none of the 2008A Bonds or this Loan Agreement are subject to registration under the Securities Act of 1933, as amended.

SECTION 5.12.   Nondiscrimination – Sexual Harassment .
 
The Company hereby accepts and agrees to be bound by the Nondiscrimination – Sexual Harassment clause set forth in Exhibit A attached hereto.

SECTION 5.13.   Rate Mode Conversion .
 
Subject to and upon compliance with the applicable provisions of the Indenture, the Rate Mode on the 2008A Bonds may be converted to a new Rate Mode at the direction of the Company.  Any and all fees and expenses in connection with any such conversion shall be paid by the Company.  Upon any such conversion, the Company will comply with any applicable provisions of SEC Rule 15c2-12.

SECTION 5.14.   Letter of Credit Facility .
 
On the date of issuance of the 2008A Bonds, the Letter of Credit Facility will be in effect.  The Company at its option may from time to time with notice to the Issuer cause a Letter of Credit Facility to be extended or an Alternate Credit Facility to be delivered in replacement therefor, or to terminate a Letter of Credit Facility, in each case to the extent permitted by the terms of the Indenture.  It is anticipated that so long as a Letter of Credit Facility is held by the Paying Agent, all payments of principal of and interest on the 2008A Bonds payable in connection with an optional or mandatory tender and purchase of 2008A Bonds will be funded, to the extent remarketing proceeds are not available to fund such payments, from draws on such Letter of Credit Facility and that moneys paid by the Company pursuant to Section 5.4(b) hereof representing Installment Loan Payments hereunder will be applied to reimburse the Bank for such draws.

ARTICLE VI
 
PARTICULAR AGREEMENTS
 
SECTION 6.1.   Indemnified Party's Release and Indemnification Provisions .
 
The Company agrees, whether or not the transactions contemplated by this Loan Agreement and the Indenture shall be consummated:

(a)   to pay, and save the Indemnified Parties harmless against liability for the payment of, all reasonable out-of-pocket expenses arising in connection with said contemplated transactions, including the reasonable fees and expenses of counsel to the Indemnified Parties; and
 
(b)   to defend, protect, indemnify and save the Indemnified Parties harmless from and against all liability, losses, damages, costs, reasonable expenses (including reasonable counsel fees), taxes, causes of action, suits, claims, demands and judgments of any nature or form, by or on behalf of any Person arising in any manner from the transactions of which this Loan Agreement or the Indenture is a part or arising in any manner in connection with the Project, the Project Facilities or the financing or refinancing of the Project or the Project Facilities, and, without limiting the generality of the foregoing, arising from (i) the issuance, offering, sale, or delivery of the 2008A Bonds, the Indenture, the Underwriting Agreement and this Loan Agreement and the obligations imposed on the Issuer hereby and thereby and the Trustee's performance of its obligations under the Indenture; or the design, construction, installation, operation, use, occupancy, maintenance, or ownership of the Project and the Project Facilities; (ii) any written statements or representations made or given by the Company or any of its officers or employees to the Indemnified Parties or any underwriters or purchasers of any of the 2008A Bonds, with respect to the Issuer, the Company, the Project, the 2008A Bonds or the Underwriting Agreement, including, but not limited to, statements or representations of facts, financial information, or corporate affairs; (iii) damage to property or any injury to or death of any person that may be occasioned by any cause whatsoever pertaining to the Project or the Project Facilities; (iv) any breach or default on the part of the Company in the performance of any of its obligations under this Loan Agreement; (v) any violation of contract, agreement or restriction by the Company relating to the Project or Project Facilities; or (vi) any violation of law, ordinance or regulation by or permitted by the Company affecting the Project or Project Facilities or any part thereof or the ownership or occupancy or use thereof.
 
In the event that any action or proceeding is brought against any Indemnified Party by reason of any such claim, such action or proceeding shall be defended against by counsel to the Company, unless the Indemnified Party shall determine, upon advice of counsel to the Indemnified Party, that the Indemnified Party's interests conflict with the interests of Company, in which event the Indemnified Party may select its own counsel.  In the event such defense is by counsel to the Indemnified Party on behalf of the Indemnified Party, the Company shall indemnify the Indemnified Party for reasonable costs of counsel to the Indemnified Party allocated to such defense and charged to the Indemnified Party.  The Company, upon notice from the Indemnified Party, shall resist and defend such an action or proceeding on behalf of the Indemnified Party.  The Indemnified Party shall provide the Company prompt written notice of any claim or suit with respect to which it has a right of indemnity hereunder, but the failure to provide such notice shall not limit or impair the rights of any Indemnified Party hereunder except to the extent that such failure causes actual damage or loss to the Company.  The Indemnified Party shall, at the Company's expense, provide all reasonable assistance requested by the Company in its defense and/or settlement of any such claim or suit.  Neither party shall settle or pay any such claim or suit without the prior written consent of the other party, which shall not be unreasonably withheld.

The provisions of this Section shall not apply to any claim or liability to the extent resulting from the Indemnified Party's acts of gross negligence, bad faith, fraud or deceit or for any claim or liability which the Company was not given the opportunity to contest (except as set forth in the preceding paragraph), due to the gross negligence of the Indemnified Party.

The Company also agrees to pay the expenses (including reasonable attorneys' fees) of any Indemnified Party in enforcing this Section 6.1.  The provisions of this Section shall survive the payment of the 2008A Bonds, the termination of this Loan Agreement, the termination of the Indenture, and, as to the Trustee, the removal or resignation of the Trustee.

SECTION 6.2.   Maintenance of Corporate Existence .
 
The Company agrees that during the term of this Loan Agreement it will maintain its corporate existence, will not dissolve or otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into another corporation; provided, however, that the Company may, without violating the agreement contained in this Section, consolidate with or merge into another corporation, or sell or otherwise transfer to another corporation all or substantially all of its assets as an entirety and thereafter dissolve, if (a) the Issuer consents in writing, (b) the surviving, resulting or transferee corporation, as the case may be, assumes in a writing delivered to the Trustee all of the obligations of the Company herein and under the Tax Documents, is duly qualified to do business in the Commonwealth and is not a Disqualified Contractor, (c) 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, (d) after giving effect to such consolidation or merger the surviving corporation would be permitted to incur at least $1.00 of additional Funded Debt under the provisions of Section 6.9 hereof, and (e) the provisions of Section 6.6 are satisfied.

SECTION 6.3.   Financial Information .
 
The Company will 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, in accordance with generally accepted accounting principles consistently maintained (except for changes disclosed in the financial statements furnished pursuant to this Section 6.3 and concurred in by the independent public accountants referred to herein), and will furnish to the Trustee and upon request, to the Issuer:

(a)   Quarterly Statements .  As soon as available and in any event within 45 days after the end of each quarterly fiscal period (except the last) of each fiscal year, duplicate copies of:
 
(1)   a consolidated balance sheet of the Company as of the close of such quarter setting forth in comparative form the consolidated figures for the corresponding period of the preceding fiscal year,
 
(2)   consolidated statements of income and shareholders' investment of the Company for such quarterly period, setting forth in comparative form the consolidated figures for the corresponding period of the preceding fiscal year, and
 
(3)   consolidated statements of cash flows of the Company for the portion of the fiscal year ending with such quarter, setting forth in comparative form the consolidated figures for the corresponding period of the preceding fiscal year,
 
all in reasonable detail and certified as complete and correct, by an authorized financial officer of the Company;

(b)   Annual Statements .  As soon as available and in any event within 120 days after the close of each fiscal year of the Company, duplicate copies of:
 
(1)   a consolidated balance sheet of the Company as of the close of such fiscal year,
 
(2)   consolidated statements of income and shareholders' investment and cash flows of the Company for such fiscal year,
 
in each case setting forth in comparative form the consolidated 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 to the effect that the consolidated financial statements have been prepared in accordance with generally accepted accounting principles consistently applied (except for changes in application in which such accountants concur) and present fairly, in all material respects, the financial condition of the Company and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards and accordingly, includes such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances;

(c)   Audit Reports .  Promptly upon receipt thereof, one copy of each interim or special audit made by independent accountants of the books of the Company;
 
(d)   SEC and Other Reports .  Promptly upon their becoming available, one copy of each financial statement, report, notice or proxy statement sent by the Company to stockholders generally and of each regular or periodic report, and any registration statement or prospectus filed by the Company with any securities exchange or the Securities and Exchange Commission or any successor agency, and copies of any orders in any proceedings substantially affecting the financial condition of the Company to which the Company is a party, issued by any governmental agency, Federal or state, having jurisdiction over the Company;
 
(e)   Officers' Certificates .  Within the periods provided in paragraphs (a) and (b) above, a certificate of an authorized financial officer of the Company stating that he has reviewed the provisions of this Agreement and setting forth: (1) the information and computations (in sufficient detail) required in order to establish whether the Company was in compliance with the requirements of Sections 6.9 through 6.12, inclusive, at the end of the period covered by the financial statements then being furnished, and (2) whether there existed as of the date of such financial statements and whether, to the best of his 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.
 
To the extent not furnished pursuant to the foregoing provisions of this Section 6.3, the Company agrees to furnish to the Issuer and Trustee, copies of the annual financial statements and other information filed with Nationally Recognized Municipal Securities Information Repositories pursuant to the Company's continuing disclosure undertaking referred to in the Underwriting Agreement.  Such statements and other information shall be filed with the Issuer and the Trustee within ten (10) days of the filings made pursuant to such continuing disclosure undertaking.

SECTION 6.4.   Agreement of Issuer Not to Assign or Pledge .
 
Except for the assignment and pledge described in the Indenture, the Issuer agrees that it will not attempt to further assign, pledge, transfer or convey its interest in or create any assignment, pledge, lien, charge or encumbrance of any form or nature with respect to the rights and interests herein described.

SECTION 6.5.   Reference to 2008A Bonds Ineffective after 2008A Bonds Paid .
 
Upon payment of all Debt Service due relating to the 2008A Bonds, and payment of all fees and charges of the Issuer and the Trustee, all as provided in Article X of the Indenture, all references herein to the 2008A Bonds and the Trustee shall be ineffective and neither the Issuer, the Trustee nor the holders of any of the 2008A Bonds shall thereafter have any rights hereunder and the Company shall have no further obligation hereunder, saving and excepting those that shall have theretofore vested and remain unsatisfied and any right of the Issuer or the Trustee to indemnification under Section 6.1 and payment of fees under Section 7.3, which rights shall survive the payment of all Debt Service due relating to the 2008A Bonds and the termination of this Loan Agreement and the Indenture.

SECTION 6.6.   Assignment, Sale or Lease of Project Facilities .
 
(a)   The Company shall not assign this Loan Agreement or any interest of the Company herein, either in whole or in part, without the prior written consent of the Trustee, which consent shall be given if the following conditions are fulfilled:
 
(i)   The assignee assumes in writing all of the obligations of the Company hereunder;
 
(ii)   The assignee provides the Trustee with an opinion of counsel satisfactory to the Trustee to the effect that neither the validity nor the enforceability of this Loan Agreement shall be adversely affected by such assignment;
 
(iii)   The Project and the Project Facilities shall continue in the opinion of Bond Counsel to be a "project" as such term is defined in the Act after such assignment;
 
(iv)   Such assignment shall not, in the opinion of Bond Counsel, have an adverse effect on the exclusion from gross income for federal income tax purposes of interest on the 2008A Bonds;
 
(v)   The assignee shall not be a Disqualified Contractor; and
 
(vi)   Consent by the Issuer, which consent shall not be unreasonably withheld.
 
(b)   The Company may, subject to the provisions of Section 5.10, lease the Project Facilities, in whole or in part, to one or more other Persons, provided that:
 
(i)   No such lease shall relieve the Company from its obligations under this Loan Agreement;
 
(ii)   In connection with any such lease the Company shall retain such rights of interests as will permit it to comply with its obligations under this Loan Agreement;
 
(iii)   No such lease shall impair materially the accomplishment of the purposes of the Act to be accomplished by operation of the Project Facilities as herein provided;
 
(iv)   Any such lease shall require the lessee to operate the Project Facilities as a "project" under the Act as long as the 2008A Bonds are outstanding;
 
(v)   In the case of a lease to a new lessee or an assignment of an existing lease to a new lessee of substantially all of the Project Facilities, such new lessee: (A) shall not be a Disqualified Contractor; and (B) shall have been approved by the Issuer (such approval not to be unreasonably withheld); and
 
(vi)   The lessees under any such leases, shall be subject to the applicable terms and conditions of Section 5.10.
 
(c)   The Company shall not sell, assign or otherwise dispose of (whether in one transaction or in a series of transactions) its interest in the Project, the Project Facilities or any material portion thereof, other than is permitted by Section 6.6(a) and other than leases permitted under Section 6.6(b) or undertake or permit the demolition or removal of the Project Facilities or any material portion thereof without the prior written consent of the Issuer; provided that the Company shall be permitted to sell, transfer, assign or otherwise dispose of or remove any portion of the Project Facilities which is retired or replaced in the ordinary course of business.
 
SECTION 6.7.   Amendment of Loan Agreement or Indenture .
 
No amendment, change, addition to, or waiver of any of the provisions of this Loan Agreement or the Indenture shall be made except pursuant to Article IX of the Indenture.

SECTION 6.8.   Waiver of Vendor’s Lien .
 
Notwithstanding anything in this Loan Agreement to the contrary, it is the intention of the parties hereto that no vendor’s lien and/or privilege, mortgage, resolutory condition, right of rescission or stipulation for the benefit of a third party shall be created by execution of this Loan Agreement, and if any such lien, privilege, condition, or benefit should be deemed to have been created by execution of this Loan Agreement, they are expressly released, renounced, waived and abandoned by the parties hereto.

SECTION 6.9.   Limitations on Indebtedness .
 
(a)   The Company will not have outstanding, or in any manner be liable in respect of, any Indebtedness, except the following:
 
(1)   current operating liabilities and current or other obligations (other than for borrowed money) incurred in the ordinary course of business;
 
(2)   Seasonal Indebtedness, provided that such Seasonal Indebtedness has not existed for a period of at least 30 consecutive days in the twelve preceding months; and
 
(3)   Funded Debt (including, without limitation, the 2008A Bonds and the Issuer’s $7,300,000 Exempt Facilities Revenue Bonds, Series A of 2004 (The York Water Company Project)) in an amount not in excess of 60% of the Plant Account on the books of the Company at any one time outstanding.
 
(b)   The renewal, extension or refunding of any Funded Debt issued or incurred in accordance with the limitations of this Section 6.9 shall constitute the issuance of additional Funded Debt, which is, in turn, subject to the limitations of the applicable provisions of this Section 6.9, but any Indebtedness paid or defeased from the proceeds of additional Funded Debt may be excluded from outstanding Indebtedness for purposes of this Section 6.9.
 
(c)   Subject to compliance with this Section 6.9, nothing contained in this Agreement shall prohibit the Company from having the Issuer issue in the future additional series of bonds or incurring other types of Funded Debt.
 
SECTION 6.10.   Limitation on Liens .
 
(a)   The Company will not create or incur, or suffer to be incurred or to exist, any mortgage, pledge, security interest, encumbrance, lien or charge of any kind on its 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 any Property or assets upon conditional sales agreements or other title retention devices, except Excepted Encumbrances; provided, however, that this requirement shall not be applicable to, nor prevent:
 
(1)   the pledging by the Company of its assets as security for the payment of any tax, assessment or other similar charge demanded of the Company by any governmental authority or public body as long as the Company in good faith contests its liability to pay the same, or as security to be deposited with any governmental authority or public body for any purpose at any time required by law or, governmental regulation as a condition to the transaction of any business or the exercise of any privilege, license or right; or
 
(2)   the pledging by the Company of any assets for the purpose of securing a stay or discharge or for any other purpose in the course of any legal proceeding in which the Company is a party; or
 
(3)   making good faith deposits in connection with tenders, contracts or leases to which the Company is a party; or
 
(4)   the pledging by the Company of its revenues to the Pennsylvania Infrastructure Investment Authority pursuant to that certain Loan Agreement dated as of August 24, 1999 in order to secure a loan in the original aggregate principal amount of $800,000 made by such Authority to the Company, such loan having an outstanding principal balance of approximately $616,680 as of November 1, 2004.
 
(b)   In the event any Property or assets of the Company are subject to a lien or charge not otherwise permitted by Section 7.10(a) above, the Company will make effective provision whereby the 2008A Bonds shall (so long as any other Indebtedness shall be so secured) be secured (along with any other Indebtedness similarly entitled to be equally and ratably secured) by a direct lien (on all the Property, other than Excepted Property, owned by the Company just prior to the time such other lien shall have become a lien on any of the Property of the Company) prior to the lien or liens securing any and all such other Indebtedness.  Compliance with the provisions of this paragraph shall not be deemed to constitute a waiver of, or consent to, any violation of Section 6.10(a).
 
(c)   The Company covenants that, so long as any 2008A Bonds shall be outstanding under the Indenture, if, upon any consolidation or merger of the Company with or into any other corporation, or upon any sale or conveyance of all or substantially all of the Property of the Company as an entirety, or upon any acquisition by the Company of the Property of another corporation substantially as an entirety or upon any merger of any other corporation into the Company, any of the Property (other than Excepted Property) owned by the Company just prior thereto, would thereupon become subject to any lien (other than Excepted Encumbrances), the Company, prior to such consolidation, merger, sale, conveyance or acquisition, will take appropriate action whereby the 2008A Bonds shall (so long as such Property shall be subject to such lien) be secured (along with any other Indebtedness similarly entitled to be equally and ratably secured) by a direct lien on such portion of the Property of the Company prior to all other liens, other than Excepted Encumbrances and other than any liens existing thereon just prior to such consolidation, merger, sale, conveyance or acquisition.
 
(d)   Any mortgage created pursuant to the requirements of paragraphs (b) or (c) above shall contain reasonable and customary provisions for the enforcement of the lien thereby created and for the release of, or substitution for, the Property so mortgaged.  Such direct lien shall be evidenced by an appropriate instrument or instruments executed and delivered to the Trustee.
 
SECTION 6.11.   Dividends, Stock Purchases .
 
The Company will not, except as hereinafter provided:

(a)   Declare or pay any dividends, 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, including the portion of dividends reinvested in shares of the Company’s common capital stock under the Company’s Optional Dividend Reinvestment Plan); or
 
(b)   Directly or indirectly, purchase, redeem or retire any shares of its capital stock of any class or any warrants, rights or options to purchase or acquire any shares of its capital stock (other than in exchange for or out of the net proceeds to the Company from the substantially concurrent issue or sale of other shares of capital stock of the Company or warrants, rights or options to purchase or acquire any shares of its capital stock); or
 
(c)   Make any other payment or distribution, either directly or indirectly, in respect of its capital stock; or
 
(d)   Make any payment, distribution, conveyance or transfer of any Property to any subsidiary or affiliate;
 
(such declarations or payments of dividends, purchases, redemptions or retirements of capital stock and warrants, rights or options, and all such other distributions, conveyances and transfers being herein collectively called "Restricted Payments"), if after giving effect thereto the aggregate amount of Restricted Payments made during the period from and after December 31, 1982 to and including the date of the making of the Restricted Payment in question, would exceed the sum of (1) $1,500,000 plus (2) earned surplus of the Company, on a non-consolidated basis, accumulated after December 31, 1982, determined without any deduction on account of such Restricted Payments, provided, however, that notwithstanding the foregoing, in no event shall the Company make any distribution, conveyance or transfer to any subsidiary or affiliate of any Property constituting the Plant Account.

The Company will not declare any dividend which constitutes a Restricted Payment payable more than 60 days after the date of declaration thereof.

For the purposes of this Section 6.11, the amount of any Restricted Payment declared, paid or distributed in Property of the Company 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.

SECTION 6.12.   Termination of Pension Plans.
 
The Company will not permit any employee benefit plan maintained by it to be terminated in a manner which could result in the imposition of a lien on any Property of the Company pursuant to Section 4068 of the Employee Retirement Income Security Act of 1974, as amended.

ARTICLE VII
 
EVENTS OF DEFAULT AND REMEDIES
 
SECTION 7.1.   Defaults and Remedies .
 
(a)   The Company is advised and recognizes that the Issuer will assign all of its right, title, and interest in and to all of the Installment Loan Payments required to be made pursuant to this Loan Agreement, and the right to receive and collect same, to the Trustee under the Indenture.  All rights of the Issuer (other than Unassigned Issuer’s Rights) against the Company arising under this Loan Agreement or the Indenture may be enforced by the Trustee, or the Registered Owners of the 2008A Bonds, to the extent provided in the Indenture, without making the Issuer a party.
 
(b)   The following shall constitute an "Event of Default" hereunder:
 
(i)   Payment of any Installment Loan Payment is not made when due and payable and such failure shall continue for one Business Day; or
 
(ii)   Payment of any amount due under this Loan Agreement other than Installment Loan Payments is not made when due and payable and such failure shall continue for fifteen (15) Business Days after the Trustee shall have given written notice to the Company specifying such default; or
 
(iii)   Failure to pay the principal of or interest on any Indebtedness of the Company for borrowed money, as and when the same shall become due and payable by the lapse of time, by declaration, by call for redemption or otherwise, and such default shall continue beyond the period of grace, if any, allowed with respect thereto; or
 
(iv)   Default or the happening of any event shall occur under any indenture, agreement, or other instrument under which any Indebtedness of the Company for borrowed money may be issued and such default or event shall continue for a period of time sufficient to permit the acceleration of the maturity of any Indebtedness of the Company outstanding thereunder; or
 
(v)   Default shall occur in the observance or performance of any covenant or agreement contained in Sections 6.9 through 6.12 hereof;
 
(vi)   Subject to Section 6.1(c) of the Indenture relating to force majeure, failure by the Company to observe or perform any other covenant, condition or agreement on its part to be observed or performed under the Indenture or the Loan Agreement, other than as referred to in subsections (i) through (v) inclusive above, for a period of 60 days after written notice, specifying such failure and requesting that it be remedied, is given to the Company by the Issuer or the Trustee; provided, however, that if the failure stated in the notice is such that is can be remedied but not within such 60-day period, it shall not constitute an Event of Default if the default, in the judgment of the Trustee in reliance upon advice of counsel, is correctable without material adverse effect on the Bondholders and if corrective action is instituted by the Company, within such period and is diligently pursued until the default is remedied; or
 
(vii)   Final judgment or judgments for the payment of money aggregating in excess of $250,000 is or are outstanding against the Company or against any Property or assets of the Company and any one of such judgments has remained unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period of 60 days from the date of its entry; or
 
(viii)   The occurrence of an Event of Default under the Indenture.
 
(c)   Upon the occurrence of an Event of Default, the Trustee (or in the case of an Event of Default arising out of Unassigned Issuer’s Rights, the Issuer) shall have the power to proceed with any right or remedy granted by the Constitution and laws of the Commonwealth, as it may deem best, including without limitation any suit, action or special proceeding in equity or at law, including mandamus proceedings, for the specific performance of any agreement, obligation or covenant contained herein or for the enforcement of any proper legal or equitable remedy as the Trustee shall deem most effectual to protect the rights of the Registered Owners, including without limitation, acceleration of all amounts payable hereunder; provided, however, any such proceedings shall be subject to the provisions of Section 6.1(c) of the Indenture relating to force majeure.  Upon the occurrence of an Event of Default under Section 61(a)(i) or 7.1(a)(ii) of the Indenture and upon the occurrence of any other Event of Default under the Indenture pursuant to the terms of which the Trustee shall have declared the 2008A Bonds immediately due and payable, then all payments required to be made by the Company under Section 5.4(b) (other than interest not yet accrued) shall become immediately due and payable.
 
(d)   Any amounts collected for non-payment of amounts described in Section 5.4 hereof pursuant to actions taken under this Section shall be paid into the Debt Service Fund and applied in accordance with the provisions of the Indenture.
 
SECTION 7.2.   Annulment of Acceleration .
 
If, in compliance with the requirements of Section 7.2 of the Indenture, the Trustee shall annul an acceleration declared due to any Event of Default under the Indenture, such annulment shall be deemed to also rescind any acceleration of all payments required under Section 5.4.  In case of any such annulment, or in case any proceeding taken by the Trustee on account of any such Event of Default shall have been discontinued or abandoned or determined adversely, then and in every such case the Issuer, the Company, the Trustee and the Registered Owners shall be restored to their former positions and rights hereunder, but no such annulment shall extend to any subsequent or other Event of Default or impair any right consequent thereon.

SECTION 7.3.   Agreement to Pay Attorneys’ Fees and Expenses .
 
In the event the Company should default under any of the provisions of this Loan Agreement and the Issuer or the Trustee should employ attorneys or incur other expenses for the collection of payments required hereunder or the enforcement of performance or observance of any obligation or agreement on the part of the Company herein contained, the Company agrees that it will upon demand therefore pay to the Issuer or the Trustee the reasonable fees and expenses of such attorneys and such other expenses so incurred by the Issuer or the Trustee.

SECTION 7.4.   General Enforcement Provisions .
 
(a)   The terms of this Loan Agreement may be enforced as to one or more breaches either separately or cumulatively.
 
(b)   No remedy conferred upon or reserved to the Issuer, the Trustee, or the Registered Owners of the 2008A Bonds in this Loan Agreement is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy now or hereafter existing at law or in equity or by statute.  No delay or omission to exercise any right or power accruing upon any default, omission, or failure of performance hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient.  In the event any provision contained in this Loan Agreement should be breached by the Company and thereafter duly waived, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach of this Loan Agreement.  No waiver by any party of any breach by any other party of any of the provisions of this Loan Agreement shall be construed as a waiver of any subsequent breach, whether of the same or of a different provision of this Loan Agreement.
 
SECTION 7.5.   Notice of Default .
 
The Company shall notify the Trustee and the Issuer in writing immediately if it becomes aware of the occurrence of any Event of Default hereunder or of any fact, condition or event which, with the giving of notice or passage of time or both, would become an Event of Default.

SECTION 7.6.   Unassigned Issuer’s Rights .
 
                      Notwithstanding any other provision hereof, upon the occurrence of an Event of Default arising out of Unassigned Issuer’s Rights, the Issuer reserves the right to exercise or refrain from exercising remedies under the Loan Agreement with respect to such Event of Default and such Event of Default may not be waived or annulled without the prior written consent of the Issuer.

ARTICLE VIII
 
MISCELLANEOUS
 
SECTION 8.1.   Term of Loan Agreement .
 
Subject to all provisions hereof which expressly state that the same shall survive termination hereof, this Loan Agreement shall terminate when (i) payment of all Debt Service relating to the 2008A Bonds shall have been made, (ii) the Company shall have satisfied all of its obligations to the Bank pursuant to the Indenture, this Agreement, the Letter of Credit and the Reimbursement Agreement, and (iii) all fees, indemnities, expenses and charges of the Issuer, Local IDA and the Trustee have been fully paid or provision satisfactory to such parties made for such payment.

SECTION 8.2.   Notices .
 
All notices, approvals, consents, requests and other communications hereunder shall be in writing and shall be deemed to have been given when delivered by hand or overnight courier service or mailed by first class registered or certified mail, return receipt requested, postage prepaid, or sent by telecopy and addressed as follows:

(a)   to the Company, to:
 
The York Water Company
130 East Market Street
York, PA  17401
Attention:  President
Telecopy No. (717) 852-0058

(b)   to the Issuer, to:
 
Pennsylvania Economic Development Financing Authority
Department of Community and Economic Development
Commonwealth Keystone Building
400 North Street, 4 th Floor
Harrisburg, PA  17120
Attention:  Program Manager
Telecopy No. (717) 787-0879

(c)   to the Trustee, to:
 
Manufacturers and Traders Trust Company
213 Market Street
Harrisburg, PA  17101
Attn:  Corporate Trust Department
Telecopy No. (717) 231-2615

A duplicate copy of each notice, approval, consent, request or other communication given hereunder by the Issuer, the Company or the Trustee to any one of the others shall also be given to all of the others at the address furnished from time to time.  The Issuer, the Company and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, approvals, consents, requests or other communications shall be sent or persons to whose attention the same shall be directed.

SECTION 8.3.   Benefit of Parties .
 
This Loan Agreement is made for the exclusive benefit of the Issuer, the Trustee, the Registered Owners, the Beneficial Owners, the Company and their respective successors and assigns herein permitted, and not for any other third party or parties; and nothing in this Loan Agreement, expressed or implied, is intended to confer upon any party or parties other than the Issuer, the Trustee, the Registered Owners, the Beneficial Owners, the Company and their respective successors and assigns herein permitted, any rights or remedies under or by reason of this Loan Agreement.

SECTION 8.4.   Severability .
 
If any provision hereof shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

SECTION 8.5.   Counterparts .
 
This Loan Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

SECTION 8.6.   Captions .
 
The captions and headings herein are for convenience only and in no way define, limit or describe the scope or intent of any provisions hereof.

SECTION 8.7.   Law Governing Construction of Loan Agreement .
 
This Loan Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth.

SECTION 8.8.   Payments on Non-Business Days .
 
If any payment required hereunder is due on a date that is not a Business Day, payment shall be made on the next succeeding Business Day with the same force and effect as if made on the date fixed for such payment, and no interest shall accrue on such amount for the period after such date.

SECTION 8.9.   Payments to be Sufficient to Meet DTC Requirements .
 
The Company hereby acknowledges that the 2008A Bonds are intended to be issued in book-entry form through DTC and that DTC has certain timing requirements and notice requirements.  The Company hereby agrees to make payments and give notices in a manner sufficient to comply from time to time with the DTC requirements, for so long as the 2008A Bonds are in book-entry form at DTC.

SECTION 8.10.   Reserved .
 
SECTION 8.11.   Limitation of Liability; No Personal Liability .
 
(a)   In the exercise of the powers of the Issuer or the Trustee hereunder or under the Indenture, including without limitation the application of moneys and the investment of funds, neither the Issuer or the Trustee nor their members, directors, officers, employees, attorneys or agents shall be accountable to the Company for any action taken or omitted by any of them in good faith and without gross negligence and with the belief that it is authorized or within the discretion or rights or powers conferred.  The Issuer and the Trustee and their members, directors, officers, employees, attorneys and agents shall be protected in acting upon any paper or document believed to be genuine, and any of them may conclusively rely upon the advice of counsel and may (but need not) require further evidence of any fact or matter before taking any action.  In the event of any default by the Issuer hereunder, the liability of the Issuer to the Company shall be enforceable only out of the Issuer’s interest under this Loan Agreement and there shall be no other recourse for damages by the Company against the Issuer, its members, directors, officers, employees, attorneys and agents, or any of the property now or hereafter owned by it or them.  All covenants, obligations and agreements of the Issuer contained in this Loan Agreement or the Indenture shall be effective to the extent authorized and permitted by applicable law.  No such covenant, obligation or agreement shall be deemed to be a covenant, obligation or agreement of any present or future member, director, officer, employee, attorney or agent of the Issuer, and no official executing the 2008A Bonds shall be liable personally on the 2008A Bonds or be subject to any personal liability or accountability by reason of the issuance thereof or by reason of the covenants, obligations or agreements of the Issuer contained in this Loan Agreement or the Indenture.
 
(b)   No claim shall be made by the Company or any of the Company’s affiliates against the Issuer or the Trustee or any of their affiliates, directors, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any breach or wrongful conduct (whether or not the claim therefore is based on contract, tort or duty imposed by law), in connection with, arising out of or in any way related to the transactions contemplated by this Loan Agreement, the Indenture or the other financing arrangements entered into in connection with the Project or Project Facilities, or any act or omission or event occurring in connection therewith; and the Company hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.
 

 
 
 
 

IN WITNESS WHEREOF, the Issuer and the Company have caused this Loan Agreement to be executed in their respective names by their authorized officers or representatives and their respective seals to be affixed hereto and have caused its execution hereof to be attested by its authorized officer, all as of the date first above written.

 
 
PENNSYLVANIA ECONOMIC DEVELOPMENT
FINANCING AUTHORITY
 
Attest:      
By: /s/Craig S. Petrasic
By:
/s/Stephen M. Drizos  
Craig S. Petrasic    Stephen M. Drizos  
Assistant Secretary    Executive Director  
       
       

 
THE YORK WATER COMPANY
 
Attest:      
By: /s/Bruce C. McIntosh
B y:
/s/Jeffrey R. Hines  
Bruce C. McIntosh   Jeffrey R. Hines  
Secretary   President and Chief Executive Officer  
       
       


 
 
 
 

EXHIBIT A

NONDISCRIMINATION/SEXUAL HARASSMENT CLAUSE

During the term of the contract, Contractor agrees as follows:

1.   In the hiring of any employee(s) for the manufacture of supplies, performance of work, or any other activity required under the contract or any subcontract, the Contractor, subcontractor, or any person acting on behalf of the Contractor or subcontractor shall not, by reason of gender, race, creed, or color, discriminate against any citizen of this Commonwealth who is qualified and available to perform the work to which the employment relates.
 
2.   Neither the contractor nor any subcontractor nor any person on their behalf shall in any manner discriminate against or intimidate any employee involved in the manufacture or supplies, the performance of work, or any other activity required under the contract on account of gender, race, creed, or color.
 
3.   Contractors and subcontractors shall establish and maintain a written sexual harassment policy and shall inform their employees of this policy.  The policy must contain a notice that sexual harassment will not be tolerated and employees who practice it will be disciplined.
 
4.   Contractors shall not discriminate by reason of gender, race, creed, or color against any subcontractor or supplier who is qualified to perform the work to which the contracts relate.
 
5.   The Contractor of each subcontractor shall furnish all necessary employment documents and records to and permit access to their books, records, and accounts by the contracting agency and the Bureau of Contract Administration and Business Development, for purposes of investigation, to ascertain compliance with provisions of this Nondiscrimination/Sexual Harassment Clause.  If the Contractor or any subcontractor does not possess documents or records reflecting the necessary information requested, the Contractor or subcontractor shall furnish such information on reports forms supplied by the contracting agency or the Bureau of Contract Administration and Business Development.
 
6.   The Contractor shall include the provisions of this Nondiscrimination/Sexual Harassment Clause in every subcontract so that such provisions will be binding upon each subcontractor.
 
7.   The Commonwealth may cancel or terminate the contract, and all money due or to become due under the contract may be forfeited for a violation of the terms and conditions of this Nondiscrimination/Sexual Harassment Clause.  In addition, the agency may proceed with debarment or suspension and may place the Contractor in the Contractor Responsibility file.
 

 
 
 
 

EXHIBIT 10.2
 
TRUST INDENTURE
 
between
 
PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY,
as Issuer
 
and
 
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Trustee
 
 
Dated as of May 1, 2008
 
$12,000,000
PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY
Exempt Facilities Revenue Refunding Bonds
Series A of 2008
(The York Water Company Project)


 
 
 
 

TABLE OF CONTENTS
 

 
ARTICLE I DEFINITIONS 
Section 1.1. Definitions. 
Section 1.2. Certain Rules of Interpretation. 
 
ARTICLE II THE 2008A BONDS 
Section 2.1. Authorized Amount and Issuance of 2008A Bonds; Disposition of 2008A
Bond Proceeds. 
Section 2.2. Terms of the 2008A Bonds. 
Section 2.3. [Reserved.] 
Section 2.4. [Reserved.] 
Section 2.5. Form of 2008A Bonds; Execution; 2008A Bonds Equally and Ratably Secured;
 Limited Obligation of the Issuer. 
Section 2.6. Authentication. 
Section 2.7. Registration, Transfer and Exchange .  
Section 2.8. Mutilated, Destroyed, Lost or Stolen 2008A Bonds .
Section 2.9. Payments of Principal, Redemption Price, Purchase Price and Interest; Persons
Entitled Thereto; Record Dates. 
Section 2.10. Temporary 2008A Bonds.
Section 2.11. Cancellation of Surrendered 2008A Bonds.
Section 2.12. Acts of Registered Owners; Evidence of Ownership. 
Section 2.13. Book Entry System. 
Section 2.14. Payments to Cede & Co.; Payments to Beneficial Owners. 
 
ARTICLE IIA   INTEREST RATE ON 2008A BONDS 
Section 2A.1.  Daily Rate. 
Section 2A.2.  Weekly Rate. 
Section 2A.3.  Monthly Rate. 
Section 2A.4.  Term Rate. 
Section 2A.5.  Conversion at Option of Company. 
Section 2A.6.  Initial Interest Rates and Subsequent Conversion.
 
ARTICLE IIB  TENDER AND PURCHASE OF 2008A BONDS 
Section 2B.1.  Optional Tender for Purchase of Weekly Rate and Monthly Rate 2008A
Bonds. 
Section 2B.2.  Mandatory Tender for Purchase on Each Conversion Date and at End of Each
Term Rate Period.
Section 2B.3.  Mandatory Tender for Purchase Upon Liquidity Facility Expiration,
Replacement or Termination Due to Non-Reimbursement or Default. 
Section 2B.4.  Mandatory Tender and Purchase Upon Provision or Termination of Liquidity
Facility. 
Section 2B.5.  Drawings on Liquidity Facility: 2008A Bonds Purchased with Proceeds of
Liquidity Facility. 
Section 2B.6.  [Reserved]. 
Section 2B.7.  No Tenders in Certain Circumstances. 
Section 2B.8.  Inadequate Funds for Tenders. 
 
LETTER OF CREDIT AND LETTER OF CREDIT FACILITY 
Section 2C.1.  Liquidity Facility. 
Section 2C.2.  Drawings on Liquidity Facility. 
Section 2C.3.  Reduction. 
Section 2C.4.  Expiration. 
Section 2C.5.   [Reserved.]
Section 2C.6.   Extension. 
Section 2C.7.  Replacement with Alternate Liquidity Facility. 
Section 2C.8.  Notices of Extension or Replacement. 
Section 2C.9.  Other Credit or Liquidity Enhancement:  No Credit or Liquidity Enhancement. 
 
ARTICLE IID  THE REMARKETING AGENT 
Section 2D.1.  Appointment. 
Section 2D.2  Duties. 
Section 2D.3.  Qualification.
Section 2D.4.  Resignation; Removal. 
Section 2D.5.  Notices. 
Section 2D.5.  Notices. 
 
ARTICLE III DEBT SERVICE FUND 
Section 3.1. Establishment of Funds and Accounts. 
Section 3.2. Debt Service Fund .  
Section 3.3. [Reserved.] 
Section 3.4. [Reserved.] 
Section 3.5. Debt Service Fund Moneys to be Held for All Registered Owners, With Certain
Exceptions. 
Section 3.6. Additional Accounts and Subaccounts.
 
ARTICLE IV INVESTMENTS, TAX COVENANTS 
Section 4.1. Investment of Funds. 
Section 4.2. Arbitrage Bond Covenant.
Section 4.3. Covenants Regarding Tax Exemption. 
 
ARTICLE V REDEMPTION OF 2008A BONDS 
Section 5.1. 2008A Bonds Subject to Redemption; Selection of 2008A Bonds for
Redemption.
Section 5.2. Notice of Redemption.
Section 5.3. Effect of Redemption. 
Section 5.4. Purchase in Lieu of Redemption. 
Section 5.5. Payment of Redemption Price; 2008A Bonds Redeemed in Part. 
Section 5.6. Optional Redemption. 
Section 5.7. Special Mandatory Redemption. 
Section 5.8. [Reserved.]
 
ARTICLE VI REPRESENTATIONS AND COVENANTS OF THE ISSUER 
Section 6.1. General Limitation; Issuer’s Representation. 
Section 6.2. Payment of 2008A Bonds and Performance of Covenants.
Section 6.3. Enforcement of the Loan Agreement.
Section 6.4. No Personal Liability. 
Section 6.5. Exemption from Federal Income Taxation.
Section 6.6. Corporate Existence; Compliance with Laws. 
Section 6.7. Filings. 
Section 6.8. Further Assurances. 
Section 6.9. Inspection of Books. 
 
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES 
Section 7.1. Events of Default Defined. 
Section 7.2. Acceleration and Annulment Thereof. 
Section 7.3. Legal Proceedings by Trustee. 
Section 7.4. Discontinuance of Proceedings by Trustee. 
Section 7.5. Registered Owners May Direct Proceedings. 
Section 7.6. Limitations on Actions by Registered Owners. 
Section 7.7. Trustee May Enforce Rights Without Possession of 2008A Bonds. 
Section 7.8. Remedies Not Exclusive. 
Section 7.9. Delays and Omissions Not to Impair Rights. 
Section 7.10. Application of Moneys in Event of Default. 
Section 7.11. Trustee’s Right to Receiver. 
Section 7.12. Trustee and Registered Owners Entitled to All Remedies. 
Section 7.13. Waiver of Past Defaults. 
 
ARTICLE VIII THE TRUSTEE AND THE PAYING AGENT 
Section 8.1. Certain Duties and Responsibilities of Trustee. 
Section 8.2. Notice if Event of Default Occurs or Notice if Taxability Occurs. 
Section 8.3. Certain Rights of Trustee. 
Section 8.4. Trustee Not Responsible for Recitals or Issuance of 2008A Bonds. 
Section 8.5. Trustee May Hold 2008A Bonds. 
Section 8.6. Money Held in Trust. 
Section 8.7. Corporate Trustee Required; Eligibility. 
Section 8.8. Resignation and Removal of Trustee; Appointment of Successor. 
Section 8.9. Acceptance of Appointment by Successor Trustee. 
Section 8.10. Merger, Conversion, Consolidation or Succession to Business. 
Section 8.11. Fees, Charges and Expenses of Trustee. 
Section 8.12. Appointment, Capacities and Duties of Paying Agent.
Section 8.13. Paying Agent May Act Through Agents; Answerable Only for Willful
Misconduct or Gross Negligence. 
Section 8.14. Compensation and Indemnity. 
Section 8.15. Reliance. 
Section 8.16. Paying Agent May Deal in 2008A Bonds. 
Section 8.17. Removal or Resignation of Paying Agent. 
Section 8.18. Successor Paying Agents. 
Section 8.19. Trustee and Paying Agent Obligations Survive Final Payment or Defeasance. 
 
ARTICLE IX AMENDMENTS AND SUPPLEMENTS 
Section 9.1. Amendments and Supplements Without Registered Owners’ Consent. 
Section 9.2. Amendments With Company and Registered Owners’ Consent. 
Section 9.3. Amendments to Loan Agreement. 
Section 9.4. Right to Payment. 
Section 9.5. Amendment of Letter of Credit Facility. 
Section 9.6. Bank Consent. 
 
ARTICLE X DEFEASANCE 
Section 10.1. Defeasance. 
Section 10.2. Effect of Defeasance. 
 
ARTICLE XI MISCELLANEOUS PROVISIONS 
Section 11.1. Limitations on Recourse; Immunity of Certain Persons.
Section 11.2. Deposit of Funds for Payment of 2008A Bonds. 
Section 11.3. No Rights Conferred on Others. 
Section 11.4. Illegal, Etc. Provisions Disregarded.
Section 11.5. Substitute Publication of Notice.
Section 11.6. Mailed Notice. 
Section 11.7. Governing Law. 
Section 11.8. Successors and Assigns. 
Section 11.9. Action by Company. 
Section 11.10. Headings and Subheadings for Convenience Only. 
Section 11.11. Counterparts. 
Section 11.12. Additional Notices to Rating Agencies. 
 

Exhibit A                      —           Form of 2008A Bond
Exhibit B                      —           Letter of Representations to DTC
Exhibit C                      —           Form of Notice of Tender
 

 
 
 
 
 

This Trust Indenture, dated as of May 1, 2008 (the "Indenture") between the PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY, (the "Issuer"), a public instrumentality of the Commonwealth of Pennsylvania (the "Commonwealth") and a public body corporate and politic organized and existing under the Pennsylvania Economic Development Financing Law, as amended (as defined herein, the "Act") and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York state chartered bank with trust powers duly organized and existing under the laws of the State of New York with a corporate trust office in Harrisburg, Pennsylvania, as Trustee (the "Trustee"),
 
W I T N E S S E T H :
 
WHEREAS, the Issuer is empowered by the provisions of the Act, to enter into agreements providing for the financing of the acquisition, construction and equipping of industrial, commercial and specialized enterprises for the public for purposes of alleviating unemployment, maintaining employment at a high level and encouraging economic development in the Commonwealth and promoting the health, safety and general welfare of the people of the Commonwealth within the meaning of the Act, including solid waste disposal and recycling facilities; and
 
WHEREAS, the Issuer has previously issued on April 7, 2004 its $7,300,000 aggregate principal amount Exempt Facilities Revenue Bonds (The York Water Company Project) Series A of 2004 (the "2004A Bonds") and on December 9, 2004, the Issuer issued its $12,000,000 aggregate principal amount Exempt Facilities Revenue 2008A Bonds (The York Water Company Project) Series B of 2004 (the "2004B Bonds," and together with the 2004A Bonds, the "2004 Bonds"), the proceeds of which were loaned to The York Water Company (the "Company") for the financing of costs associated with the construction of a water intake pumping station adjacent to the Susquehanna River and a water main pipeline, together with related pumps, fittings, valves and other water infrastructure system improvements, all for the purpose of providing an additional source of surface water supply to meet the needs of the Company’s residential, commercial and industrial customers (the "Project Facilities") and paying some or all of the costs of issuance of the 2004 Bonds; and
 
WHEREAS, the 2004A Bonds were issued as fixed rate bonds pursuant to a Trust Indenture between the Issuer and the Trustee dated as of April 1, 2004; and
 
WHEREAS, the 2004B Bonds were issued as variable rate bonds pursuant to a Trust Indenture between the Issuer and the Trustee dated as of December 1, 2004; and
 
WHEREAS, the 2004B Bonds are insured by a financial guaranty insurance policy issued by XL Capital Assurance, Inc. (the "Insurer"); and
 
WHEREAS, due to the recent disruption in the municipal bond market, the Issuer, at the request of the Company, has determined to replace the Insurer through the issuance of its refunding 2008A Bonds (the "Project"), and therefore has authorized the issuance of $12,000,000 Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project) (the "2008A Bonds"), the proceeds of which will be used, together with certain other available funds, to redeem $12,000,000 principal amount of the 2004B Bonds; and
 
WHEREAS, the 2008A Bonds will be issued as multi-modal bonds pursuant to this Indenture; and
 
WHEREAS, the Issuer has entered into a Loan Agreement dated as of May 1, 2008 (including any supplements and amendments thereto, the "Loan Agreement") with the Company providing for the loan by the Issuer to the Company of the proceeds of the 2008A Bonds for such purpose and the repayment of such loan by the Company; and
 
WHEREAS, the 2008A Bonds and the interest thereon are and shall be payable from funds drawn under an irrevocable, direct-pay letter of credit (the "Initial Letter of Credit") to be issued by PNC Bank, National Association (the "Initial LOC Bank").  Concurrently with the issuance of the 2008A Bonds and the Initial Letter of Credit by the Initial LOC Bank, the Company will enter into a Reimbursement, Credit and Security Agreement, dated as of May 1, 2008 (the "Reimbursement Agreement") with the Initial LOC Bank; and
 
WHEREAS, all things necessary to make the 2008A Bonds, when issued, executed and delivered by the Issuer and authenticated by the Trustee pursuant to this Indenture, the valid, legal and binding special obligations of the Issuer, and to constitute this Indenture a valid pledge of certain income and hereinafter defined Revenues of the Issuer for the payment of the principal of, premium, if any, and interest on the 2008A Bonds authenticated and delivered under this Indenture, have been performed and the creation, execution and delivery of this Indenture, and the creation, execution and issuance of the 2008A Bonds, subject to the terms hereof, have in all respects been duly authorized;
 
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
 
That the Issuer in consideration of the premises, of the acceptance by the Trustee of the trusts hereby created, of the mutual covenants herein contained and of the purchase and acceptance of the 2008A Bonds by the Owners thereof, and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in order to secure the payment of the principal or purchase price of, premium, if any, and interest on the 2008A Bonds according to their tenor and effect, and the performance and observance by the Issuer of all the covenants and conditions herein and therein contained and the rights of the Bank , (a) has executed and delivered this Indenture and (b) has agreed to sell, assign, transfer, set over and pledge, and by these presents does hereby sell, assign, transfer, set over and pledge unto Manufacturers and Traders Trust Company, Harrisburg, Pennsylvania, as Trustee, and the Bank and to their respective successors in trust and its assigns forever, to the extent provided in this Indenture, all of the right, title and interest of the Issuer in and to (i) the Loan Agreement (except for the Unassigned Issuer’s Rights as defined in the Loan Agreement), (ii) all the Revenues of the Issuer, and (iii) all funds (other than the Rebate Fund) and accounts established under this Indenture and all moneys and investments now or hereafter held therein ((i), (ii) and (iii) are collectively, the "Trust Estate"); provided, however, that nothing in the 2008A Bonds or in this Indenture shall be construed as pledging the faith or credit or taxing power of the Commonwealth or any other political subdivision of the Commonwealth, nor shall this Indenture or the 2008A Bonds constitute a general obligation of the Issuer, or a debt of the Commonwealth or any political subdivision thereof;
 
TO HAVE AND TO HOLD the same unto the Trustee and the Bank and their respective successors in trust forever;
 
IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the benefit and security first , of those who shall hold or own the 2008A Bonds issued hereunder, or any of them, without preference of any of said 2008A Bonds over any others thereof by reason of priority in the time of the issue or negotiation thereof or by reason of the date or maturity thereof, or for any other reason whatsoever, and second , of a Bank in consideration of the issuance by such Bank of a Letter of Credit, except as otherwise provided herein;
 
IT IS HEREBY COVENANTED, declared and agreed by and between the parties hereto, that all such 2008A Bonds are to be issued, authenticated as required by this Indenture, and delivered and that all property subject or to become subject hereto, including the Revenues, is to be held and applied upon and subject to the further covenants, conditions, uses and trusts hereinafter set forth; and the Issuer, for itself and its successors, does hereby covenant and agree to and with the Trustee and its successors in trust, for the benefit of those who shall hold all of the 2008A Bonds, or any of them, as follows:
 
ARTICLE I                                
 
DEFINITIONS
 
Section 1.1.   Definitions .
 
Terms used in this Indenture with the initial letter capitalized shall have the meanings specified in this Section 1.1 or if not defined in this Section 1.1, shall have the meanings specified in the recitals or other provisions of the Indenture as applicable.  All words and terms used in this Indenture and not defined herein shall, if defined in the Loan Agreement, have the meaning set forth therein.  The words "hereof," "herein," "hereto," "hereby," and "hereunder" (except in the Form of 2008A Bond) refer to the entire Indenture.  All words and terms importing the singular number shall, where the context requires, import the plural number and vice versa.
 
"Act" means the Pennsylvania Economic Development Financing Law (Act of August 23, 1967 P. L. 251, No. 102), as amended, including the amendments made by Act of December 17, 1993, No. 74.  The Act is codified at 73 P.S. § 371 et seq .
 
"Act of Bankruptcy" means any of the following events:
 
(i)   The Company (or any Person obligated, as guarantor or otherwise, to make payments under the Loan Agreement) shall (a) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or the like of the Company (or any such other Person obligated, as a guarantor or otherwise, to make payments under the Loan Agreement) or of all or any substantial part of its property, (b) commence a voluntary case under the United States Bankruptcy Code, as now or hereafter in effect and including any amendments thereto, or (c) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts; or
 
(ii)   A proceeding or case shall be commenced in any court of competent jurisdiction, seeking (a) the liquidation, reorganization, dissolution, winding-up, or composition or adjustment of debts, of the Company (or any Person obligated, as guarantor or otherwise, to make payments under the Loan Agreement), (b) the appointment of a trustee, receiver, custodian, liquidator or the like of the Company (or any Person obligated, as a guarantor or otherwise, to make payments under the Loan Agreement) or of all or any substantial part of its property, or (c) similar relief in respect of the Company (or any such other Person obligated, as a guarantor or otherwise, to make payments under the Loan Agreement) under any law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts.
 
"Administrative Expenses" means fees and expenses of the Trustee, the Paying Agent, the Remarketing Agent and the Issuer including, without limitation, the reasonable fees and expenses of their counsel and other professional advisors.
 
"Affiliate" means any person or company directly or indirectly controlling, controlled by or under common control with the Company.
 
"Alternate Credit Facility" means an irrevocable letter of credit, surety bond or other liquidity device authorizing drawings thereon by the Trustee which shall have the same material terms as the Initial Letter of Credit.
 
"Authorized Representative" means (i) in the case of the Issuer, each person at the time designated to act on behalf of the Issuer by the most recent written certificate furnished to the Company and the Trustee containing the specimen signature of such person and signed on behalf of the Issuer by its Secretary or Assistant Secretary; and (ii) with respect to each person at the time designated to act on behalf of any other Person (e.g., the Company or the Trustee), by written certificate furnished to the Trustee containing the specimen signature of such other person and signed on behalf of such person, in case of a partnership by each of its general partners (or any other person authorized to sign on behalf of such Partnership) and in the case of a corporation by a person authorized by such corporation to deliver such certificates.
 
"Authorized Denominations" means, while the 2008A Bonds are in a Daily Mode, a Weekly Mode, or a Monthly Mode, $100,000 and integral multiples of $5,000 in excess thereof, and while the 2008A Bonds are in a Term Mode, $5,000 or integral multiples thereof.
 
"Available Moneys" means proceeds of a drawing under the Letter of Credit and proceeds of any remarketing of 2008A Bonds delivered by the Remarketing Agent to the Paying Agent hereunder (other than proceeds received from the Issuer, the Company or an Affiliate of either or an affiliate of the Issuer).  "Available Moneys" also means moneys paid to the Trustee by the Company with respect to which the Trustee and the Rating Service has received an opinion acceptable to it of nationally recognized counsel experienced in bankruptcy matters, to the effect that use of such moneys to pay the principal or purchase price of, premium on or interest on the 2008A Bonds will not constitute an avoidable transfer under Section 547 of the United States Bankruptcy Code (Title 11 of the United States Code) in the event of a bankruptcy case by the Issuer or by or against the Company or any Affiliate, as debtor.
 
"Bank" means the Initial LOC Bank and any other institution providing an Alternate Credit Facility.
 
"Beneficial Owners" means the owners of beneficial interests in the 2008A Bonds while 2008A Bonds are held by a Securities Depository.
 
"Bond Counsel" means any firm of nationally recognized Bond Counsel selected by the Issuer and not unsatisfactory to the Trustee or the Company.
 
"Bond Documents" means the Financing Documents and all other agreements, certificates, documents and instruments delivered in connection with any of the Financing Documents.
 
"Bond Obligations" means the Debt Service due and payable and to become due and payable, and any other amounts which may be owed by the Company to, or on behalf of, the Issuer or the Trustee under the Bond Documents.
 
"Bond Resolution" means the resolution of the governing body of the Issuer adopted on April 29, 2008, authorizing the issuance of the 2008A Bonds.
 
"Business Day" means any day which is not (a) a Saturday, a Sunday or, in the State of New York, the Commonwealth of Pennsylvania (or any other jurisdiction in which the Letter of Credit is being administered) or the city in which the corporate trust operations office of the Trustee or any duly appointed Paying Agent, the Remarketing Agent, the Bank or the office of the Trustee at which this Indenture is being administered is located, a legal holiday on which banks are authorized or required by law or other governmental action to be closed, or (b) a day on which the New York Stock Exchange is closed.
 
"Code" means the Internal Revenue Code of 1986, as amended.
 
"Company Debt Service Account" means that special account of that name established pursuant to Section 3.1 hereof which shall also be an Eligible Account.
 
"Conversion Date" means any Interest Payment Date on which the Rate Mode of the 2008A Bonds is converted to another Rate Mode (including a conversion from one Term Mode to another Term Mode) pursuant to Section 2A.5.
 
"Daily Mode" means, with respect to the 2008A Bonds, the mode of bearing interest thereon at a Daily Rate.
 
"Daily Rate" means the rate of interest borne by the 2008A Bonds determined and adjusted daily for each Daily Rate Period pursuant to Section 2A.1.
 
"Daily Rate Calculation Date" means each Business Day in each calendar week.
 
"Daily Rate Period" means, while the 2008A Bonds bear interest at a Daily Rate, the period commencing on a Business Day and extending to, but not including, the next succeeding Business Day.
 
"Dated Date" means the date of delivery of the 2008A Bonds.
 
"Debt Service" means the principal of, premium, if any, and interest on the 2008A Bonds.
 
"Debt Service Fund" means the special fund of that name created pursuant to Section 3.1 hereof which shall also be an Eligible Account.
 
"Department" means the Department of Community and Economic Development of the Commonwealth.
 
"Determination of Taxability" means a Final Determination by the Internal Revenue Service or by a court of competent jurisdiction in the United States that, as a result of failure by the Company to observe or perform any covenant, condition or agreement on its part to be observed or performed under the Loan Agreement or as a result of the inaccuracy of any representation or agreement made by the Company under the Loan Agreement, the interest payable on any 2008A Bond is includable in the gross income of the Registered Owner or Beneficial Owner of such 2008A Bond (other than a Registered Owner or Beneficial Owner who is a "substantial user" of the Project Facilities or a "related person" within the meaning of Section 147(a) of the Code).
 
"Disqualified Contractor" means a Person which has been suspended or debarred by the Commonwealth under its Contractor Responsibility Program, Management Directive 215.9, as amended or replaced by a successive directive rule, regulation or statute from time to time or has been convicted by a court of competent jurisdiction of a crime for which a term of imprisonment of one year or more could have been imposed, and any Person controlled by a Person which has been so suspended, debarred or convicted.
 
"DTC" means The Depository Trust Company, acting as Securities Depository, as set forth in Section 2.13 hereof.
 
"DTC Participant" shall have the meaning assigned from time to time by DTC when used by DTC in reference to a "DTC Participant."
 
"Eligible Account" means an account that is either (a) maintained with a federal or state-chartered depository institution or trust company that has a Standard & Poor’s short-term debt rating of at least ‘A-2’ (or, if no short-term debt rating, a long-term debt rating of ‘BBB+’); or (b) maintained with the corporate trust department of a federal depository institution or state-chartered depository institution subject to regulations regarding fiduciary funds on deposit, which, in either case, has corporate trust powers and is acting in its fiduciary capacity.  In the event that a fund required hereby to be an "Eligible Account" no longer is such, the Trustee shall promptly (and in any case, within not more than 30 calendar days) move such account to another financial institution such that the Eligible Account requirement will again be satisfied.
 
"Event of Default" means any of the events described in Section 7.1 hereof.
 
"Expiration Date" means the stated expiration date of a Letter of Credit Facility, as such date may be extended from time to time by the Bank.
 
"Favorable Opinion of Bond Counsel" means an opinion of Bond Counsel addressed to the Issuer and the Trustee to the effect that the action proposed to be taken is authorized or permitted by the laws of the Commonwealth and this Indenture and will not, in and of itself, adversely affect any exclusion of interest on the 2008A Bonds from gross income of the owners thereof for federal income tax purposes.
 
"Final Determination" means, with respect to a private letter ruling or a technical advice memorandum of the Internal Revenue Service, written notice thereof in a proceeding in which the Company had an opportunity to participate and, otherwise, means written notice of a determination from which no further right of appeal exists or from which no appeal is timely filed with the next level of administrative or judicial review in a proceeding to which the Company was a party or in which the Company had the opportunity to participate.
 
"Financing Documents" means this Indenture, the Loan Agreement, the Tax Documents, the Letter of Credit and the 2008A Bonds.
 
"Government Obligations" means any one or more of the following:
 
(i)   Securities that are direct obligations of the United States of America or securities the timely payment of whose principal and interest is unconditionally guaranteed by the full faith and credit of the United States of America, trust receipts or other evidence of a direct claim upon the instruments described above, including but not limited to CATS (Certificates of Accrual on Treasury Securities), TIGRS (Treasury Investment Growth Receipts) and Government Trust Certificates; or
 
(ii)   To the extent permitted by law for the particular investment contemplated, pre-refunded municipal obligations meeting the conditions set forth in (a) through (e) below:
 
(a)   the municipal obligations are (i) not subject to redemption prior to maturity or (ii) the trustee for such municipal obligations has been given irrevocable instructions concerning their calling and redemption and the issuer of such municipal obligations has covenanted not to redeem such bonds other than as set forth in such instructions; and
 
(b)   the municipal obligations are secured by cash or non-callable United States Government Obligations that may be applied only to interest, principal and premium payments of such municipal obligations; and
 
(c)   the principal of and interest on such United States Government Obligations (plus any cash in an escrow fund) are sufficient to meet all of the liabilities of the municipal obligations; and
 
(d)   the cash and/or United States Government Obligations serving as security for the municipal obligations are held by an escrow agent or trustee; and
 
(e)   the United States Government Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent.
 
"Indenture" means this Trust Indenture dated as of May 1, 2008, as hereafter amended and supplemented by any Supplemental Indenture.
 
"Installment Loan Payments" shall have the meaning ascribed thereto in the Loan Agreement.
 
"Interest Payment Date" means (i) with respect to 2008A Bonds bearing interest at the Daily Rate, Weekly Rate or Monthly Rate, the first Business Day of each calendar month, and (ii) with respect to 2008A Bonds bearing interest at the Term Rate, each Semiannual Date for the 2008A Bonds.
 
"Investment Securities" means and includes any of the following securities on which neither the Company nor any of its subsidiaries is the obligor:  (a) Government Obligations or obligations of any United States Government Related Entity or obligations guaranteed or insured as to principal and interest by the United States of America or any United States Government Related Entity; "United States Government-Related Entity" shall mean the Export-Import Bank of the United States, Farmers Home Administration, Federal Housing Administration, General Services Administration, Government National Mortgage Association, Federal National Mortgage Association, each Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, each Federal Land Bank, each Federal Intermediate Credit Bank, Banks for Cooperatives and the Farm Credit System and The Student Loan Marketing Association; (b) obligations of a state, a territory, or a possession of the United States, or any political subdivision of any of the foregoing or of the District of Columbia as described in Section 103 of the Code, and rated not less than "A2" by Moody’s or "A" by another Nationally Recognized Statistical Rating Organization ("NRSRO"); split rated investments where one of the ratings falls below the minimum rating set forth above are not permitted; (c) domestic and eurodollar time deposits, overnight deposits, certificates of deposit and banker’s acceptances (i) maintained at or issued by any office or branch of any bank or trust company organized or licensed under the laws of the United States of America or any state thereof which bank or trust company has capital, surplus and undivided profits of at least $500,000,000, or (ii) maintained at or issued by any bank organized under the laws of a jurisdiction outside of the United States of America provided that the long term securities of such bank or trust company are rated A or higher (A2 in the case of Moody’s) by at least one NRSRO, in each case maturing not more than 360 days from the date of acquisition thereof; split rated investments where one of the ratings falls below the minimum rating set forth above are not permitted; (d) commercial paper and other instruments that are rated, or that are issued or guaranteed by an issuer that is rated, in the highest, short term category by at least two NRSROs (A-1 shall be deemed to be the highest short term rating for Standard and Poor’s) and maturing not more than 270 days from the date of acquisition thereof; (e) corporate notes and 2008A Bonds rated "A" or higher (A2 in the case of Moody’s) by two or more NRSROs maturing not more than 364 days from the date of acquisition thereof; split ratings where one of the ratings falls below the minimum rating set forth above are not permitted; (f) repurchase and reverse repurchase agreements with any bank (or a broker-dealer subsidiary of affiliate of such bank), provided such bank has combined capital, surplus and undivided profits of at least $500,000,000, or any primary dealer of United States government securities provided that the collateral is limited to the investments described in (a) above; (g) shares of any money market mutual fund registered with the Securities and Exchange Commission as an investment company under the Investment Advisors Act of 1940, as amended, including any such fund which is managed by the Trustee or one of its affiliates or subsidiaries, including, without limitation, any mutual fund for which the Trustee or an affiliate of the Trustee serves as investment manager, administrator, shareholder servicing agent, and/or custodian or subcustodian, notwithstanding that (i) the Trustee or an affiliate of the Trustee receives fees from such funds for services rendered, (ii) the Trustee charges and collects fees for services rendered pursuant to this Indenture, which fees are separate from the fees received from such funds, and (iii) services performed for such funds and pursuant to this Indenture may at times duplicate those provided to such funds by the Trustee or its affiliates; and (h) as otherwise permitted by Commonwealth law for such funds.
 
"Issue Date" means the date on which 2008A Bonds are first authenticated and delivered to the initial purchasers against payment therefor.
 
"Letter of Credit" means the Initial Letter of Credit issued by the Initial LOC Bank to the Trustee on the Issue Date and any Alternate Credit Facility delivered pursuant to Section 2C.7 hereof.
 
"Letter of Credit Facility" means a letter of credit which provides coverage for payment of the purchase price of the 2008A Bonds tendered but not remarketed, a surety bond, a standby bond purchase agreement or other liquidity facility issued in accordance with Section 2C.1(b) and Section 2C.7, including any Alternate Credit Facility.  Initially the "Letter of Credit Facility" means the Initial Letter of Credit issued by the Initial LOC Bank.
 
"Letter of Credit Debt Service Account" means the special trust account of that name established pursuant to Section 3.1 hereof which shall also be an Eligible Account.
 
"Letter of Credit Purchase Account" means the special trust account so designated established by the Paying Agent pursuant to Section 2B.1(g) which shall also be an Eligible Account and which shall be for the benefit of the Bondholders.
 
 "Loan Agreement" means the Loan Agreement dated as of May 1, 2008 between the Issuer and the Company, as hereafter amended and supplemented by any Supplemental Loan Agreement.
 
"Maturity Date" means October 1, 2029.
 
"Monthly Mode" means, with respect to the 2008A Bonds, the mode of bearing interest thereon at a Monthly Rate.
 
"Monthly Rate" means the rate of interest borne by the 2008A Bonds determined and adjusted monthly for each Monthly Rate Period pursuant to Section 2A.3 hereof.
 
"Monthly Rate Calculation Date" means the last Business Day of each calendar month.
 
"Monthly Rate Period" means, while the 2008A Bonds bear interest at a Monthly Rate, the period which begins on the first Business Day of each calendar month and ends and includes the date preceding the first Business Day of the next succeeding calendar month, except that (i) if the 2008A Bonds are initially issued in the Monthly Mode, the first Monthly Rate Period shall commence on the Issue Date and end on and include the last day preceding the first Business Day of the next succeeding calendar month, (ii) the first Monthly Rate Period following a conversion from a Daily Mode, Weekly Mode or Term Mode to the Monthly Mode shall commence on the Conversion Date of such conversion and end on and include the last day preceding the first Business Day of the next succeeding calendar month; and (iii) in the case of conversion from the Monthly Mode to a Daily Mode, Weekly Mode or Term Mode, the last Monthly Rate Period prior to such conversion shall end on and include the last day immediately preceding the Conversion Date of such conversion.
 
"Moody’s" means Moody’s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "Moody’s" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Company by written notice to the Trustee, the Remarketing Agent, the Bank, and the Issuer.
 
"Nominal Term Rate Period" means, with respect to a Term Mode, a period of two or more Semiannual Periods.
 
"Office" of an entity means its office at the address set forth in Section 11.5, or any other office designated in writing by such entity to the Issuer, the Trustee, the Paying Agent, the Remarketing Agent, the Company and the Bank as the Office of such entity for purposes of this Indenture; provided that, for the purposes of the definition of "Business Day" herein, the Office of the Trustee shall be its designated corporate trust office in Harrisburg, Pennsylvania as set forth in Section 11.5, the "Payment Office" and the "Delivery Office" of the Paying Agent shall be as set forth in Section 11.5 and the Office of the Bank shall be its office at which drawing documents are required to be presented under the Letter of Credit Facility (if any).
 
"Outstanding" when used with reference to 2008A Bonds means all 2008A Bonds authenticated and delivered under this Indenture as of the time in question, except:
 
(a)   All 2008A Bonds theretofore canceled or required to be canceled under Section 2.11 hereof;
 
(b)   On or after any Purchase Date for 2008A Bonds to be purchased pursuant to Article IIB, all Undelivered 2008A Bonds which are purchased on such date, provided that funds sufficient for such purchase are on deposit with the Paying Agent;
 
(c)   2008A Bonds for the payment or redemption of which provision has been made in accordance with Article X hereof; provided that, if such 2008A Bonds are being redeemed, the required notice of redemption shall have been given or provision satisfactory to the Trustee shall have been made therefor; and
 
(d)   2008A Bonds in substitution for which other 2008A Bonds have been authenticated and delivered pursuant to Article II hereof.
 
In determining whether the Registered Owners of a requisite aggregate principal amount of Outstanding 2008A Bonds have concurred in any request, demand, authorization, direction, notice, consent or waiver under the provisions hereof, Pledged Bonds and any 2008A Bonds which are owned of record by any Affiliate shall be disregarded and deemed not to be Outstanding hereunder for the purpose of any such determination (except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only 2008A Bonds which the Trustee knows to be so owned or held shall be disregarded) unless all 2008A Bonds are Pledged Bonds or 2008A Bonds owned by any Affiliate, in which case such 2008A Bonds shall be considered outstanding for the purpose of such determination.
 
"Paying Agent" means the Trustee which shall not be a Disqualified Contractor.
 
"Person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization, a governmental body or a political subdivision, a municipal corporation, public corporation or any other group or organization of individuals.
 
"Pledged Bonds" means 2008A Bonds pledged and assigned to the Bank in accordance with the Reimbursement Agreement.
 
"Preference Opinion" shall mean an opinion of nationally recognized counsel experienced in bankruptcy matters to the effect that the payment of principal, interest and premium (if any) on the 2008A Bonds made solely with drawings under the Letter of Credit and the payment of the purchase price of any 2008A Bonds made solely from the proceeds of the remarketing of the 2008A Bonds or drawings under the Letter of Credit will not be considered an avoidable "preferential transfer" by the Company or the Issuer under the United States Bankruptcy Code in the event of the commencement of a bankruptcy case under the United States Bankruptcy Code by the Issuer or by or against the Company or any Affiliate of the Company, as debtor.
 
"Prevailing Market Conditions" means, to the extent relevant (in the professional judgment of the Remarketing Agent) at the time of the establishment of an interest rate for the 2008A Bonds in accordance with this Indenture, (a) any past sales of, or efforts to sell, the 2008A Bonds at a purchase price equal to the principal amount thereof, plus accrued interest thereon (if any); (b) interest rates for comparable securities (i) with interest rate periods and demand purchase options substantially the same as the 2008A Bonds and bearing interest at a variable rate intended to maintain their secondary market price at the principal amount thereof, plus accrued interest thereon (if any), and (ii) rated by a national credit Rating Service in the same category as the 2008A Bonds if rated at the time; (c) other financial market rates and indices that may have a bearing on the rate of interest (which may include either tax-exempt or taxable rates or indices and may include, without limitation, rates and rate periods borne by comparable securities, commercial paper and United States Treasury obligations, commercial bank prime rates, federal funds rates, the London Interbank Offered Rate, the J. J. Kenny Index and the SIFMA Municipal Swap Index); (d) general financial market conditions (including current forward supply) that may have a bearing on the rate of interest; (e) the financial condition, results of operations and credit standing of the Bank and/or the Company to the extent such standing has a bearing on the rate of interest of the 2008A Bonds; and (f) any other relevant factor effecting the marketability of the 2008A Bonds.
 
"Purchase Date" means (a) with respect to any optional tender for purchase pursuant to Section 2B.1 of 2008A Bonds in the Daily Mode or Weekly Mode, any Business Day designated as the date of such purchase pursuant to such Section; (b) with respect to any optional tender for purchase pursuant to Section 2B.1 of 2008A Bonds in the Monthly Mode, the first Business Day of the month designated as the date of such purchase pursuant to such Section; (c) with respect to any mandatory tender for purchase pursuant to Section 2B.2, (1) in the case of 2008A Bonds which are to be purchased upon conversion from one Rate Mode to another Rate Mode pursuant to Section 2A.5 or in connection with a proposed conversion which has been rescinded by the Company, the Conversion Date or proposed Conversion Date or, if such Conversion Date or proposed Conversion Date is not a Business Day, the first Business Day succeeding such Conversion Date or proposed Conversion Date, and (2) in the case of 2008A Bonds which are to be purchased upon expiration of a Term Rate Period, the first Business Day immediately following the end of such Term Rate Period; (d) with respect to any mandatory tender for purchase pursuant to Section 2B.3, (1) in the case of 2008A Bonds which are to be purchased in anticipation of the expiration or replacement of a Letter of Credit Facility, the mandatory tender date as defined in Section 2B.3(a), and (2) in the case of 2008A Bonds which are to be purchased in connection with the termination of the Letter of Credit Facility due to default, the date specified by the Bank in its notice of termination; and (e) with respect to any mandatory tender for purchase pursuant to Section 2B.4 in the case of 2008A Bonds which are to be purchased in anticipation of the provision or termination of a Letter of Credit Facility by the Company, the mandatory tender date as set forth in Section 2B.4(a).
 
"Rate Mode" means the Daily Mode, the Weekly Mode, the Monthly Mode or a Term Mode.
 
"Rating Agency" or "Rating Service" means S&P, if the 2008A Bonds are rated by such at the time, and its successors and assigns, or if S&P shall be dissolved or no longer assigning credit ratings to debt such as the 2008A Bonds, then any other nationally-recognized entity assigning credit ratings to debt such as the 2008A Bonds designated by the Company and not unsatisfactory to the Issuer and the Trustee.
 
"Rebate Fund" means the separate fund, if any, created pursuant to the Tax Documents at the request of the Company and held by the Trustee but not as part of the Trust Estate under this Indenture.
 
"Register" means the registration books of the Issuer described in Section 2.7(a) hereof.
 
"Registered Owner" or "Bondholder" or "Owner" means the Person in whose name any 2008A Bond is registered pursuant to Section 2.7(a) hereof.
 
"Record Date" means, as the case may be, the applicable Regular or Special Record Date.
 
"Regular Record Date" means, while the 2008A Bonds are in the Daily Mode, Weekly Mode or Monthly Mode, the close of business on the last Business Day preceding an Interest Payment Date, and while the 2008A Bonds are in a Term Mode, the close of business on the fifteenth (15 th ) day of the calendar month immediately preceding the calendar month in which an Interest Payment Date occurs.
 
"Regulations" means the applicable proposed, temporary or final Income Tax Regulations promulgated under the Code, as such regulations may be amended or supplemented from time to time.
 
"Remarketing Agent" means PNC Capital Markets, Inc., Philadelphia, Pennsylvania, and its successor for the time being in such capacity as provided in Article IID.
 
"Remarketing Agreement" means the Remarketing Agreement dated as of May 1, 2008 between the Company and the Remarketing Agent or any subsequent remarketing agreement executed by the Company and any subsequent Remarketing Agent appointed pursuant hereto.
 
"Remarketing Proceeds Purchase Account" means the special trust account so designated established by the Paying Agent pursuant to Section 2B.1(f) which shall also be an Eligible Account and which shall be for the benefit of the Bondholders.
 
"Revenues of the Issuer" or "Revenues"  means and includes all payments by or on behalf of the Company, including specifically the Installment Loan Payments, under the Loan Agreement to be paid into the Debt Service Fund, any moneys paid to the Paying Agent under the terms of the Letter of Credit Facility or the Remarketing Agreement and all receipts of the Trustee credited against such payments, but not including payments with respect to the indemnification or reimbursement of certain expenses of the Trustee, Paying Agent, Remarketing Agent, Issuer and Local IDA under Sections 6.5, 6.6, 7.1 and 8.3, as the case may be, of the Loan Agreement or under any other guaranty or indemnification agreement.
 
"S&P" means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and their assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "S&P" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Company, by notice to the Trustee, the Remarketing Agent, the Bank, and the Issuer.
 
"Securities Depository" means any "clearing agency" registered under Section 17A of the Securities Exchange Act of 1934, as amended.
 
"Semiannual Date" means each April 1 and October 1.
 
"Semiannual Period" means a six month period commencing on a Semiannual Date and ending on and concluding the day (whether or not a Business Day) immediately preceding the next Semiannual Date.
 
"SIFMA Municipal Swap Index" means the Securities Industry and Financial Markets Association Municipal Swap Index as of the most recent date for which such index was published or such other weekly, high-grade index comprised of seven-day, tax-exempt multimodal notes produced by Municipal Market Data, Inc., or its successor, as otherwise designated by SIFMA; provided, however, that if such index is no longer produced by Municipal Market Data, Inc., or its successor, then "SIFMA Municipal Swap Index" shall mean such other reasonably comparable index selected by the Company.
 
"Special Mandatory Redemption" means any redemption of 2008A Bonds made pursuant to Section 5.7 hereof.
 
"Special Record Date" means the Special Record Date established by the Trustee pursuant to Section 2.9(c) hereof with respect to payment of overdue interest.
 
"Supplemental Indenture" means any supplement to this Indenture delivered pursuant to Article IX hereof.
 
"Supplemental Loan Agreement" means any supplement to the Loan Agreement entered into pursuant to Section 9.3 hereof.
 
"Tax Documents" means the Tax Certificate as to Arbitrage and Instructions as to Compliance with Provisions of Section 103(a) of the Internal Revenue Code of 1986, as amended, of the Company and the Issuer, dated as of the issuance date of the 2008A Bonds, and such other documents as Bond Counsel may require to be executed and delivered in connection with the issuance of the 2008A Bonds relating to their tax status under the Code.
 
"Term Mode" means, with respect to the 2008A Bonds, the mode of bearing interest thereon at Term Rates based on a constant Nominal Term Rate Period.
 
"Term Rate" means the rate of interest borne by the 2008A Bonds for a Term Rate Period determined pursuant to Section 2A.4.
 
"Term Rate Calculation Date" means a Business Day not more than 15 days and not less than one day prior to the first day of the corresponding Term Rate Period.
 
"Term Rate Period" means a period of two or more Semiannual Periods equal to the applicable Nominal Term Rate Period determined pursuant to Section 2A.4 commencing on the Semiannual Date immediately following the last day of the immediately preceding Term Rate Period and running through and ending on the day immediately preceding the Semiannual Date which follows such commencement date by a period equal to such Nominal Term Rate Period; except that the first Term Rate Period after conversion from a Daily Mode, Weekly Mode or Monthly Mode to a Term Mode shall commence on the Conversion Date of such conversion and end on the day immediately preceding the Semiannual Date which follows the Semiannual Date occurring on or immediately preceding the Conversion Date of such conversion by a period equal to the applicable Nominal Term Rate Period.
 
"Term Rate Period End Interest Payment Date" means the Semiannual Date immediately following the last day of a Term Rate Period.
 
"Trust Estate" means the trust estate as defined in the granting clauses in this Indenture.
 
"Undelivered 2008A Bonds" means any 2008A Bonds (or portions of 2008A Bonds) subject to purchase pursuant to Section 2B.1, 2B.2, 2B.3 or 2B.4 which the Owner has failed to deliver as described in Section 2B.1(k), 2B.2(j), 2B.3(k) or 2B.4(j).
 
"Underwriting Agreement" means the Purchase Contract dated May __, 2008 among the Issuer, the Company and PNC Capital Markets, Inc., as underwriter, providing for the purchase and sale of the 2008A Bonds.
 
"United States Government Obligations" means direct obligations of, or obligations the full and timely payment of which are unconditionally guaranteed by, the United States of America.
 
"Weekly Mode" means, with respect to the 2008A Bonds, the mode of bearing interest thereon at a Weekly Rate.
 
"Weekly Rate" means the rate of interest borne by the 2008A Bonds determined and adjusted weekly for each Weekly Rate Period pursuant to Section 2A.2.
 
"Weekly Rate Calculation Date" means Wednesday in each calendar week or, if any Wednesday is not a Business Day, the first Business Day preceding such Wednesday or the first Business Day following such Wednesday (as determined by the Remarketing Agent).
 
"Weekly Rate Period" means, while the 2008A Bonds bear interest at a Weekly Rate, the weekly period which begins on Thursday of each calendar week and ends at the close of business on Wednesday of the immediately following calendar week; except that (i) the initial Weekly Rate Period for the 2008A Bonds shall commence on the Issue Date and end on and include the first Wednesday occurring after the Issue Date, (ii) the first Weekly Rate Period following a conversion from a Daily Mode, Term Mode or Monthly Mode to the Weekly Mode shall commence on the Conversion Date of such conversion and end on and include the first Wednesday occurring after such date, and (iii) in the case of conversion from the Weekly Mode to a Daily Mode, Term Mode or Monthly Mode, the last Weekly Rate Period prior to such conversion shall end on and include the last day immediately preceding the Conversion Date of such conversion.
 
"2008A Bonds" means the Issuer’s $12,000,000 aggregate principal amount of Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project), authorized hereunder.
 
Section 1.2.   Certain Rules of Interpretation .
 
(a)   The definitions set forth in Article I and in the Loan Agreement shall be equally applicable to both the singular and plural forms of the terms therein defined and shall cover all genders.
 
(b)   "Herein," "hereby," "hereunder," "hereof," "hereinbefore," "hereinafter" and other equivalent words refer to this Indenture and not solely to the particular Article, Section or Subdivision hereof in which such word is used.
 
(c)   Reference herein to an article number ( e.g. , Article IV) or a section number ( e.g. , Section 6.2) shall be construed to be a reference to the designated article number or section number hereof unless the context or use clearly indicates another or different meaning or intent.
 
(d)   Words of the masculine gender shall mean and include correlative words of the feminine and neuter genders and words importing the singular number shall mean and include the plural number and vice versa.
 
(e)   Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons.
 
(f)   Any headings preceding the text of the several Articles and Sections of this Indenture, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Indenture, nor shall they affect its meaning, construction or effect.
 
(g)   References to statutes or regulations are to be construed as including all statutory or regulatory provisions consolidating, amending or replacing the statute or regulation referred to; and references to agreements and other contractual instruments shall be deemed to include any exhibits and appendices attached thereto and all amendments, supplements and other modifications to such instruments, but only to the extent such amendments, supplements and other modifications are not prohibited by the terms of this Indenture.
 
(h)   Whenever in this Indenture, the Issuer, the Company, the Remarking Agent,  the Paying Agent or the Trustee is named or referred to, it shall include, and shall be deemed to include, its respective successors and assigns whether so expressed or not.  All of the covenants, stipulations, obligations and agreements by or on behalf of, and other provisions for the benefit of, the Issuer, the Company, the Remarketing Agent, the Paying Agent and the Trustee contained in this Indenture shall inure to the benefit of such respective successors and assigns, bind and shall, inure to the benefit of any officer, board, commission, authority, agency or instrumentality to whom or to which there shall be transferred by or in accordance with law any right, power or duty of the Issuer or of its successors or assigns, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions of this Indenture.
 
(i)   Every "request," "order," "demand," "application," "appointment," "notice," "statement," "certificate," "consent," "direction" or similar action hereunder by persons referred to herein shall, unless the form thereof is specifically provided, be in writing and signed by an Authorized Representative of the person giving it.
 
(j)   References to any time of the day in this Indenture shall refer to eastern standard time or eastern daylight saving time, as in effect in the City of New York, New York on such day, unless otherwise noted.
 
ARTICLE II                                
 
THE 2008A BONDS
 
Section 2.1.   Authorized Amount and Issuance of 2008A Bonds; Disposition of 2008A Bond Proceeds .
 
Upon the execution and delivery of this Indenture, the Issuer shall execute the 2008A Bonds and deliver them to the Trustee for authentication.  At the written direction of the Issuer, the Trustee shall authenticate the 2008A Bonds, and deliver them to the purchasers thereof upon receipt by the Trustee of the amount due the Issuer for the initial delivery of the 2008A Bonds pursuant to the terms of the Underwriting Agreement by wire transfer of immediately available funds.  The proceeds of the 2008A Bonds shall be deposited by the Trustee in a settlement account and disbursed or transferred in amounts set forth in a Closing Statement executed by the Issuer and the Company.  The proceeds of the 2008A Bonds, together with an equity contribution from the Issuer, shall be used to redeem the 2004B 2008A Bonds and to pay Costs of Issuance of the 2008A Bonds.  The total principal amount of the 2008A Bonds that may be issued hereunder is hereby expressly limited to $12,000,000, except as provided in Section 2.8 hereof.  No additional 2008A Bonds may be issued under this Indenture.
 
Section 2.2.   Terms of the 2008A Bonds .
 
The 2008A Bonds shall be designated "Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Refunding 2008A Bonds, Series A of 2008 (The York Water Company Project)" and shall be issuable only as fully registered 2008A Bonds without coupons in Authorized Denominations.  Unless the Issuer shall otherwise direct, the 2008A Bonds shall be numbered separately from 1 upward.  The 2008A Bonds shall be dated their date of delivery and shall mature, subject to prior redemption upon the terms and conditions hereinafter set forth, on October 1, 2029.  Interest on the 2008A Bonds shall be determined as provided in Article IIA.  Interest on 2008A Bonds bearing interest at a Daily Rate, Weekly Rate or Monthly Rate shall be computed on the basis of a year of 365 or 366 days, as applicable, for the number of days actually elapsed.  Interest on 2008A Bonds bearing interest at a Term Rate shall be computed on the basis of a 360-day year of twelve 30-day months.  Notwithstanding any contrary provisions hereof, during any period in which a 2008A Bond is a Bank Bond, such 2008A Bonds shall bear interest at the Bank Rate, which shall be computed on the basis of a 360-day year consisting of twelve 30-day months (unless otherwise agreed to by the Company and the Bank).  Each 2008A Bond shall bear interest (i) from the date of authentication, if authenticated on an Interest Payment Date to which interest has been paid or duly provided for, or (ii) from the last preceding Interest Payment Date to which interest has been paid or duly provided for (or the Dated Date if no interest thereon has been paid) in all other cases.  Each 2008A Bond shall bear interest on overdue principal and premium, if any, and, to the extent permitted by law, on overdue interest at the rate of interest borne by the 2008A Bonds.
 
The 2008A Bonds are subject to optional redemption, mandatory redemption and special mandatory redemption prior to maturity, and optional and mandatory tender for purchase as set forth in Article IV and Article V, respectively, hereof.
 
Section 2.3.   [Reserved.]
 
Section 2.4.   [Reserved.]
 
Section 2.5.   Form of 2008A Bonds; Execution; 2008A Bonds Equally and Ratably Secured; Limited Obligation of the Issuer .
 
(a)   The 2008A Bonds shall be substantially in the form of Exhibit A attached to this Indenture and made a part hereof, with appropriate insertions, deletions and modifications to reflect terms of the 2008A Bonds.  2008A Bonds authenticated and delivered while such 2008A Bonds are in the Daily Mode, Weekly Mode, Monthly Mode or Term Mode, as the case may be, shall set forth on the face side thereof, in the place provided for designating the interest rate, the word "Daily Rate", "Weekly Rate", "Monthly Rate" or "____% Term Rate for Term Rate Period ending ________, ___", respectively.
 
(b)   The 2008A Bonds shall be executed on behalf of the Issuer with the manual or facsimile signature of its Chairman, Executive Director, or the Deputy Secretary for Business Assistance, Pennsylvania Department of Community and Economic Development (the "Deputy Secretary") and attested by the manual or facsimile signature of its Assistant Secretary, and shall have impressed or imprinted thereon the official seal of the Issuer or a facsimile thereof.  All authorized facsimile signatures shall have the same force and effect as if manually signed.  In case any official whose signature or a facsimile of whose signature shall appear on the 2008A Bonds shall cease to be such official before the delivery of such 2008A Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such official had remained in office until delivery.
 
(c)   The 2008A Bonds shall be equally and ratably secured under the Indenture, except as otherwise expressly provided herein.  The 2008A Bonds, together with premium, if any, and interest thereon, shall be special, limited obligations of the Issuer secured by the Trust Estate and payable solely from the Revenues (except to the extent paid out of moneys attributable to the 2008A Bond proceeds or the income from the temporary investment thereof) and shall be a valid claim of the respective owners thereof only against the funds (except the Rebate Fund) and accounts established hereunder and other moneys held by the Trustee or Paying Agent and the Revenues, which Revenues shall be used for no other purpose than to pay the principal and purchase price of, and premium, if any, and interest on, the 2008A Bonds, except as may be otherwise expressly authorized in this Indenture.   The 2008A Bonds are limited obligations of the Issuer and are payable solely from amounts drawn under the Letter of Credit.  Neither the Commonwealth of Pennsylvania nor any political subdivision thereof is or shall be obligated to pay the principal or purchase price of or premium, if any, or interest on the 2008A Bonds, and the 2008A Bonds shall not be deemed an obligation of the Commonwealth of Pennsylvania or any political subdivision thereof.  Neither the faith and credit nor the taxing power of the Commonwealth of Pennsylvania or any political subdivision thereof is pledged to the payment of the principal or purchase price of or premium , if any, or the interest on the 2008A Bonds.  The Issuer has no taxing power.   All covenants, promises, agreements, duties and obligations of the Issuer set forth in the Financing Documents shall be solely the covenants, promises, agreements, duties and obligations of the Issuer and shall not be deemed to be, or be, the covenants, promises, agreements, duties or obligations of any member, officer, employee or agent of the Issuer or the Commonwealth in his or her individual capacity, and no recourse shall be had for the payment of the principal of, or interest on the 2008A Bonds or any other amount payable hereunder or in connection herewith, or for any claim based hereon or on the 2008A Bonds or the Loan Agreement, against any such member, officer, employee or agent in his or her individual capacity.
 
Section 2.6.   Authentication .
 
No 2008A Bonds shall be valid for any purpose hereunder until the certificate of authentication printed thereon is duly executed by the manual signature of an authorized signatory of the Trustee, acting as authenticating agent.  Such authentication or registration shall be proof that the Registered Owner is entitled to the benefit of the trusts hereby created.  The certificate of the Trustee may be executed by any person authorized by the Trustee, and it shall not be necessary that the same authorized person sign the certificates of authentication of all 2008A Bonds.
 
Any 2008A Bond authenticated and delivered after the last Interest Payment Date preceding the termination of a Letter of Credit Facility shall have noted on the face thereof that the Letter of Credit Facility has expired and no longer supports payment of such 2008A Bond and any other information which the Issuer deems appropriate, unless an Alternate Credit Facility meeting the requirements of Section 2C.7 has been delivered in respect of such 2008A Bond.
 
Section 2.7.   Registration, Transfer and Exchange .
 
(a)   The ownership of each 2008A Bond shall be recorded in the registration books of the Issuer which shall be kept by the Trustee (the "Bond Register"), acting as Bond registrar, at its designated corporate trust operations office and shall contain such information as is necessary for the proper discharge of the duties of the Trustee hereunder.
 
(b)   2008A Bonds may be transferred or exchanged as follows:  Any 2008A Bond may be transferred if endorsed for such transfer by the Registered Owner thereof and surrendered by such Registered Owner or his duly appointed attorney to the Trustee at its designated corporate trust operations office, whereupon the Trustee shall authenticate and deliver to the transferee a new 2008A Bond or 2008A Bonds in the same denominations as the 2008A Bond surrendered for transfer or in different Authorized Denominations equal in the aggregate to the principal amount of the surrendered 2008A Bond.
 
(i)   Any 2008A Bond or 2008A Bonds may be exchanged for one or more 2008A Bonds and in the same principal amount, but in a different Authorized Denomination or Authorized Denominations.  Each 2008A Bond so to be exchanged shall be surrendered by the Registered Owner thereof or his duly appointed attorney to the Trustee at its designated corporate trust operations office, whereupon a new 2008A Bond or 2008A Bonds shall be authenticated and delivered to the Registered Owner.
 
(ii)   In the case of any 2008A Bond properly surrendered for partial redemption, the Trustee shall authenticate and deliver a new 2008A Bond in exchange therefor, such new 2008A Bond to be in an Authorized Denomination equal to the unredeemed principal amount of the surrendered 2008A Bond without cost to the Owner; provided that, at its option, the Trustee may certify the amount and date of partial redemption  upon the partial redemption certificate, if any, printed on the surrendered 2008A Bond and return such surrendered 2008A Bond to the Registered Owner in lieu of an exchange.
 
(iii)   No additional resolutions need be adopted by the governing body of the Issuer or any other body or person so as to accomplish the foregoing conversion and exchange or replacement of any 2008A Bond or portion thereof, and the Trustee shall provide for the completion, authentication, and delivery of the substitute 2008A Bonds in the manner prescribed herein.
 
Except as provided in subparagraph (iii) above, the Trustee shall not be required to effect any transfer or exchange during the fifteen (15) days immediately preceding the date of mailing of any notice of redemption or at any time following the mailing of any such notice in the case of 2008A Bonds selected for such redemption. No charge shall be imposed upon Registered Owners in connection with any transfer or exchange, except for taxes or governmental charges related thereto.  No transfers or exchanges shall be valid for any purposes hereunder except as provided above.
 
Section 2.8.   Mutilated, Destroyed, Lost or Stolen 2008A Bonds .
 
(a)   If any 2008A Bond is mutilated, lost, stolen or destroyed, the Registered Owner thereof shall be entitled to the issuance of a substitute 2008A Bond provided that:
 
(i)   in all cases, the Registered Owner must provide indemnity to the Issuer, the Company and the Trustee satisfactory to each such party to be indemnified against any and all claims arising out of or otherwise related to the issuance of substitute 2008A Bonds pursuant to this Section;
 
(ii)   in the case of a mutilated 2008A Bond the Registered Owner shall surrender the 2008A Bond to the Trustee for cancellation; and
 
(iii)   in the case of a lost, stolen or destroyed 2008A Bond, the Registered Owner shall provide evidence, satisfactory to the Trustee, of the ownership and the loss, theft or destruction of the affected 2008A Bond.
 
Upon compliance with the foregoing, a new 2008A Bond of like tenor and denomination, executed by the Issuer, shall be authenticated by the Trustee and delivered to the Registered Owner, all at the expense of the Registered Owner to whom the substitute 2008A Bond is delivered.  Notwithstanding the foregoing, the Trustee shall not be required to authenticate and deliver any substitute for a 2008A Bond which has been called for redemption or which has matured or is about to mature and, in any such case, the principal or redemption price then due or becoming due shall be paid by the Trustee in accordance with the terms of the mutilated, lost, stolen or destroyed 2008A Bond without substitution therefor.
 
(b)   Every 2008A Bond issued pursuant to this Section 2.8 shall constitute an additional contractual obligation of the Issuer, whether or not the 2008A Bond alleged to have been destroyed, lost or stolen shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other 2008A Bonds duly issued hereunder.
 
(c)   All 2008A Bonds shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen 2008A Bonds, and shall preclude any and all other rights or remedies, unless expressly inconsistent with any law or statute existing or hereafter enacted with respect to the replacement or payment of negotiable instruments, investments or other securities without their surrender.
 
Section 2.9.   Payments of Principal, Redemption Price, Purchase Price and Interest; Persons Entitled Thereto ; Record Dates .  
 
(a)   The principal, redemption price or purchase price of any 2008A Bond shall be payable upon presentation and surrender of such 2008A Bond at the Payment Office of the Paying Agent.  Interest on any 2008A Bond on each Interest Payment Date in respect thereof shall be payable by check mailed on the applicable Interest Payment Date to the address of the person entitled thereto as such address shall appear in the Bond Register; provided that at the written request of the Owner of at least $1,000,000 aggregate principal amount of 2008A Bonds (or the Bank to the extent the Bank owns any 2008A Bonds regardless of the principal amount owned) received by the Paying Agent at least one Business Day before the corresponding Record Date, interest accrued on the 2008A Bonds will be payable by wire transfer within the continental United States in immediately available funds to the bank account number of such Owner specified in such request and entered by the Paying Agent on the Bond Register.  The principal or redemption price and purchase price becoming due with respect to 2008A Bonds shall, at the written request of the Owner of at least $1,000,000 aggregate principal amount of such 2008A Bonds (or the Bank to the extent the Bank owns any 2008A Bonds regardless of the principal amount owned), be paid by wire transfer within the continental United States in immediately available funds to the bank account number of such Owner appearing on the Bond Register, but only upon presentation and surrender of such 2008A Bonds (subject to the book-entry provisions of Section 2.13).  The principal, redemption price or purchase price of and interest on the 2008A Bonds shall be paid in any coin or currency of the United States of America which, at the time of payment, is legal tender for the payment of public and private debts.
 
(b)   Interest on any 2008A Bond which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the person in whose name that 2008A Bond is registered at the close of business on the Regular Record Date for such interest.
 
(c)   Any interest on any 2008A Bond which is payable on any Interest Payment Date but is not paid or provided for on such date or within three Business Days thereafter (herein called "Defaulted Interest") shall forthwith cease to be payable to the Owner on the relevant Regular Record Date by virtue of having been such Owner, and such Defaulted Interest shall be paid, pursuant to Section 7.10, to the Owner in whose name the 2008A Bond is registered at the close of business on a Special Record Date to be fixed by the Trustee, such date to be not more than fifteen (15) nor less than five (5) days prior to the date of proposed payment.  The Paying Agent shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class postage prepaid, to each Bondholder, at his address as it appears in the Bond Register, not less than ten (10) days prior to such Special Record Date.
 
(d)   Subject to the foregoing provisions of this Section, each 2008A Bond delivered under this Indenture upon transfer of or exchange for or in lieu of any other 2008A Bond shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other 2008A Bond.
 
(e)   All 2008A Bonds issued hereunder are and are to be, to the extent provided in this Indenture, equally and ratably secured by this Indenture without preference, priority or distinction on account of the actual time or times of the authentication, delivery or maturity of the 2008A Bonds so that, subject as aforesaid, all 2008A Bonds at any time Outstanding hereunder shall have the same right, lien and preference under and by virtue of this Indenture and shall all be equally and ratably secured hereby with like effect as if they had all been executed, authenticated and delivered simultaneously on the date hereof, whether the same, or any of them, shall actually be disposed of at such date, or whether they, or any of them, shall be disposed of at some future date.
 
Section 2.10.   Temporary 2008A Bonds .
 
Pending preparation of definitive 2008A Bonds, the Issuer may issue, in lieu of definitive 2008A Bonds, one or more temporary printed or typewritten 2008A Bonds in Authorized Denominations, of substantially the tenor recited above.  At the written request of the Issuer, the Trustee shall authenticate definitive 2008A Bonds in exchange for and upon surrender of an equal principal amount of temporary  2008A Bonds.  Until so exchanged, temporary  2008A Bonds shall have the same rights, remedies and security hereunder as definitive 2008A Bonds.  Temporary 2008A Bonds shall be numbered consecutively upward from TR-1.
 
Section 2.11.   Cancellation of Surrendered 2008A Bonds .
 
The Trustee shall cancel (a) all 2008A Bonds surrendered for transfer or exchange, for payment at maturity or for redemption (unless the surrendered 2008A Bond is to be partially redeemed and the Trustee elects to return the 2008A Bond, certified as to the partial redemption, to the Registered Owner thereof pursuant to Section 2.7(b)(iii)), and (b) all 2008A Bonds purchased at the direction of the Company and surrendered to the Trustee for cancellation.  The Trustee shall deliver to the Issuer a certificate of cancellation in respect of all 2008A Bonds canceled in accordance with this Section.
 
Section 2.12.   Acts of Registered Owners; Evidence of Ownership .
 
Any action to be taken by Registered Owners may be evidenced by one or more concurrent written instruments of similar tenor signed or executed by such Registered Owners in person or by an agent appointed in writing.  The fact and date of the execution by any Person of any such instrument may be proved by acknowledgment before a notary public or other officer empowered to take acknowledgments or by an affidavit of a witness to such execution.  Any action by the Registered Owner of any 2008A Bond shall bind all future Registered Owners of the same 2008A Bond in respect of anything done or suffered by the Issuer or the Trustee in pursuance thereof.
 
Section 2.13.   Book Entry System .
 
(a)   DTC will act as Securities Depository for the 2008A Bonds.  The 2008A Bonds shall be initially issued in the form of a single fully registered 2008A Bond registered in the name of Cede & Co. (DTC’s partnership nominee).  So long as Cede & Co. is the Registered Owner of the 2008A Bonds, as nominee of DTC, references herein to Registered Owners, Bondholders or holders or Owners of the 2008A Bonds shall mean Cede & Co. and shall not mean the beneficial owners of the 2008A Bonds.
 
(b)   The ownership interest of each of the Beneficial Owners of the 2008A Bonds will be recorded through the records of a DTC Participant.  Transfers of beneficial ownership interests in the 2008A Bonds which are registered in the name of Cede & Co. will be accompanied by book entries made by DTC and, in turn, by the DTC Participants who act on behalf of the Beneficial Owners of the 2008A Bonds.
 
(c)   With respect to 2008A Bonds registered in the name of Cede & Co., DTC’s partnership nominee, the Issuer and the Trustee shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the 2008A Bonds, except as provided in this Indenture.  Without limiting the immediately preceding sentence, the Issuer and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the 2008A Bonds, (ii) the delivery to any DTC Participant or any other person, other than a Bondholder, as shown on the registration books, of any notice with respect to the 2008A Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or any other person, other than a Registered Owner, as shown in the registration books of any amount with respect to principal of, premium, if any, or interest on, the 2008A Bonds.
 
(d)   Notwithstanding any other provisions of this Indenture to the contrary, the Issuer and the Trustee shall be entitled to treat and consider the person in whose name each 2008A Bond is registered in the registration books as the absolute owner of such 2008A Bond for the purpose of payment of principal, premium, if any, and interest with respect to such 2008A Bond, for the purpose of giving notices of redemption and other matters with respect to such 2008A Bond, for the purpose of registering transfers with respect to such 2008A Bond, and for all other purposes whatsoever.  The Trustee shall pay all principal of, premium, if any, and interest on the 2008A Bonds only to or upon the order of the respective owners, as shown in the registration books as provided in this Indenture, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Issuer’s obligations with respect to payment of principal of, premium, if any, and interest on, the 2008A Bonds to the extent of the sum or sums so paid.
 
(e)   No person other than a Registered Owner, as shown in the registration books, shall receive a 2008A Bond certificate evidencing the obligation of the Issuer to make payments of principal, premium, if any, and interest, pursuant to this Indenture.
 
(f)   Any provision of this Indenture permitting or requiring the delivery of 2008A Bonds shall, while the book-entry system is in effect, be satisfied by the notation on the books of DTC or a DTC Participant, if applicable, of the transfer of the Beneficial Owner’s interest in such 2008A Bond.
 
(g)   So long as the book-entry system is in effect, the Trustee and the Issuer shall comply with the terms of the Letter of Representations, a copy of which is attached hereto as Exhibit B and made a part hereof, or an alternate Letter of Representations as required by DTC.
 
(h)   DTC may determine to discontinue providing its service with respect to the 2008A Bonds at any time by giving reasonable written notice and all relevant information on the Beneficial Owners of the 2008A Bonds to the Issuer or the Trustee.  If there is no successor Securities Depository appointed by the Issuer, the Trustee shall authenticate and deliver 2008A Bonds to the Beneficial Owners thereof in accordance with the information respecting the Beneficial Owners provided to the Trustee by DTC, but without any liability on the part of the Issuer or the Trustee for the accuracy of such information.  The Issuer, at the direction of the Company, may determine not to continue participation in the system of book entry transfers through DTC (or a successor Securities Depository) at any time by giving reasonable written notice to DTC (or a successor Securities Depository) and the Trustee.  In such event, the Issuer shall execute and deliver to the Trustee, and the Trustee shall authenticate and deliver the 2008A Bonds to the Beneficial Owners thereof in accordance with the information respecting the Beneficial Owners provided to the Trustee by DTC, but without any liability on the part of the Issuer or the Trustee for the accuracy of such information.
 
The Chairman, Executive Director or Deputy Secretary of the Issuer is hereby authorized to execute any additional Letter of Representations or similar document necessary from time to time to continue or provide for the DTC book-entry system.
 
(i)   Notwithstanding anything herein to the contrary, the provisions of this Section 2.13 are subject to the provisions of Section 2B.5 hereof (relating to Pledged Bonds).
 
Section 2.14.   Payments to Cede & Co.; Payments to Beneficial Owners .
 
(a)   Notwithstanding any other provision of this Indenture to the contrary, so long as any 2008A Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on, such 2008A Bond and all notices with respect to such 2008A Bond shall be made and given, respectively, pursuant to DTC’s rules and procedures.
 
(b)   Payments by the DTC Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is now the case with municipal securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such DTC Participant and not of DTC, the Trustee or the Issuer, subject to any statutory and regulatory requirements as may be in effect from time to time.
 
ARTICLE IIA
INTEREST RATE ON 2008A BONDS

           Section 2A.1.   Daily Rate .
 
(a)   A Daily Rate shall be determined for each Daily Rate Period as described below.  The Daily Rate for each Daily Rate Period shall be effective from and including the commencement date of such period and shall remain in effect through and including the last day thereof.  Each such Daily Rate shall be determined by the Remarketing Agent not later than 10:00 a.m. on the Daily Rate Calculation Date and shall be provided by the Remarketing Agent in writing to the Paying Agent by 1:00 p.m. on that same day.  Each such Daily Rate so to be determined shall be the lowest rate of interest which, in the judgment of the Remarketing Agent, would cause the 2008A Bonds in the Daily Mode to have a market value equal to the principal amount thereof, plus accrued interest (if any), taking into account Prevailing Market Conditions as of the date of determination; provided that:
 
(i)   if the Remarketing Agent fails for any reason to determine and notify the Paying Agent of the Daily Rate for any Daily Rate Period, such Daily Rate shall be the same as the Daily Rate in effect for the immediately preceding Daily Rate Period, except that if such failure continues for more than one consecutive Daily Rate Period, the Daily Rate thereafter shall be 135% of the SIFMA Municipal Swap Index published for that Daily Rate Period by Munifacts Wire System, Inc. (or a replacement publisher of the SIFMA Municipal Swap Index designated in writing by the Issuer at the direction of the Company to the Trustee and the Remarketing Agent); provided that if Munifacts Wire System, Inc. or such replacement publisher does not publish the SIFMA Municipal Swap Index on a day on which a Daily Rate is to be set, the Daily Rate shall be 135% of a comparable index selected by the Company published by Munifacts Wire System, Inc. or such replacement publisher at such time; and
 
(ii)   in no event shall the Daily Rate for any Daily Rate Period exceed 12% per annum.
 
(b)   No notice of Daily Rates will be given to the Company or the Owners of the 2008A Bonds; however, the Company and the Owners may obtain Daily Rates from the Remarketing Agent.  All determinations of Daily Rates pursuant to this Indenture shall be conclusive and binding upon the Issuer, the Company, the Bank, the Trustee, the Paying Agent and the Owners of the 2008A Bonds to which such rates are applicable.  The Issuer, the Company, the Bank, the Trustee, the Paying Agent and the Remarketing Agent shall not be liable to any Owner for failure to give any notice required with respect to Daily Rates or for failure of any person to receive any such notice.
 
           Section 2A.2.   Weekly Rate .
 
(a)   A Weekly Rate shall be determined for each Weekly Rate Period as described below.  The Weekly Rate for each Weekly Rate Period shall be effective from and including the commencement date of such period and shall remain in effect through and including the last day thereof.  Each such Weekly Rate shall be determined by the Remarketing Agent on the Weekly Rate Calculation Date and shall be provided by the Remarketing Agent in writing to the Paying Agent by the close of business on that same day.  Each such Weekly Rate so to be determined shall be the lowest rate of interest which, in the judgment of the Remarketing Agent, would cause the 2008A Bonds in the Weekly Mode to have a market value equal to the principal amount thereof, plus accrued interest (if any), taking into account Prevailing Market Conditions as of the date of determination; provided that:
 
(i)   if the Remarketing Agent fails for any reason to determine and notify the Paying Agent of the Weekly Rate for any Weekly Rate Period, such Weekly Rate shall be the same as the Weekly Rate in effect for the immediately preceding Weekly Rate Period, except that if such failure continues for more than one consecutive Weekly Rate Period, the Weekly Rate thereafter shall be 135% of the SIFMA Municipal Swap Index published for that Weekly Rate Period by Munifacts Wire System, Inc. (or a replacement publisher of the SIFMA Municipal Swap Index designated in writing by the Issuer at the direction of the Company to the Trustee and the Remarketing Agent); provided that if Munifacts Wire System, Inc. or such replacement publisher does not publish the SIFMA Municipal Swap Index on a day on which a Weekly Rate is to be set, the Weekly Rate shall be 135% of a comparable index selected by the Company published by Munifacts Wire System, Inc. or such replacement publisher at such time; and
 
(ii)   in no event shall the Weekly Rate for any Weekly Rate Period exceed 12% per annum.
 
(b)   No notice of Weekly Rates will be given to the Company or the Owners of the 2008A Bonds; however, the Company and the Owners may obtain Weekly Rates from the Remarketing Agent.  All determinations of Weekly Rates pursuant to this Indenture shall be conclusive and binding upon the Issuer, the Company, the Bank, the Trustee, the Paying Agent and the Owners of the 2008A Bonds to which such rates are applicable.  The Issuer, the Company, the Bank, the Trustee, the Paying Agent and the Remarketing Agent shall not be liable to any Owner for failure to give any notice required with respect to Weekly Rates or for failure of any person to receive any such notice.
 
Section 2A.3.   Monthly Rate .
 
(a)   A Monthly Rate shall be determined for each Monthly Rate Period as described below.  The Monthly Rate for each Monthly Rate Period shall be effective from and including the commencement date of such period and shall remain in effect through and including the last day thereof.  Each such Monthly Rate shall be determined by the Remarketing Agent on the Monthly Rate Calculation Date and shall be provided by the Remarketing Agent to the Paying Agent in writing by the close of business on the same day.  Each such Monthly Rate so to be determined shall be the lowest rate of interest which, in the judgment of the Remarketing Agent, would cause the 2008A Bonds in the Monthly Mode to have a market value equal to the principal amount thereof, plus accrued interest (if any), taking into account Prevailing Market Conditions as the date of determination; provided that:
 
(i)   if the Remarketing Agent fails for any reason to determine and notify the Paying Agent of the Monthly Rate for any Monthly Rate Period, such Monthly Rate shall be the same as the Monthly Rate in effect for the immediately preceding Monthly Rate Period, except that if such failure continues for more than one consecutive Monthly Rate Period, the Monthly Rate thereafter shall be 135% of the 30-day tax-exempt commercial paper rate published for that Monthly Rate Period by Munifacts Wire System, Inc. (or a replacement publisher of a tax-exempt commercial paper rate designated in writing by the Issuer at the direction of the Company to the Trustee and the Remarketing Agent), representing, as of the publication date, the average of 30-day yield evaluations at par of tax-exempt securities rated by the Rating Service in its highest commercial paper rating category; provided that if Munifacts Wire System, Inc. or such replacement publisher does not publish such a tax-exempt commercial paper rate on a day on which a Monthly Rate is to be set, the Monthly Rate shall be 85% of the interest rate for 90-day taxable commercial paper (prime paper placed through dealers) announced on such day by the Federal Reserve Bank of New York; and
 
(ii)   in no event shall the Monthly Rate for any Monthly Rate Period exceed 12% per annum.
 
(b)   No notice of Monthly Rates will be given to the Registered Owners of the 2008A Bonds; however, such Owners may obtain Monthly Rates from the Remarketing Agent.  All determinations of Monthly Rates pursuant to the Indenture shall be conclusive and binding upon the Issuer, the Company, the Bank, the , the Trustee, the Paying Agent and the Registered Owners of the 2008A Bonds to which such rates are applicable.  The Issuer, the Company, the Bank, the Trustee, the Paying Agent and the Remarketing Agent shall not be liable to any Registered Owner for failure to give any notice required with respect to Monthly Rates or for failure for any person to receive such notice.
 
Section 2A.4.   Term Rate .
 
(a)   A Term Rate shall be determined for each Term Rate Period as described below.  Upon conversion to a Term Mode, a Nominal Term Rate Period shall be fixed by the Company pursuant to Section 2A.5 as a term of two or more Semiannual Periods constituting the nominal length of each Term Rate Period thereafter until the date of a conversion to another Rate Mode.  Each Term Rate shall be determined by the Remarketing Agent on the Term Rate Calculation Date as the lowest rate of interest which, in the judgment of the Remarketing Agent taking into account Prevailing Market Conditions, would be necessary to enable the Remarketing Agent to arrange for the sale of the 2008A Bonds in the Term Mode in a secondary market sale at a price equal to the principal amount thereof on the first Business Day of the Term Rate Period; provided that (1) if the Remarketing Agent fails for any reason to determine the Term Rate for any Term Rate Period, such Term Rate shall be equal to 90% of the average of the annual 2008A Bond equivalent yield evaluations at par as provided by the Remarketing Agent as of the first day of the corresponding Term Rate Period or, if such day is not a Business Day, the next preceding Business Day, of United States Treasury obligations having a term to maturity similar to such Term Rate Period, and (2) in no event shall any Term Rate for any Term Rate Period exceed 12% per annum or, if a Letter of Credit Facility is in effect, the maximum interest rate set forth in the Reimbursement Agreement for Pledged Bonds.  Notice of each Term Rate shall promptly be given by telephone (promptly confirmed in writing) by the Remarketing Agent to the Issuer, the Trustee, the Company, the Bank and the Paying Agent.  Determinations of Term Rates pursuant to this Section shall be conclusive and binding upon the Issuer, the Company, the Trustee, the Paying Agent, the Bank and the Owners.
 
Section 2A.5.   Conversion at Option of Company .
 
(a)   The Company shall have the option to convert all (but not less than all) of the 2008A Bonds from one Rate Mode to another Rate Mode (including without limitation a conversion from one Term Mode to another Term Mode) as herein provided on any Conversion Date the Company shall select; provided that (i) each Conversion Date shall be an Interest Payment Date and (ii) 2008A Bonds in a Term Mode cannot be converted to another Rate Mode prior to the date on or after which such 2008A Bonds may first be redeemed at the option of the Company at the redemption price of par.  The Company may exercise its option to convert the 2008A Bonds regardless of the number of times such 2008A Bonds have previously been converted pursuant to the exercise of its option to convert.  The Company shall exercise such option by giving written notice to the Issuer, the Trustee, the Remarketing Agent, the Bank, and the Paying Agent stating its election to convert the Rate Mode of the 2008A Bonds to another Rate Mode specified in such notice and stating the Conversion Date therefor, in the case of 2008A Bonds in the Daily Mode or Weekly Mode, not less than 35 days, and in the case of 2008A Bonds in the Monthly Mode or Term Mode, not less than 45 days, prior to such Conversion Date (or such shorter time as may be agreed to by the Company, the Trustee, the Paying Agent and the Remarketing Agent).  Such notice also shall state whether or not the 2008A Bonds to be converted will be covered by a Letter of Credit Facility following such conversion.  Upon receipt of such notice by the Trustee, the Trustee may conclusively assume that the Issuer, the Remarketing Agent, the Bank, and the Paying Agent also received a copy of such notice and that such condition has been complied with.  In connection with each conversion to a Term Mode, the Nominal Term Rate Period shall be selected by the Company and designated in such notice.
 
(b)   The exercise of an option to convert shall not be effective unless there shall have been delivered to the Trustee:
 
(i)   an opinion of Bond Counsel addressed to the Trustee, the Paying Agent, the Issuer, the Company, the Bank, and the Remarketing Agent stating that (i) such conversion is authorized or permitted by this Indenture and the Act and (ii) such conversion will not adversely affect the exclusion from gross income of the interest on the 2008A Bonds for federal income tax purposes, which opinion shall be confirmed by such Bond Counsel on the Conversion Date;
 
(ii)   in the case of a conversion to a Term Mode, if a Letter of Credit Facility is in effect, unless the Company elects not to provide a Letter of Credit Facility for the 2008A Bonds following the Conversion Date, an amendment to the Letter of Credit Facility securing the 2008A Bonds to be converted or an Alternate Credit Facility which provides for (i) an Expiration Date not earlier than the first to occur of (A) the first anniversary of the Conversion Date or (B) the Term Rate Period End Interest Payment Date of the first Term Rate Period following the Conversion Date, and (ii) coverage of 193 days' accrued interest on the 2008A Bonds at a rate not less than the interest rate at which the then current Letter of Credit Facility for such 2008A Bonds provides coverage, subject to adjustment on the Conversion Date to the actual Term Rate as the same shall be fixed immediately prior to the Conversion Date (or evidence satisfactory to the Trustee and the Bank that the current Letter of Credit Facility provides for sufficient coverage without an amendment thereto);
 
(iii)   in the case of a conversion to the Daily Mode, Weekly Mode or Monthly Mode if the 2008A Bonds are covered by a Letter of Credit Facility, unless the Company elects not to provide a Letter of Credit Facility for the 2008A Bonds following the Conversion Date, an amendment to the Letter of Credit Facility or an Alternate Credit Facility which provides for (i) an Expiration Date not earlier than one year from the Conversion Date of such conversion and (ii) on and after such Conversion Date, coverage for 47 days' accrued interest on the 2008A Bonds at a maximum rate of 12% per annum (or evidence satisfactory to the Trustee and the Bank that the current Letter of Credit Facility provides for sufficient coverage without an amendment thereto); and
 
(iv)   in the case of a conversion to a Term Mode, evidence that the Company has complied with the continuing disclosure requirements of SEC Rule 15c2-12 or any successor rule or statutory provision unless the Company provides the Trustee with an opinion of Counsel to the effect that such compliance is not required.
 
(c)   In the case of any conversion, the Trustee shall give notice by first class mail (postage prepaid) to the Owners of the 2008A Bonds being converted, in the case of 2008A Bonds in the Daily Mode or Weekly Mode, not less than 20 days, and in the case of 2008A Bonds in the Monthly Mode or Term Mode,  not less than 30 days, prior to the proposed Conversion Date stating (i) that, in the case of a conversion to a Term Mode, the current Rate Mode of such 2008A Bonds is scheduled to be converted to a Term Mode and the Nominal Term Rate Period of such Term Mode, or in the case of a conversion to the Daily Mode, Weekly Mode or Monthly Mode, the interest rate on such 2008A Bonds is scheduled to be converted to the Daily Mode, Weekly Mode or Monthly Mode, (ii) the proposed Conversion Date, (iii) that the Company, on or before the date three (3) days prior to the proposed Conversion Date, may determine not to convert such 2008A Bonds in which case the Trustee shall notify the Owners in writing to such effect, and (iv) that all Outstanding 2008A Bonds will be subject to a mandatory purchase on the Conversion Date, or, if such Conversion Date is not a Business Day, the first Business Day following such Conversion Date, at a price of par plus accrued interest (if any).  The Issuer, the Company, the Trustee, the Paying Agent, the Bank and the Remarketing Agent shall not be liable to any Owner for failure to give any notice required above or for failure of any Owners to receive such notice.  Upon each conversion under this Section, all 2008A Bonds being converted shall be subject to mandatory purchase pursuant to Section 2B.2 on the Conversion Date, or, if such Conversion Date is not a Business Day, the first Business Day following such Conversion Date.
 
(d)   On or before the date three (3) days prior to the proposed Conversion Date, the Company may determine not to convert the 2008A Bonds proposed to be converted to a new Rate Mode pursuant to its election to convert given under Section 2A.5(a) by giving written notice to the Trustee, the Remarketing Agent, the Bank and the Paying Agent (with a copy to the Issuer).  In such event (i) the 2008A Bonds shall not be converted to the new Rate Mode but shall remain in the current Rate Mode and (ii) the Owners of the 2008A Bonds shall nevertheless be required to tender their 2008A Bonds for mandatory purchase pursuant to Section 2B.2.
 
Section 2A.6.   Initial Interest Rates and Subsequent Conversion .
 
The 2008A Bonds shall initially bear interest at a Weekly Rate (determined pursuant to this Article) for an initial Weekly Rate Period commencing on the Issue Date.  2008A Bonds may be converted from one Rate Mode to another Rate Mode as provided in Section 2A.5.  All 2008A Bonds shall bear interest at the same rate and shall be in the same Rate Mode at all times.

ARTICLE IIB
TENDER AND PURCHASE OF 2008A BONDS

Section 2B.1.   Optional Tender for Purchase of Daily Rate, Weekly Rate and Monthly Rate 2008A Bonds .
 
(a)   Optional Tender Rights .  The Owners of 2008A Bonds (or while the 2008A Bonds are held pursuant to a book-entry system, the Beneficial Owners) bearing interest at a Daily Rate, Weekly Rate or Monthly Rate shall have the right to tender their 2008A Bonds (or portions thereof in amounts equal to a minimum of $100,000 and whole multiples of $5,000 in excess of $100,000) for purchase, at a price equal to 100% of the principal amount thereof (or of such portions) plus accrued interest (if any), in the case of 2008A Bonds bearing interest at a Daily Rate or Weekly Rate, on any Business Day, and in the case of 2008A Bonds bearing interest at a Monthly Rate, on the first Business Day of the next succeeding calendar month (each such date is referred to hereinafter as a "Purchase Date") designated by written notice delivered to the Paying Agent and the Remarketing Agent on a Business Day (i) in the case of 2008A Bonds in the Daily Mode, by 10:30 a.m. on the Purchase Date, (ii) in the case of 2008A Bonds in the Weekly Mode, at least seven (7) days prior to the Purchase Date, or (iii) in the case of 2008A Bonds in the Monthly Mode, at least fourteen (14) days prior to the Purchase Date.
 
(b)   Notice by Owner of Tender .  Each notice of tender pursuant to Section 2B.1(a) shall:
 
(1)   be delivered to the Paying Agent at its Delivery Office and to the Remarketing Agent at its Office and be substantially in the form set forth in Exhibit D to this Indenture or in other form satisfactory to the Paying Agent;
 
(2)   state (i) the principal amount of the 2008A Bond to which the notice relates, (ii) that the Owner irrevocably demands purchase of such 2008A Bond (or a specified portion thereof in an amount such that each portion thereof is equal to a whole multiple of $5,000 but not less than $100,000), (iii) the Purchase Date on which such 2008A Bond (or specified portion) is to be purchased, and (iv) payment instructions with respect to the purchase price; and
 
(3)   automatically constitute (i) an irrevocable offer to sell the 2008A Bond (or portion thereof) to which such notice relates on the Purchase Date at a price equal to the principal amount of such 2008A Bond (or portion thereof) plus any interest thereon (if any) accrued and unpaid as of the Purchase Date, (ii) an irrevocable authorization and instruction to the Paying Agent to effect transfer of such 2008A Bond (or portion thereof) upon payment of such price to the Paying Agent on the Purchase Date, (iii) an irrevocable authorization and instruction to the Paying Agent to effect the exchange of such 2008A Bond in whole or in part for other 2008A Bonds in an equal aggregate principal amount so as to facilitate the sale of such 2008A Bond (or portion thereof), and (iv) an acknowledgment that such Owner will have no further rights with respect to such 2008A Bond (or portion thereof) upon payment of the purchase price thereof to the Paying Agent on the Purchase Date, except for the right of such Owner to receive such purchase price upon surrender of such 2008A Bond to the Paying Agent endorsed for transfer in blank and with guaranty of signatures satisfactory to the Paying Agent, and that after the Purchase Date such Owner will hold such 2008A Bond as agent for the Paying Agent.
 
The determination of the Paying Agent as to whether a notice of tender has been properly delivered pursuant to the foregoing shall be conclusive and binding upon the Owner.  Any notice of tender that is determined by the Paying Agent to fail to comply with the requirements of this Section 2B.1(b) shall be of no further force and effect notwithstanding any contrary provision of this Indenture.
 
(c)   Notice by Paying Agent of 2008A Bonds to be Remarketed .  Not later than 12:00 noon on the Business Day immediately following the date of receipt of any notice of tender pursuant to this Section, the Paying Agent shall notify by telephone promptly confirmed in writing the Remarketing Agent of the principal amount of 2008A Bonds (or portions thereof) to be purchased and the Purchase Date, provided that in the case of 2008A Bonds bearing interest at the Daily Rate, such notice shall be given as promptly as reasonably practicable on the date of receipt of notice of tender.
 
(d)   Remarketing of Tendered 2008A Bonds .  The Remarketing Agent shall use its reasonable best efforts to find purchasers for and arrange for the sale on the respective Purchase Date of all 2008A Bonds or portions thereof in respect of which a notice of tender has been received pursuant to Section 2B.1(a), at a price equal to 100% of the principal amount thereof plus accrued interest thereon (if any); provided that no 2008A Bonds shall be remarketed by the Remarketing Agent to the Issuer, the Company or an Affiliate or an affiliate of the Issuer.  The terms of any such sale shall provide for the payment of the purchase price for tendered 2008A Bonds to the Paying Agent (in exchange for new registered 2008A Bonds) in immediately available funds at or before 11:00 a.m. on the Purchase Date.  Notwithstanding the foregoing, the Remarketing Agent shall not arrange for the sale of any 2008A Bond as to which (i) there has been given to the applicable Bondholder a notice of mandatory tender for purchase pursuant to Section 2B.2, Section 2B.3 or Section 2B.4, a notice of replacement of the Letter of Credit Facility pursuant to Section 2C.8, or a notice of optional or special mandatory redemption pursuant to Sections 5.6 and 5.7, respectively, unless in each case the Remarketing Agent has delivered to the person to whom the sale is made a copy of such notice, and such person has acknowledged receipt and agreed to be bound by the terms thereof, or (ii) provision for payment of such 2008A Bond has been made pursuant to Section 10.1.
 
(e)   Certain Notices by Remarketing Agent and Paying Agent .
 
(1)   Notice by Remarketing Agent of Remarketed 2008A Bonds .  At or before 3:00 p.m. on the third Business Day immediately preceding, or, in the case of 2008A Bonds bearing interest at the Daily Rate, by 11:00 a.m. on, the  Purchase Date for purchase of optionally tendered 2008A Bonds pursuant to this Section, the Remarketing Agent shall give notice by telephone, telegram, telecopy, telex or other similar communication to the Paying Agent of (i) the principal amount of tendered 2008A Bonds which have been remarketed and (ii) the principal amount of tendered 2008A Bonds, if any, which have not been remarketed.
 
(2)   Notice by Paying Agent of 2008A Bonds Not Remarketed .  Not later than 5:00 p.m., or, in the case of 2008A Bonds bearing interest at the Daily Rate, by 11:15 a.m., on the date of receipt of any notice pursuant to Section 2B.1(e)(1) informing the Paying Agent that tendered 2008A Bonds have not been remarketed, the Paying Agent shall give notice by telephone, telegram, telecopy or other similar communication to the Company and (if a Letter of Credit Facility is in effect) the Bank specifying the principal amount of tendered 2008A Bonds as to which the Remarketing Agent has not found a purchaser at that time.
 
(3)   Remarketing Agent Notice of Amounts to be Drawn Under Letter of Credit Facility .  Prior to 10:00 a.m. on the second Business Day immediately preceding, or, in the case of 2008A Bonds bearing interest at the Daily Rate, by 11:30 a.m. on, the Purchase Date for purchase of tendered 2008A Bonds pursuant to this Section, the Remarketing Agent shall give telephonic notice, promptly confirmed in writing, to the Paying Agent, the Company and (if a Letter of Credit Facility is in effect) the Bank specifying the amounts of principal and interest, if any, representing purchase price of such 2008A Bonds, which the Remarketing Agent does not hold, for the benefit of the persons entitled to receive such purchase price, at the time such notice is given.
 
(4)   Notice by Remarketing Agent Identifying Purchasers of Remarketed 2008A Bonds .  At or before 12:00 Noon on the Business Day prior to, or, in the case of 2008A Bonds bearing interest at the Daily Rate, by 12:00 noon on, the Purchase Date for purchase of tendered 2008A Bonds pursuant to this Section, the Remarketing Agent shall give notice to the Paying Agent by telephone (promptly confirmed in writing) of the names, addresses and taxpayer identification numbers of the purchasers, the denominations of 2008A Bonds to be delivered as hereinafter provided to each purchaser and the payment instructions for regularly scheduled interest payments.
 
(f)   Payment of Remarketing Proceeds .  The Remarketing Agent shall cause to be paid to the Paying Agent by 11:00 a.m. on the date fixed for purchase of tendered 2008A Bonds all amounts then held by the Remarketing Agent representing proceeds of the remarketing of such 2008A Bonds, such payments to be made in immediately available funds.  All moneys received by the Paying Agent as remarketing proceeds shall be deposited by the Paying Agent in a special trust account designated as the "Remarketing Proceeds Purchase Account," which the Paying Agent shall establish and use as provided in this Article, and shall not be commingled with other funds held by the Paying Agent.  All moneys in the Remarketing Proceeds Purchase Account shall be held in trust, uninvested and without liability for interest thereon, pending application of such moneys by the Paying Agent pursuant to this Article.
 
(g)   Drawings on Letter of Credit Facility for Purchase Price .  If a Letter of Credit Facility is in effect, following receipt by the Paying Agent of the notice described in Section 2B.1(e)(3), the Paying Agent shall draw on the Purchase Date the amount set forth in such notice as not being held by the Remarketing Agent  under such Letter of Credit Facility in order for the Paying Agent to make timely payments of purchase price of tendered 2008A Bonds from remarketing proceeds or moneys drawn under such Letter of Credit Facility.  In the absence of such notice, the Paying Agent shall be deemed to have received notice from the Remarketing Agent specifying that no portion of the purchase price of such 2008A Bonds is held by the Remarketing Agent, in which case the Paying Agent shall draw the entire amount thereof under the Letter of Credit Facility.  Before 11:00 a.m. on the Purchase Date for purchase of tendered 2008A Bonds pursuant to this Section, the Paying Agent shall take all action necessary to draw on the Letter of Credit Facility securing such tendered 2008A Bonds in accordance with Section 2B.5(a) the amounts specified (or deemed specified) for receipt by the Paying Agent on such Purchase Date.  The Paying Agent shall establish a special trust account designated as the "Letter of Credit Purchase Account", into which the Paying Agent shall deposit and hold in trust, uninvested and without liability for interest thereon, all such amounts received by the Paying Agent from drawings on the applicable Letter of Credit Facility for purchases of tendered 2008A Bonds pending application of such amounts by the Paying Agent pursuant to this Article.  Any remaining amounts in the Letter of Credit Purchase Account after any application required by Section 2B.1(i) shall be paid over by the Paying Agent to the Bank for the account of the Company as reimbursement for the drawing on the Letter of Credit Facility from which such amounts were derived; provided that such Letter of Credit Facility shall be reinstated to the extent of such reimbursement and the Paying Agent shall take all necessary action on its part pursuant to such Letter of Credit Facility to effect such reinstatement.
 
(h)   Use of Funds in the Company Debt Service Account for Purchase Price .  If sufficient funds for the payment of the purchase price of tendered 2008A Bonds are not provided by draws on the Letter of Credit by 3:00pm, New York City time, on the Purchase Date, then the Paying Agent shall draw funds from the Company Debt Service Account to the extent necessary to pay the purchase price of such tendered 2008A Bonds in full.
 
(i)   Payments of Purchase Price by Paying Agent .  The Paying Agent shall pay the purchase price of 2008A Bonds tendered pursuant to this Section to the selling Owners thereof at its Office not later than 5:00 p.m. on the later of (i) the Purchase Date for the purchase of such 2008A Bonds pursuant to this Section or (ii) the date of surrender of such 2008A Bonds to the Paying Agent properly endorsed for transfer in blank and with all signatures guaranteed to the satisfaction of the Paying Agent.  Such payments shall be made in immediately available funds, but solely from the following sources in the order of priority indicated:
 
(1)   moneys held in the Remarketing Proceeds Purchase Account representing proceeds of the remarketing of such 2008A Bonds pursuant to Section 2B.1(d) to any person other than the Issuer, the Company or an Affiliate;
 
(2)   moneys held in the subaccount of the Letter of Credit Purchase Account representing proceeds of a drawing by the Paying Agent under the Letter of Credit Facility for such purpose; and
 
(3)   moneys in the Company’s Debt Service Account.
 
If sufficient funds are not available for the purchase of all tendered 2008A Bonds, no purchase shall be consummated.
 

(j)   Registration and Delivery of Tendered or Purchased 2008A Bonds .  On the Purchase Date for the purchase of tendered 2008A Bonds pursuant to this Section, the Paying Agent shall register and make available (or hold) all 2008A Bonds purchased on such date as follows:
 
(1)   2008A Bonds remarketed by the Remarketing Agent shall be registered and made available to the Remarketing Agent or the purchasers thereof (by overnight mail or similar service) in accordance with the written instructions of the Remarketing Agent; and
 
(2)   2008A Bonds purchased with proceeds of a drawing on the Letter of Credit Facility securing such 2008A Bonds shall be Pledged Bonds and shall be pledged and assigned to the Bank in accordance with the Reimbursement Agreement.
 
(k)   Delivery of 2008A Bonds: Effect of Failure to Surrender 2008A Bonds .  All 2008A Bonds to be purchased on any date shall be delivered to the Payment Office of the Paying Agent for receipt at or before 11:00 a.m. on the Purchase Date.  If the Owner of any 2008A Bond (or portion thereof) that is subject to purchase pursuant to this Section fails to deliver such 2008A Bond to the Paying Agent for purchase on the Purchase Date, and if the Paying Agent is in receipt of the purchase price therefor, such 2008A Bond (or portion thereof) shall nevertheless be deemed tendered and purchased on the Purchase Date fixed for purchase thereof and registration of the ownership of such 2008A Bond (or portion thereof) shall be transferred to the purchaser thereof as provided in Section 2B.1(j).  Any Owner of any 2008A Bond (or portion thereof) that is subject to purchase pursuant to this Section who so fails to deliver such 2008A Bond for purchase on (or before) the Purchase Date (1) shall have no further rights thereunder, except the right to receive the purchase price thereof upon presentation and surrender of such 2008A Bond to the Paying Agent properly endorsed for transfer in blank and with all signatures guaranteed to the satisfaction of the Paying Agent, and (2) shall thereafter hold such 2008A Bond as agent for the Paying Agent.  The Paying Agent shall, as to any tendered 2008A Bonds (or portions thereof) which have not been delivered to it ("Undelivered 2008A Bonds"), (i) promptly notify the Remarketing Agent of such non-delivery and (ii) place a stop transfer against an appropriate amount of 2008A Bonds registered in the name of the Owner(s) on the Bond Register.  The Paying Agent shall place such stop transfer(s) commencing with the lowest serial number 2008A Bond registered in the name of such Owner(s) (until stop transfers have been placed against an appropriate amount of 2008A Bonds) until the appropriate tendered 2008A Bonds are delivered to the Paying Agent.  Upon such delivery, the Paying Agent shall make any necessary adjustments to the Bond Register.  The Paying Agent shall hold moneys representing the purchase price of Undelivered 2008A Bonds in one or more separate accounts or subaccounts for the sole benefit of the former Owner(s) of such Undelivered 2008A Bonds.
 
Section 2B.2.   Mandatory Tender for Purchase on Each Conversion Date and at End of Each Term Rate Period .
 
(a)   Mandatory Tender Upon Conversion or at End of Term Rate Period .  The 2008A Bonds shall be subject to mandatory tender for purchase on (i) each Conversion Date for the 2008A Bonds, or, if such Conversion Date is not a Business Day, the first Business Day succeeding such Conversion Date, (ii) each proposed Conversion Date for the 2008A Bonds designated by the Company for a conversion election which the Company has rescinded pursuant to Section 2A.5(d), or, if such proposed Conversion Date is not a Business Day, the first Business Day succeeding such proposed Conversion Date, and (iii) and the first Business Day immediately following the end of each Term Rate Period for the 2008A Bonds, at a price equal to the principal amount thereof, plus accrued interest if the Purchase Date is not an Interest Payment Date.
 
(b)   Remarketing .  The Remarketing Agent shall use its reasonable best efforts to find purchasers for and arrange for the sale on the respective Purchase Date of all 2008A Bonds subject to mandatory tender for purchase pursuant to Section 2B.2(a), at a price equal to 100% of the principal amount thereof plus interest accrued to the Purchase Date (if any); provided that (1) no 2008A Bonds shall be remarketed by the Remarketing Agent to the Issuer, the Company or an Affiliate or an affiliate of the Issuer and (2) if a Letter of Credit Facility is in effect, the Letter of Credit Facility coverage requirements of Section 2B.2(c) shall be satisfied.  The terms of any sale arranged by the Remarketing Agent shall provide for the payment of the purchase price to the Paying Agent of the 2008A Bonds being remarketed in immediately available funds at or before 11:00 a.m. on the Purchase Date.
 
(c)   Letter of Credit Facility Coverage .  There shall be no remarketing of the 2008A Bonds pursuant to Section 2B.2(b) unless and until (1) in the case of a conversion, the applicable requirements of Section 2A.5 regarding the delivery of an amendment to the Letter of Credit Facility or an Alternate Credit Facility (if any) have been satisfied to the extent applicable and (2) in the case of a remarketing for a new Term Rate Period not in connection with a conversion, if the Company has elected to provide a Letter of Credit Facility for such 2008A Bonds for the new Term Rate Period, there shall have been delivered to the Paying Agent an amendment to the Letter of Credit Facility or an Alternate Credit Facility which provides for (i) an Expiration Date not earlier than the first to occur of (A) the first anniversary of the Purchase Date or (B) the Term Rate Period End Interest Payment Date next following the Purchase Date, and (ii) coverage of 193 days' accrued interest on the 2008A Bonds at a rate not less than the interest rate at which the then current Letter of Credit Facility provides coverage, subject to adjustment on the Purchase Date to the actual Term Rate as the same shall be fixed immediately prior to such date (or evidence satisfactory to the Trustee and the Bank that the current Letter of Credit Facility provides for sufficient coverage without an amendment thereto).
 
(d)   Certain Notices by Remarketing Agent .  Subject to the provisions of Section 2B.2(b), the Remarketing Agent shall give the following notices:
 
(1)   Notice by Remarketing Agent of Remarketed 2008A Bonds .  At or before 3:00 p.m. on the third Business Day immediately preceding the Purchase Date for purchase of 2008A Bonds pursuant to Section 2B.2(a), the Remarketing Agent shall give notice by telephone, telegram, telecopy, telex or other similar communication to the Paying Agent, the Company and the Bank of (i) the principal amount of 2008A Bonds which have been remarketed and (ii) the principal amount of 2008A Bonds, if any, which have not been remarketed.
 
(2)   Notice by Paying Agent of 2008A Bonds Not Remarketed .  Not later than 5:00 p.m. on the date of receipt of any notice pursuant to Section 2B.2(d)(1) informing the Paying Agent that 2008A Bonds have not been remarketed, the Paying Agent shall give notice by telephone, telegram, telecopy or other similar communication to the Company and the Bank, specifying the principal amount of 2008A Bonds as to which the Remarketing Agent has not found a purchaser at that time.
 
(3)   Remarketing Agent Notice of Amounts to be Drawn Under Letter of Credit Facility .  Prior to 10:00 a.m. on the second Business Day immediately preceding the Purchase Date for purchase of tendered 2008A Bonds pursuant to Section 2B.2(a), the Remarketing Agent shall give telephonic notice, promptly confirmed in writing, to the Paying Agent, the Company and the Bank specifying the amounts of principal and interest, if any, representing the purchase price of such 2008A Bonds, which the Remarketing Agent does not hold, for the benefit of the persons entitled to receive such purchase price, at the time such notice is given.
 
(4)   At or before 12:00 noon on the Business Day prior to the Purchase Date for the purchase of 2008A Bonds pursuant to Section 2B.2(a), the Remarketing Agent shall give notice to the Paying Agent by telephone (promptly confirmed in writing) of the names, addresses and taxpayer identification numbers of the purchasers and the denominations of 2008A Bonds to be delivered to each purchaser and the payment instructions for regularly scheduled interest payments.
 
(e)   Payment of Remarketing Proceeds .  The Remarketing Agent shall cause to be paid to the Paying Agent by 11:00 a.m. on the Purchase Date for purchase of 2008A Bonds pursuant to Section 2B.2(a) all amounts then held by the Remarketing Agent representing proceeds of the remarketing of such 2008A Bonds, such payment to be made in immediately available funds.  All such remarketing proceeds received by the Paying Agent shall be deposited in the Remarketing Proceeds Purchase Account and applied by the Paying Agent pursuant to this Article.
 
(f)   Drawings on Letter of Credit Facility for Purchase Price .  If a Letter of Credit Facility is in effect, following receipt by the Paying Agent of the notice set forth in Section 2B.2(d)(3), the Paying Agent shall draw on the Purchase Date the amounts set forth in such notice as not being held by the Remarketing Agent under such Letter of Credit Facility in order for the Paying Agent to make timely payments of purchase price of 2008A Bonds subject to mandatory tender pursuant to Section 2B.2(a) from remarketing proceeds or moneys drawn under such Letter of Credit Facility.  In the absence of such notice, the Paying Agent shall be deemed to have received notice from the Remarketing Agent specifying that no portion of the purchase price of such 2008A Bonds is held by the Remarketing Agent, in which case the Paying Agent shall draw the entire amount thereof under such Letter of Credit Facility.  Before 11:00 a.m. on the Purchase Date for purchase of 2008A Bonds pursuant to Section 2B.2(a), the Paying Agent shall take all action necessary to draw on such Letter of Credit Facility in accordance with Section 2B.5(a) hereof the amounts specified (or deemed specified) for receipt by the Paying Agent on such Purchase Date.  The Paying Agent shall deposit into the Letter of Credit Purchase Account and hold uninvested and without liability for interest all such amounts received by the Paying Agent from drawings on the Letter of Credit Facility securing such tendered 2008A Bonds for purchases of the 2008A Bonds pending application of such amounts by the Paying Agent pursuant to this Article.  Any remaining amounts in the applicable subaccount of the Letter of Credit Purchase Account after any application required by Section 2B.2(h) shall be paid over by the Paying Agent to the Bank for the account of the Company as reimbursement for the drawing on the applicable Letter of Credit Facility from which such amounts were derived; provided that the Letter of Credit Facility shall be reinstated to the extent of such reimbursement and the Paying Agent shall take all necessary action on its part pursuant to the Letter of Credit Facility to effect such reinstatement.
 
(g)   Use of Funds in the Company Debt Service Account for Purchase Price .  If sufficient funds for the payment of the purchase price of tendered 2008A Bonds are not provided by draws on the Letter of Credit by 3:00pm, New York City time, on the Purchase Date, then the Paying Agent shall draw funds from the Company Debt Service Account to the extent necessary to pay the purchase price of such tendered 2008A Bonds in full.
 
(h)   Payments of Purchase Price by Paying Agent .  The Paying Agent shall pay the purchase price of 2008A Bonds tendered pursuant to this Section to the selling Owners thereof at its Payment Office not later than 5:00 p.m. on the later of (i) the Purchase Date for the purchase of such 2008A Bonds or (ii) the date of surrender of such 2008A Bonds to the Paying Agent properly endorsed for transfer in blank and with all signatures guaranteed to the satisfaction of the Paying Agent.  Such payments shall be made in immediately available funds, but solely from the following sources in the order of priority indicated, neither the Issuer, the Trustee, the Paying Agent nor the Remarketing Agent having an obligation to use funds from any other source:
 
(1)   moneys held in the Remarketing Proceeds Purchase Account representing proceeds of the remarketing of the 2008A Bonds pursuant to Section 2B.2(b) to any person other than the Issuer, the Company or any Affiliate;
 
(2)   moneys held in the Letter of Credit Purchase Account representing proceeds of a drawing by the Paying Agent under the Letter of Credit Facility for such purpose; and
 
(3)   moneys held in the Company Debt Service Account.
 
If sufficient funds are not available for the purchase of all tendered 2008A Bonds, no purchase shall be consummated.

(i)   Registration and Delivery of Tendered or Purchased 2008A Bonds .  On the Purchase Date for the purchase of tendered 2008A Bonds pursuant to this Section, the Paying Agent shall register and deliver (or hold) all 2008A Bonds purchased on such date as follows:
 
(1)   2008A Bonds remarketed by the Remarketing Agent shall be registered and made available to the Remarketing Agent or the purchasers thereof (by overnight mail or similar service) in accordance with the written instructions of the Remarketing Agent; and
 
(2)   2008A Bonds purchased with proceeds of a drawing on the Letter of Credit Facility shall be Pledged Bonds and shall be pledged and assigned to the Bank in accordance with the Reimbursement Agreement.
 
(j)   Delivery of 2008A Bonds: Effect of Failure to Surrender 2008A Bonds .  All 2008A Bonds to be purchased on the Purchase Date shall be delivered to the Payment Office of the Paying Agent for receipt at or before 11:00 a.m. on such date.  If the Owner of any 2008A Bond that is subject to purchase pursuant to this Section fails to deliver such 2008A Bond to the Paying Agent for purchase on the Purchase Date, and if the Paying Agent is in receipt of the purchase price therefor, such 2008A Bond shall nevertheless be deemed tendered and purchased on the Purchase Date fixed for the purchase thereof, and registration of the ownership of such 2008A Bond shall be transferred to the purchaser thereof as provided in Section 2B.2(i). Any Owner who so fails to deliver such 2008A Bond for purchase on (or before) the Purchase Date (1) shall have no further rights thereunder, except the right to receive the purchase price thereof upon presentation and surrender of such 2008A Bond to the Paying Agent properly endorsed for transfer in blank and with all signatures guaranteed to the satisfaction of the Paying Agent and (2) shall thereafter hold such 2008A Bond as agent for the Paying Agent.  The Paying Agent shall, as to any tendered 2008A Bonds which have not been delivered to it ("Undelivered 2008A Bonds"), (i) promptly notify the Remarketing Agent of such non-delivery and (ii) place a stop transfer against such 2008A Bonds until they are delivered to the Paying Agent.  Upon such delivery, the Paying Agent shall make any necessary adjustments to the Bond Register.  The Paying Agent shall hold moneys representing the purchase price of Undelivered 2008A Bonds in one or more separate accounts or subaccounts for the sole benefit of the former Owner(s) of such Undelivered 2008A Bonds.
 
Section 2B.3.   Mandatory Tender for Purchase Upon Letter of Credit Facility Expiration, Replacement or Termination Due to Default .
 
(a)   Mandatory Tender Upon Expiration, Replacement or Termination Due to Default .  In the event the Company has elected to provide a Letter of Credit Facility for the 2008A Bonds, the 2008A Bonds shall be subject to mandatory tender for purchase on (1) the Interest Payment Date  immediately preceding the expiration date of the Letter of Credit Facility then in effect but not less than five days before such expiration date (or if such Interest Payment Date is not a Business Day, the Business Day next following such Interest Payment Date) in the event such Letter of Credit Facility shall not have been extended effective on or before such Interest Payment Date in accordance with Section 2C.6, (2) the date of replacement of the Letter of Credit Facility with an Alternate Credit Facility pursuant to Section 2C.7 or (3) the date specified by the Bank in a written notice to the Trustee, the Paying Agent, the Remarketing Agent and the Company (or if such date is not a Business Day, the next succeeding Business Day) stating that an Event of Termination, as defined in the Letter of Credit Facility, has occurred and is continuing and the Bank has exercised its option to terminate the Letter of Credit Facility (except as otherwise provided in Section 2B.7 hereof, in which event the 2008A Bonds will not be subject to mandatory tender for purchase).  Any such mandatory purchase shall be at a purchase price equal to the principal amount thereof plus accrued interest (if any); provided that if the 2008A Bonds are subject to mandatory tender pursuant to Section 2B.2 on a date coinciding with the Interest Payment Date on which the 2008A Bonds would otherwise be subject to mandatory tender pursuant to this Section, then mandatory tender for purchase shall be made pursuant to Section 2B.2 for purposes of this Indenture and the 2008A Bonds.  Each of the dates for purchase set forth in this Section 2B.3(a)(1), (2) and (3) above shall be a "mandatory tender date".
 
(b)   Notice to Registered Owners .  On or before the 20th day prior to any mandatory tender date, unless in the case of a mandatory tender for purchase pursuant to Section 2B.3(a)(1) above the Letter of Credit Facility shall have been extended in compliance with the conditions of Section 2C.6, the Paying Agent shall promptly give notice of mandatory tender for purchase pursuant to this Section by first-class mail to the Owners of all 2008A Bonds.  Such notice shall state that all Outstanding 2008A Bonds are subject to mandatory tender for purchase pursuant to the provisions thereof and of this Section in anticipation of the expiration, replacement or termination of the Letter of Credit Facility and will be purchased on the mandatory tender date (which date shall be set forth in such notice) by payment of a purchase price equal to the principal amount thereof plus accrued interest (if any).
 
(c)   No Remarketing .  Anything in this Indenture to the contrary notwithstanding, the Remarketing Agent shall have no obligation to remarket 2008A Bonds for purchase after notice of mandatory tender has been given pursuant to Section 2B.3(b) with respect to mandatory purchase under Section 2B.3(a)(1) or (3) unless such Letter of Credit Facility is being replaced with an Alternate Credit Facility or the Company has agreed to provide liquidity for the 2008A Bonds itself in accordance with Section 2C.1 hereof.
 
(d)   Remarketing of 2008A Bonds .  The Remarketing Agent shall use its reasonable best efforts to find purchasers for and arrange for the sale on the respective Purchase Date of all 2008A Bonds subject to mandatory tender for purchase pursuant to Section 2B.3(a)(2) (or, in the case of a mandatory tender for purchase pursuant to Section 2B.3(a)(1) or (3), if the Letter of Credit Facility is being replaced with an Alternate Credit Facility, Section 2B.3(a)(1) or (3)) at a price equal to 100% of the principal amount thereof plus accrued interest thereon (if any), provided that (i) no 2008A Bonds shall be remarketed by the Remarketing Agent to the Company or an Affiliate or to the Issuer or to an affiliate of the Issuer, and (ii) the Letter of Credit Facility coverage requirements of this Indenture shall be satisfied.  The terms of any sale arranged by the Remarketing Agent shall provide for the payment of the Purchase Price to the Paying Agent of the 2008A Bonds in immediately available funds at or before 11:00 a.m. on the Purchase Date.
 
(e)   Certain Notices by Remarketing Agent .  The Remarketing Agent shall give the following notices:
 
(1)   Notice by Remarketing Agent of Remarketed 2008A Bonds .  At or before 3:00 p.m. on the third Business Day immediately preceding the Purchase Date for purchase of 2008A Bonds pursuant to Section 2B.3(a)(2) (or, in the case of a mandatory tender for purchase pursuant to Section 2B.3(a)(1) or (3), if the Letter of Credit Facility is being replaced with an Alternate Credit Facility, Section 2B.3(a)(1) or (3)), the Remarketing Agent shall give notice by telephone, telegram, telecopy, telex or other similar communication to the Paying Agent, the Company and the Bank of (i) the principal amount of 2008A Bonds which have been remarketed and (ii) the principal amount of 2008A Bonds, if any, which have not been remarketed.
 
(2)   Notice by Paying Agent of 2008A Bonds Not Remarketed .  Not later than 5:00 p.m. on the date of receipt of any notice pursuant to Section 2B.3(e)(1) informing the Paying Agent that 2008A Bonds have not been remarketed, the Paying Agent shall give notice by telephone, telegram, telecopy or other similar communication to the Company and the Bank, specifying the principal amount of 2008A Bonds as to which the Remarketing Agent has not found a purchaser at that time.
 
(3)   Remarketing Agent Notice of Amounts to be Drawn Under Letter of Credit Facility .  Prior to 10:00 a.m. on the second Business Day immediately preceding the Purchase Date for purchase of tendered 2008A Bonds pursuant to Section 2B.3(a)(2) (or, in the case of a mandatory tender for purchase pursuant to Section 2B.3(a)(1) or (3), if the Letter of Credit Facility is being replaced with an Alternate Credit Facility, Section 2B.3(a)(1) or (3)), the Remarketing Agent shall give telephonic notice, promptly confirmed in writing, to the Paying Agent, the Company and the Bank specifying the amounts of principal and interest, if any, representing the purchase price of such 2008A Bonds, which the Remarketing Agent does not hold, for the benefit of the persons entitled to receive such purchase price, at the time such notice is given.
 
(4)   Remarketing Agent Notice of Bond Purchasers .  At or before 12:00 noon on the Business Day prior to the Purchase Date for the purchase of 2008A Bonds pursuant to Section 2B.3(a)(2) (or, in the case of a mandatory tender for purchase pursuant to Section 2B.3(a)(1) or (3), if the Letter of Credit Facility is being replaced with an Alternate Credit Facility, Section 2B.3(a)(1) or (3)), the Remarketing Agent shall give notice to the Paying Agent by telephone (promptly confirmed in writing) of the names, addresses and taxpayer identification numbers of the purchasers and the denominations of 2008A Bonds to be delivered to each purchaser and the payment instructions for regularly scheduled interest payments.
 
(f)   Payment of Remarketing Proceeds .  The Remarketing Agent shall cause to be paid to the Paying Agent by 11:00 a.m. on the Purchase Date for purchase of 2008A Bonds pursuant to Section 2B.3(a)(2) (or, in the case of a mandatory tender for purchase pursuant to Section 2B.3(a)(1) or (3), if the Letter of Credit Facility is being replaced with an Alternate Credit Facility, Section 2B.3(a)(1) or (3)) all amounts then held by the Remarketing Agent representing proceeds of the remarketing of such 2008A Bonds, such payment to be made in immediately available funds.  All such remarketing proceeds received by the Paying Agent shall be deposited in the Remarketing Proceeds Purchase Account and applied by the Paying Agent pursuant to this Article.
 
(g)   Drawings on Letter of Credit Facility for Purchase Price .  Following receipt of the notice specified in Section 2B.3(e)(3), the Paying Agent shall in accordance with Section 2B.5(a) draw on the Purchase Date the amounts set forth in such notice as not then held by the Remarketing Agent (except to the extent such amounts are then held by the Paying Agent) under the Letter of Credit Facility before 11:00 a.m. on the Purchase Date, for receipt by the Paying Agent on such day for the purchase of 2008A Bonds pursuant to this Section.  The proceeds of such drawing shall be deposited into the Letter of Credit Purchase Account for use to the extent necessary to effect such purchase of 2008A Bonds.  In the absence of such notice, the Paying Agent shall be deemed to have received notice from the Remarketing Agent specifying that no portion of the purchase price of such 2008A Bonds is held by the Remarketing Agent, in which case the Paying Agent shall draw the entire amount thereof under the Letter of Credit Facility.
 
(h)   Use of Funds in the Company Debt Service Account for Purchase Price .  If sufficient funds for the payment of the purchase price of tendered 2008A Bonds are not provided by draws on the Letter of Credit by 3:00pm, New York City time, on the Purchase Date, then the Paying Agent shall draw funds from the Company Debt Service Account to the extent necessary to pay the purchase price of such tendered 2008A Bonds in full.
 
(i)   Payments of Purchase Price by Paying Agent .  The Paying Agent shall pay the purchase price of 2008A Bonds tendered for purchase pursuant to this Section to the selling Owners thereof at its Payment Office not later than 5:00 p.m. on the later of (i) the Purchase Date for the purchase of such 2008A Bonds or (ii) the date of surrender of such 2008A Bonds to the Paying Agent properly endorsed for transfer in blank and with all signatures guaranteed to the satisfaction of the Paying Agent.  Such payments shall be made in immediately available funds, but solely from the following sources in the order of priority indicated, neither the Issuer, the Trustee nor the Paying Agent having an obligation to use funds from any other source:
 
(1)   moneys in the Remarketing Proceeds Purchase Account representing proceeds of the remarketing of the 2008A Bonds pursuant to Section 2B.3(d) to any person other than the Issuer, the Company or any Affiliate, which shall be applied as provided in such section;
 
(2)   moneys in the Letter of Credit Purchase Account representing proceeds of a drawing by the Paying Agent under the Letter of Credit Facility pursuant to Section 2B.3(g), which shall be applied as provided in such Section; and
 
(3)   moneys in the Company Debt Service Account.
 
(j)   Registration and Delivery of Tendered or Purchased 2008A Bonds .  On the Purchase Date for the purchase of 2008A Bonds pursuant to this Section, the Paying Agent shall register and make available all 2008A Bonds purchased on such date as follows:
 
(1)   2008A Bonds remarketed by the Remarketing Agent shall be registered and made available to the Remarketing Agent or the purchaser thereof (by overnight mail or similar service) in accordance with the written instructions of the Remarketing Agent; and
 
(2)   2008A Bonds purchased with proceeds of a drawing on the Letter of Credit Facility for which the Bank has not been reimbursed shall be Pledged Bonds and shall be pledged and assigned to the Bank  in accordance with the Reimbursement Agreement.
 
(k)   Delivery of 2008A Bonds: Effect of Failure to Surrender 2008A Bonds .  All 2008A Bonds to be purchased on the mandatory purchase date shall be delivered to the Office of the Paying Agent for receipt at or before 11:00 a.m. on such date.  If the Owner of any 2008A Bond that is subject to purchase pursuant to this Section fails to deliver such 2008A Bond to the Paying Agent for purchase on the Purchase Date, and if the Paying Agent is in receipt of the purchase price therefor, such 2008A Bond shall nevertheless be deemed tendered and purchased on the Purchase Date fixed for the purchase thereof and registration of the ownership of such 2008A Bond shall be transferred to the purchaser thereof as provided in Section 2B.3(j).  Any Owner who so fails to deliver such 2008A Bond for purchase on (or before) the Purchase Date (1) shall have no further rights thereunder, except the right to receive the purchase price thereof upon presentation and surrender of such 2008A Bond to the Paying Agent properly endorsed for transfer in blank and with all signatures guaranteed to the satisfaction of the Paying Agent and (2) shall thereafter hold such 2008A Bond as agent for the Paying Agent.  The Paying Agent shall, as to any tendered 2008A Bonds which have not been delivered to it ("Undelivered 2008A Bonds"), place a stop transfer against such 2008A Bonds until they are delivered to the Paying Agent.  Upon such delivery, the Paying Agent shall make any necessary adjustments to the Bond Register.  The Paying Agent shall hold moneys representing the purchase price of Undelivered 2008A Bonds in one or more separate accounts or subaccounts for the sole benefit of the former Owner(s) of such Undelivered 2008A Bonds.
 
Section 2B.4.   Mandatory Tender and Purchase Upon Provision or Termination of Letter of Credit Facility .
 
(a)   Mandatory Tender and Purchase .  In the event the Trustee receives written notice from the Bank stating that an event of default has occurred under the Reimbursement Agreement, the 2008A Bonds shall be subject to mandatory tender and purchase on the effective date of the new Letter of Credit Facility or the termination of the existing Letter of Credit Facility (as applicable).
 
(b)   Notice to Registered Owners .  Upon receipt of written notice from the Company of the action to be undertaken, the Paying Agent shall promptly give notice of mandatory tender for purchase pursuant to this Section by first-class mail to the Owners of all 2008A Bonds at least 30 days prior to the effective date of the new Letter of Credit Facility or the termination of the existing Letter of Credit Facility (as applicable).  Such notice shall state that all Outstanding 2008A Bonds are subject to mandatory tender for purchase pursuant to the provisions thereof and of this Section in anticipation of the provision of a Letter of Credit Facility or the termination of the existing Letter of Credit Facility securing the 2008A Bonds (as applicable) and will be purchased on the mandatory tender date (which date shall be set forth in such notice) by payment of a purchase price equal to the principal amount thereof plus accrued interest (if any).
 
(c)   Remarketing .  The Remarketing Agent shall use its reasonable best efforts to find purchasers for and arrange for the sale on the respective Purchase Date of all 2008A Bonds subject to mandatory tender for purchase pursuant to Section 2B.4(a) at a price equal to 100% of the principal amount thereof plus accrued interest thereon (if any), provided that (i) no 2008A Bonds shall be remarketed by the Remarketing Agent to the Company or an Affiliate or to the Issuer or an affiliate of the Issuer, and (ii) the Letter of Credit Facility coverage requirements of this Indenture shall be satisfied.  The terms of any sale arranged by the Remarketing Agent shall provide for the payment of the Purchase Price to the Paying Agent of the 2008A Bonds in immediately available funds at or before 11:00 a.m. on the Purchase Date.
 
(d)   Certain Notices by Remarketing Agent .  The Remarketing Agent shall give the following notices:
 
(1)   Notice by Remarketing Agent of Remarketed 2008A Bonds .  At or before 3:00 p.m. on the third Business Day immediately preceding the Purchase Date for purchase of 2008A Bonds pursuant to Section 2B.4(a), the Remarketing Agent shall give notice by telephone, telegram, telecopy, telex or other similar communication to the Paying Agent, the Company and the Bank of (i) the principal amount of 2008A Bonds which have been remarketed and (ii) the principal amount of 2008A Bonds, if any, which have not been remarketed.
 
(2)   Notice by Paying Agent of 2008A Bonds Not Remarketed .  Not later than 5:00 p.m. on the date of receipt of any notice pursuant to Section 2B.4(d) informing the Paying Agent that 2008A Bonds have not been remarketed, the Paying Agent shall give notice by telephone, telegram, telecopy or other similar communication to the Company and the Bank, specifying the principal amount of 2008A Bonds as to which the Remarketing Agent has not found a purchaser at that time.
 
(3)   Remarketing Agent Notice of Amounts to be Drawn Under Letter of Credit Facility .  Prior to 10:00 a.m. on the second Business Day immediately preceding the Purchase Date for purchase of tendered 2008A Bonds pursuant to Section 2B.4(a), the Remarketing Agent shall give telephonic notice, promptly confirmed in writing, to the Paying Agent, the Company and the Bank specifying the amounts of principal and interest, if any, representing the purchase price of such 2008A Bonds, which the Remarketing Agent does not hold, for the benefit of the persons entitled to receive such purchase price, at the time such notice is given.  In the absence of such notice, the Paying Agent and the Company shall be deemed to have received notice from the Remarketing Agent specifying that no portion of the purchase price of such 2008A Bonds is held by the Remarketing Agent.
 
(4)   At or before 12:00 noon on the Business Day prior to the Purchase Date for the purchase of 2008A Bonds pursuant to Section 2B.4(a), the Remarketing Agent shall give notice to the Paying Agent by telephone (promptly confirmed in writing) of the names, addresses and taxpayer identification numbers of the purchasers and the denominations of 2008A Bonds to be delivered to each purchaser and the payment instructions for regularly scheduled interest payments.
 
(e)   Payment of Remarketing Proceeds .  The Remarketing Agent shall cause to be paid to the Paying Agent by 11:00 a.m. on the Purchase Date for purchase of 2008A Bonds pursuant to Section 2B.4(a) all amounts then held by the Remarketing Agent representing proceeds of the remarketing of such 2008A Bonds, such payment to be made in immediately available funds.  All such remarketing proceeds received by the Paying Agent shall be deposited in the Remarketing Proceeds Purchase Account and applied by the Paying Agent pursuant to this Article.
 
(f)   Drawings on Letter of Credit Facility for Purchase Price .  If a Letter of Credit Facility is then in effect with respect to the 2008A Bonds, following receipt by the Paying Agent of the notice described in Section 2B.4(d)(3), the Paying Agent shall in accordance with Section 2B.5(a) draw on the Letter of Credit Facility on the Purchase Date with respect to the 2008A Bonds subject to mandatory tender before 11:00 a.m. on the Purchase Date, for receipt by the Paying Agent on such day for the purchase of 2008A Bonds pursuant to this Section, an amount equal to the amount stated in such notice as not being held by the Remarketing Agent (except to the extent any such amounts are then held by the Paying Agent) constituting the mandatory tender purchase price of such 2008A Bonds.  In the absence of such notice, the Paying Agent and the Company shall be deemed to have received notice from the Remarketing Agent specifying that no portion of the purchase price of such 2008A Bonds is held by the Remarketing Agent.  The proceeds of such drawing shall be deposited into the Letter of Credit Purchase Account for use to the extent necessary to effect the purchase of 2008A Bonds subject to mandatory tender.
 
(g)   Use of Funds in the Company Debt Service Account for Purchase Price .  If sufficient funds for the payment of the purchase price of tendered 2008A Bonds are not provided by draws on the Letter of Credit by 3:00pm, New York City time, on the Purchase Date, then the Paying Agent shall draw funds from the Company Debt Service Account to the extent necessary to pay the purchase price of such tendered 2008A Bonds in full.
 
(h)   Payments of Purchase Price by Paying Agent .  The Paying Agent shall pay the purchase price of 2008A Bonds tendered for purchase pursuant to this Section to the selling Owners thereof at its Payment Office not later than 5:00 p.m. on the later of (i) the Purchase Date for the purchase of such 2008A Bonds or (ii) the date of surrender of such 2008A Bonds to the Paying Agent properly endorsed for transfer in blank and with all signatures guaranteed to the satisfaction of the Paying Agent.  Such payments shall be made in immediately available funds, but solely from the following sources in the order of priority indicated, neither the Issuer, the Trustee nor the Paying Agent having an obligation to use funds from any other source:
 
(1)   moneys in the Remarketing Proceeds Purchase Account representing proceeds of the remarketing of the 2008A Bonds pursuant to Section 2B.4(c), which shall be applied as provided in Section 2B.4(e);
 
(2)   moneys in the Letter of Credit Purchase Account representing proceeds of a drawing by the Paying Agent under the Letter of Credit Facility with respect to tendered 2008A Bonds, which shall be applied as provided pursuant to Section 2B.4(f); and
 
(3)   moneys in the Company Debt Service Account.
 
(i)   Registration and Delivery of Tendered or Purchased 2008A Bonds .  On the Purchase Date for the purchase of 2008A Bonds pursuant to this Section, the Paying Agent shall register and make available all 2008A Bonds purchased on such date as follows:
 
(1)   2008A Bonds remarketed by the Remarketing Agent shall be registered and made available to the Remarketing Agent or the purchaser thereof (by overnight mail or similar service) in accordance with the written instructions of the Remarketing Agent; and
 
(2)   2008A Bonds purchased with proceeds of a drawing on the Letter of Credit Facility for which the Bank has not been reimbursed shall be Pledged Bonds and shall be pledged and assigned to the Bank in accordance with the Reimbursement Agreement.
 
(j)   Delivery of 2008A Bonds: Effect of Failure to Surrender 2008A Bonds .  All 2008A Bonds to be purchased on the mandatory purchase date shall be delivered to the Payment Office of the Paying Agent for receipt at or before 11:00 a.m. on such date.  If the Owner of any 2008A Bond that is subject to purchase pursuant to this Section fails to deliver such 2008A Bond to the Paying Agent for purchase on the Purchase Date, and if the Paying Agent is in receipt of the purchase price therefor, such 2008A Bond shall nevertheless be deemed tendered and purchased on the Purchase Date fixed for the purchase thereof and registration of the ownership of such 2008A Bond shall be transferred to the purchaser thereof as provided in Section 2B.4(i).  Any Owner who so fails to deliver such 2008A Bond for purchase on (or before) the Purchase Date (1) shall have no further rights thereunder, except the right to receive the purchase price thereof upon presentation and surrender of such 2008A Bond to the Paying Agent properly endorsed for transfer in blank and with all signatures guaranteed to the satisfaction of the Paying Agent and (2) shall thereafter hold such 2008A Bond as agent for the Paying Agent.  The Paying Agent shall, as to any tendered 2008A Bonds which have not been delivered to it ("Undelivered 2008A Bonds"), place a stop transfer against such 2008A Bonds until they are delivered to the Paying Agent.  Upon such delivery, the Paying Agent shall make any necessary adjustments to the Bond Register.  The Paying Agent shall hold moneys representing the purchase price of Undelivered 2008A Bonds in one or more separate accounts or subaccounts for the sole benefit of the former Owner(s) of such Undelivered 2008A Bonds.
 
Section 2B.5.   Drawings on Letter of Credit Facility: 2008A Bonds Purchased with Proceeds of Letter of Credit Facility .
 
The following provisions shall apply if a Letter of Credit Facility is in effect:
 
(a)   Drawings on the Letter of Credit Facility .  Before 11:00 a.m. on each Purchase Date described in Sections 2B.1, 2B.2, 2B.3 and 2B.4 hereof, the Paying Agent shall present the requisite draft and certificate for a drawing on the Letter of Credit Facility securing the 2008A Bonds that are subject to optional or mandatory tender, if any, then held by the Paying Agent, such drawing to include interest on such tendered 2008A Bonds to the Purchase Date so as to receive the proceeds of such drawing at or before 3:00 p.m. on such day, to pay principal of, premium, if any, on (but only to the extent such Letter of Credit Facility permits application to such premium) and interest on the 2008A Bonds to be purchased on such Purchase Date pursuant to Sections 2B.1, 2B.2, 2B.3 and 2B.4 hereof as to which the Remarketing Agent has given notice are not remarketed and to be purchased on such Purchase Date.  By 5:00 p.m. on each date it presents the requisite documents for a drawing on the Letter of Credit Facility securing the tendered 2008A Bonds, the Paying Agent shall give notice to the Company by telephone, promptly confirmed in writing, of the amount so drawn.
 
(b)   Pledged Bonds .  Any 2008A Bonds purchased with proceeds of a drawing on the Letter of Credit Facility pursuant to this Article shall be pledged and assigned to the Bank in accordance with the Reimbursement Agreement.
 
(c)   Remarketing of Pledged Bonds .  Subject to the limitations of Sections 2B.1(d), 2B.2(b) 2B.3(c) and (d) and 2B.4(c), the Remarketing Agent shall continue to use its best efforts to arrange for the sale of any Pledged Bonds, subject to the reinstatement of the Letter of Credit Facility with respect to the drawings with which such 2008A Bonds were purchased, at a price equal to the principal amount thereof plus accrued interest (if any).
 
(d)   Notice of Remarketing .  On or prior to each Business Day on which any Pledged Bonds that are successfully remarketed by the Remarketing Agent are to be purchased, the Remarketing Agent shall give telephonic notice, promptly confirmed in writing, to the Paying Agent, the Company and the Bank specifying:
 
(1)   the Business Day on which such purchase will take place and the principal amount of Pledged Bonds successfully remarketed by the Remarketing Agent, and
 
(2)   to the Paying Agent only, the names, addresses and tax identification numbers of the proposed purchasers thereof, the denominations of 2008A Bonds to be delivered to each purchaser and, if available, the payment instructions for regularly scheduled interest payments.
 
(e)   Delivery of Remarketed Pledged Bonds and Proceeds Thereof.   Upon receipt of Bank’s written confirmation of reinstatement of the Letter of Credit Facility relating to Pledged Bonds as described in Section (b) and the sale of Pledged Bonds arranged by the Remarketing Agent, the Paying Agent shall make available (i) such 2008A Bonds to the Remarketing Agent for redelivery to the purchasers thereof and (ii) the proceeds of such sale to the Bank to the extent of any unpaid obligation under the Letter of Credit Facility for the prior drawing made by the Paying Agent on the Letter of Credit Facility in respect of the purchase of such 2008A Bonds.
 
Section 2B.6.   [Reserved ].
 
Section 2B.7.   No Tenders in Certain Circumstances .
 
Anything in this Indenture to the contrary notwithstanding, there shall be no optional or mandatory tenders of 2008A Bonds pursuant to this Article if there shall have occurred any Event of Default in respect of which the principal of all Outstanding 2008A Bonds shall have been declared immediately due and payable pursuant to Section 7.2 and such declaration shall not have been annulled, stayed or otherwise suspended.
 
Section 2B.8.   Inadequate Funds for Tenders .
 
If the funds available for purchases of 2008A Bonds pursuant to this Article are inadequate for the purchase of all 2008A Bonds tendered on any purchase date pursuant to this Article, the Paying Agent shall, after any applicable grace period:  (a) return all tendered 2008A Bonds to the Owners thereof, (b) return all moneys received for the purchase of such 2008A Bonds (other than moneys provided by the Company and other than Letter of Credit Facility proceeds, unless the Letter of Credit Facility is reinstated with respect thereto) to the persons providing such moneys; and (c) notify the Trustee of the return of such 2008A Bonds and moneys and the failure to make payment for tendered 2008A Bonds.
 
ARTICLE IIC
LETTER OF CREDIT AND LETTER OF CREDIT FACILITY

Section 2C.1.   Letter of Credit .
 
(a)           The 2008A Bonds initially are covered by the Initial Letter of Credit issued by the Initial LOC Bank which also constitutes the Letter of Credit Facility.  The Letter of Credit shall be an irrevocable obligation of the Bank to pay to the Paying Agent, upon request made with respect to the 2008A Bonds and in accordance with the terms thereof, (i) amounts sufficient to pay the principal and interest due on the 2008A Bonds in accordance with this Indenture; and (ii) up to (x) an amount equal to the aggregate principal amount of the Outstanding 2008A Bonds sufficient to pay the principal portion of the purchase price of 2008A Bonds tendered for purchase pursuant to this Indenture to the extent remarketing proceeds are not available for such purpose, plus (y) an amount equal to 47 days' accrued interest on the 2008A Bonds at a maximum rate of 12% per annum (based on a 365-day year) while the 2008A Bonds are in the Daily Mode, the Weekly Mode or the Monthly Mode (or 193 days' accrued interest at a rate equal to the actual Term Rate as the same shall be fixed immediately prior to the Conversion Date (based on a 360-day year) while the 2008A Bonds are in a Term Mode) to pay the accrued interest portion of the purchase price of the 2008A Bonds tendered for purchase pursuant to this Indenture to the extent remarketing proceeds are not available for such purpose.  The Paying Agent will not be entitled to draw on the Letter of Credit with respect to Pledged Bonds unless the Letter of Credit so provides.  Each original Letter of Credit shall provide that the Bank's obligation under such Letter of Credit will be reduced to the extent of any drawing thereunder, subject to reinstatement as described therein.
 
Section 2C.2.   Drawings on Letter of Credit and Letter of Credit Facility .
 
The Paying Agent shall draw moneys under the Letter of Credit in accordance with the terms thereof to the extent necessary to make timely payments of principal and interest on the 2008A Bonds.  The proceeds of such drawings shall be deposited in the Debt Service Fund in accordance with Section 3.2 hereof.  The Paying Agent shall draw moneys under the Letter of Credit Facility to make timely payments of the purchase price required to be made pursuant to, and in accordance with, Article IIB.  The proceeds of such drawings shall be deposited in the Letter of Credit Purchase Account.
 
Section 2C.3.   Reduction .
 
In each case that 2008A Bonds are redeemed or deemed to have been paid pursuant to Section 10.1, the Paying Agent shall take such action as may be permitted under the Letter of Credit Facility to reduce the amount available thereunder (a) while the 2008A Bonds are in the Daily Mode, Weekly Mode or Monthly Mode to an amount equal to the principal amount of the Outstanding 2008A Bonds, plus 47 days' interest on such principal amount computed at 12% per annum based on a 365-day year, and (b) while the 2008A Bonds are in a Term Mode, to an amount equal to the principal amount of the Outstanding 2008A Bonds, plus 193 days' interest thereon computed at the actual Term Rate then in effect, based on a 360-day year.
 
Section 2C.4.   Expiration .
 
Unless all of the conditions of Section 2C.6 or Section 2C.7 have been met by the times specified therein prior to the expiration of a Letter of Credit Facility, the Paying Agent shall take all action necessary to call the 2008A Bonds secured by such Letter of Credit Facility for mandatory tender for purchase pursuant to Section 2B.3, by reason of the expiration of the Letter of Credit Facility, on the Interest Payment Date preceding such expiration date but not less than five days before such expiration date.  Notice of the expiration of a Letter of Credit Facility shall be given by the Paying Agent to the Rating Service and to the Issuer.
 
Section 2C.5.  [Reserved.]
 
Section 2C.6.   Extension .
 
The Company may arrange to extend the term of a Letter of Credit Facility, provided that the extended Letter of Credit Facility shall meet the requirements of Sections 2A.5 and 2B.2(c) above, as applicable.  The Company shall give the Paying Agent and the Trustee and the Issuer written notice of such extension no later than 45 days preceding the Interest Payment Date immediately preceding the expiration date of the Letter of Credit Facility, and shall cause the Bank's written amendment effecting such extension to be delivered to the Paying Agent no later than 20 days immediately preceding the Interest Payment Date next preceding the expiration date of the existing Letter of Credit Facility.  Nothing herein shall imply that the Bank is under any obligation to grant any such extension.
 
Section 2C.7.   Replacement with Alternate Credit Facility .
 
(a)           Upon satisfaction of the conditions set forth in this Section, the Company may, at the close of business on any Interest Payment Date or, if the 2008A Bonds are in a Monthly Mode or a Term Mode, on any Conversion Date   prior to the expiration of a Letter of Credit Facility, replace such Letter of Credit Facility with an Alternate Credit Facility which shall have terms which are the same in all material respects (except as to Expiration Date and except any changes pursuant to this Indenture with respect to interest or premium coverage in connection with a concurrent interest rate reset or conversion) as the current Letter of Credit, which shall have an Expiration Date that is not less than one year from the date of its delivery and not sooner than the Expiration Date of the current Letter of Credit then in effect.
 
(b)           Prior to the replacement of any Letter of Credit Facility, the following conditions shall have been met:
 
(1)   The Trustee and the Paying Agent and the Issuer shall have received from the Company written notice of such replacement and the effective date thereof no later than 45 days (or such shorter time as may be agreed to by the Company, the Trustee, the Paying Agent and the Remarketing Agent) preceding such replacement date;
 
(2)   The Trustee and the Paying Agent and the Issuer shall have received the following no later than 25 days preceding the effective date of such replacement:
 
(i)   An opinion of Counsel for the issuer of the Alternate Credit Facility (which opinion is to be delivered upon the issuance of the Alternate Credit Facility) that such Alternate Credit Facility constitutes a legal, valid and binding obligation of the issuer in accordance with its terms;
 
(ii)   A Favorable Opinion of Bond Counsel with respect to such replacement; and
 
(iii)   Written confirmation from the issuer of the Alternate Credit Facility that it will deliver the original Alternate Credit Facility no later than the effective date of such replacement;
 
(3)   The Paying Agent shall have received the original replacement Letter of Credit Facility no later than the effective date of such replacement;
 
(4)   The requirements of Section 2B.3 above as to mandatory tender for purchase of 2008A Bonds secured by the Letter of Credit Facility being replaced shall have been met; and
 
(5)   The issuer of the Alternate Credit Facility shall have agreed to purchase, and shall purchase on or before the replacement date, from the Bank which issued the Letter of Credit Facility being replaced any 2008A Bonds that are Pledged Bonds at a price equal to the principal amount thereof plus accrued unpaid interest thereon (if any) at the Bank Rate.
 
(c)           Upon receipt by the Paying Agent of the Alternate Credit Facility and satisfaction of all other conditions set forth in Section 2C.7(b)(2), the Paying Agent shall immediately notify the issuer of the Letter of Credit Facility being replaced that such Letter of Credit Facility will be replaced by an Alternate Credit Facility.  On the effective date of the replacement of the Letter of Credit Facility, the replaced Letter of Credit Facility shall be promptly surrendered to the issuer thereof for cancellation, provided, however, that the replaced Letter of Credit Facility shall not be surrendered until all draws thereunder shall have been honored and the replacement Alternate Credit Facility shall have been delivered.
 
Section 2C.8.   Notices of Extension or Replacement .
 
(a)   The Paying Agent shall, at least 20 days prior to the proposed replacement of a Letter of Credit Facility with an Alternate Credit Facility pursuant to Section 2C.7, give notice thereof to the Owners of the 2008A Bonds by mailing notice to the Owners of such 2008A Bonds.
 
(b)   The Paying Agent shall, within 30 days after the extension of the term of a Letter of Credit Facility pursuant to Section 2C.6, give notice thereof by mailing written notice to the Owners of the 2008A Bonds secured by such Letter of Credit Facility.
 
(c)   The Paying Agent shall promptly give notice of any proposed extension or replacement of a Letter of Credit Facility to the Issuer, the Trustee and the Remarketing Agent and to the Rating Service.
 
Section 2C.9.   Other Liquidity\Credit Enhancement:  No Liquidity Enhancement .
 
Nothing in this Article IIC shall limit the Company's right to provide other liquidity or credit enhancement (such as a Letter of Credit Facility or a Letter of Credit Facility not meeting the requirements of Section 2C.7) or no liquidity enhancement for the 2008A Bonds if the 2008A Bonds are converted  to a Term Mode for a Term Rate Period, the last day of which is the maturity date of the 2008A Bonds; provided that (a) any such liquidity enhancement shall have administrative provisions reasonably satisfactory to the Trustee and the Paying Agent, and the Company shall have furnished to the Trustee and the Paying Agent a Favorable Opinion of Bond Counsel with respect thereto, (b) the Company may not terminate a Letter of Credit Facility and elect to provide liquidity for the 2008A Bonds itself unless the Bank has consented in writing thereto and the Company shall have furnished to the Trustee and the Paying Agent a Favorable Opinion of Bond Counsel with respect thereto, and (c) in the event the Company elects to terminate the existing Letter of Credit Facility without providing an Alternate Credit Facility, the Company shall purchase, on or before the termination date of the existing Letter of Credit Facility, any 2008A Bonds that are Pledged Bonds at a price equal to the principal amount thereof plus accrued unpaid interest thereon (if any) at the rate determined in accordance with the reimbursement agreement.
 
ARTICLE IID
THE REMARKETING AGENT

Section 2D.1.   Appointment .
 
The Issuer hereby appoints PNC Capital Markets, Inc. as Remarketing Agent under this Indenture.  The Remarketing Agent and any successor Remarketing Agent, by written instrument delivered to the Issuer, the Trustee, the Bank, the Paying Agent and the Company, shall accept the duties and obligations imposed on it under this Indenture.
 
Section 2D.2.   Duties .
 
In addition to the other obligations imposed on the Remarketing Agent hereunder, the Remarketing Agent shall agree to:
 
(1)   hold all 2008A Bonds delivered to it by the Paying Agent hereunder for delivery to the Owners thereof,
 
(2)   hold all moneys representing the purchase price of 2008A Bonds for delivery to the Paying Agent pursuant hereto for the benefit of the persons entitled to receive the payment of such purchase price; and
 
(3)   keep such books and records as shall be consistent with prudent industry practice and make such books and records available for inspection by the Issuer, the Trustee, the Paying Agent, the Company and the Bank at all reasonable times.
 
Section 2D.3.   Qualification .
 
The Remarketing Agent shall at all times be registered as a Municipal Securities Dealer under the Securities Exchange Act of 1934, as amended, and authorized by law to perform its obligations hereunder.
 
Section 2D.4.   Resignation; Removal .
 
If at any time the Remarketing Agent is unable or unwilling to act as Remarketing Agent, the Remarketing Agent, upon 60 days' prior written notice to the Issuer, the Trustee, the Paying Agent, the Bank and the Company, may resign.  The Remarketing Agent may be removed at any time by the Issuer, upon the direction of the Company, upon 60 days’ written notice signed by the Issuer and the Company delivered to the Trustee, the Paying Agent, the Remarketing Agent and the Bank; provided that, if the Issuer fails to deliver such notice within 10 days of the date the Company delivers to the Issuer a written direction to do so (with copies to the Remarketing Agent, the Trustee, the Paying Agent and the Bank), then such written notice may be signed and delivered by the Company on its own behalf and as agent for the Issuer.  Upon resignation or removal of the Remarketing Agent, the Company, shall appoint a successor Remarketing Agent meeting the qualifications of Section 2D.3 and reasonably satisfactory to the Bank and the Issuer hereby acknowledges and consents to such appointment.  Upon the resignation or removal of the Remarketing Agent, the Remarketing Agent shall pay over, assign and deliver any moneys and 2008A Bonds held by it pursuant to Section 2D.2 above to its successor.  In the event that the Company shall fail to appoint a successor Remarketing Agent, upon the resignation or removal of the Remarketing Agent or upon its dissolution, insolvency or bankruptcy, the Issuer shall promptly appoint a successor Remarketing Agent.  Notwithstanding anything contained herein to the contrary, the Remarketing Agent shall not resign or be removed unless and until a successor Remarketing Agent shall have been appointed and the successor Remarketing Agent shall have accepted such appointment.
 
Section 2D.5.   Notices .
 
The Trustee shall, within 30 days of the resignation or removal of the Remarketing Agent or the appointment of a successor Remarketing Agent of which it has received notice, give notice thereof by mail to the Company, the Bank, to each Owner and to the Rating Service.
 
Section 2D.6.   Effect of Defeasance .
 
Notwithstanding anything stated to the contrary in this Article or in Article X, no defeasance under Article X shall relieve the Remarketing Agent of any of its duties or obligations imposed under this Indenture or under the Remarketing Agreement.
 
ARTICLE III                                
 
DEBT SERVICE FUND
 
Section 3.1.   Establishment of Funds and Accounts .
 
The Trustee hereby establishes at the direction of the Issuer trust funds designated the Debt Service Fund, within which there is hereby established a Company Debt Service Account and a Letter of Credit Debt Service Account for the benefit of the Bondholders and which must be Eligible Accounts.
 
Section 3.2.   Debt Service Fund .
 
(a)   The Trustee shall maintain the Debt Service Fund as follows:
 
(i)           The Trustee shall deposit into the Company Debt Service Account all Installment Loan Payments and all other amounts received by the Trustee from the Company or for the account of the Company pursuant to Section 5.4 of the Loan Agreement, and all payments under and pursuant to the provisions of this Indenture or any of the provisions of the Loan Agreement, when accompanied by written directions from the Person depositing such moneys that such moneys are to be paid into the Debt Service Fund.
 
(ii)           The Trustee shall deposit into the Letter of Credit Debt Service Account all moneys received by the Trustee from drawings under the Letter of Credit to pay principal of, premium, if any and interest on the 2008A Bonds.
 
(iii)           Moneys in the Letter of Credit Debt Service Account shall be applied to the payment when due of principal, premium, if any, and interest on the 2008A Bonds prior to the payment of any moneys under subsection 3.2(a)(iv).
 
(iv)           Moneys in the Company Debt Service Account shall be applied to the following in the order of priority indicated:
 
(A)           if the Bank has honored in full a draw under the Letter of Credit, to the reimbursement of the Bank when due in accordance with the Reimbursement Agreement for moneys drawn under the Letter of Credit and deposited in the Letter of Credit Debt Service Account for payment of principal of, premium, if any, on and interest on the 2008A Bonds; and
 
(B)           when insufficient moneys have been received under the Letter of Credit for application pursuant to subsection 3.2(a)(iii), to the payment when due of principal of, premium, if any, on and interest on the 2008A Bonds
 
(b)           Before 12:00 noon, New York City time, on the Business Day immediately preceding each Interest Payment Date, each redemption date, the payment date upon acceleration and the Maturity Date of the 2008A Bonds, the Trustee shall present the requisite certificate for a drawing on the Letter of Credit so as to comply with the provisions of the Letter of Credit for payment to be made in sufficient time for the Trustee to receive the proceeds of such drawing at or before 1:00 p.m., New York City time, on such Interest Payment Date, redemption date or Maturity Date, as the case may be, to pay principal of, premium, if any, and interest on the 2008A Bonds due on such date.  In addition, the Trustee shall draw on the Letter of Credit pursuant to its terms in accordance with and in order to satisfy the requirements of Section 7.[__].  Promptly upon presenting the requisite documents for a drawing on the Letter of Credit, the Trustee shall give notice to the Company by telephone, promptly confirmed in writing, of the amount so drawn.  The Trustee shall promptly notify the Company by oral or telephonic communication confirmed in writing if the Bank fails to transfer funds in accordance with the Letter of Credit upon the presentment of the requisite certificate.  In calculating the amount to be drawn on the Letter of Credit for the payment of principal of, premium, if any, and interest on the 2008A Bonds, whether on an Interest Payment Date, on a Maturity Date or upon redemption or acceleration, the Trustee shall not take into account the potential receipt of funds from the Company under the Loan Agreement on such Interest Payment Date, Maturity Date, redemption date or date of acceleration or the existence of any other moneys in the Debt Service Fund, but shall draw on the Letter of Credit for the full amount of principal of, premium, if any, and interest coming due on the 2008A Bonds.  If sufficient funds for the payment of principal of, premium, if any, and interest on the 2008A Bonds are not provided by draws on the Letter of Credit, by 1:00 p.m., New York City time, or such Interest Payment Date, redemption date or Maturity Date, as the case may be, then the Paying Agent shall draw funds from the Company Debt Service Account to the extent necessary to make such payments in full.
 
Section 3.3.   [Reserved.]
 
Section 3.4.   [Reserved.]
 
Section 3.5.   Debt Service Fund Moneys to be Held for All Registered Owners, With Certain Exceptions .
 
Until applied as herein provided, moneys and investments held in the Debt Service Fund shall be held in trust for the benefit of the Registered Owners of all Outstanding 2008A Bonds, except that on and after the date on which the interest on or principal or redemption price of any particular 2008A Bond or 2008A Bonds is due and payable from the Debt Service Fund, the unexpended balance of the amount deposited or reserved in such fund for the making of such payments shall, to the extent necessary therefor, be held for the benefit of the Registered Owner or Registered Owners entitled thereto.
 
Section 3.6.   Additional Accounts and Subaccounts .
 
At the written request of the Company, the Trustee shall establish and maintain additional accounts or subaccounts within the Debt Service Fund as the Company may reasonably request; provided that (a) in each  case, the written request of the Company shall set forth in reasonable detail the sources of deposits into and disbursements from the account or subaccount to be established, and (b) in each case, the sources of deposits into and disbursements from the account or subaccount to be established shall be limited to the sources of deposits permitted or required to be made into and the disbursements permitted or required to be made from the fund or account within which it is to be established.
 
ARTICLE IV                                
 
INVESTMENTS, TAX COVENANTS
 
Section 4.1.   Investment of Funds .
 
Except as otherwise provided herein, pending disbursement of the amounts on deposit in the Debt Service Fund (other than any moneys held by the Trustee to pay the principal of, premium, if any, or interest which has previously become payable with respect to the 2008A Bonds which shall only be invested as provided below in the next succeeding paragraph) as provided herein, the Trustee is hereby directed to invest and reinvest such amounts in Investment Securities promptly upon receipt of, and, subject to the limitations set forth in this Article, in accordance with the written instructions of the Company.  In the event no such instructions are received by the Trustee, such amounts shall be invested in Investment Securities described in clause (g) of the definition thereof, pending receipt of such investment instructions.  All such investments, as well as the investments described in the next succeeding paragraph, shall be credited to the fund (and account and subaccount therein) from which the money used to acquire such investments shall have come, and all income and profits on such investments shall be credited to, and all losses thereon shall be charged against, such fund (and account and subaccount therein).  As amounts invested are needed for disbursement from the Debt Service Fund, the Trustee shall cause a sufficient amount of the investments credited to that fund to be redeemed or sold and converted into cash to the credit of that fund (and account and subaccount therein).  The Trustee shall not be liable or responsible for any loss resulting from any such investment or reinvestment or redemption or sale as herein authorized; except that the Trustee shall be liable for any loss resulting from its willful or grossly negligent failure, within a reasonable time after  receiving the direction from the Company to make any investment or reinvestment in the manner provided for herein at the Company’s direction.  If the Trustee is unable, after reasonable effort and within a reasonable time, to make any such investment or reinvestment, it shall so notify the Company in writing and thereafter the Trustee shall be relieved of all responsibility with respect thereto.  The Trustee may make any and all such investments through its own investment department or that of its affiliates or subsidiaries.
 
Notwithstanding anything to the contrary contained herein: (1) any moneys held by the Trustee to pay the principal of, premium, if any, or interest which has previously become payable with respect to the 2008A Bonds shall only be invested by the Trustee overnight in United States Government Obligations or other Investment Securities rated AAA or Aaa by each Rating Agency then rating the 2008A Bonds as directed in writing by the Company; and (2) moneys deposited in the Letter of Credit Purchase Account or the Remarketing Proceeds Purchase Account shall not be invested but shall be held uninvested without the Trustee or the Paying Agent having any liability for interest in their respective accounts pending application.
 
The Company by its execution of the Loan Agreement covenants to restrict the investment of money in the funds created under this Indenture in such manner and to such extent, if any, as may be necessary, after taking into account reasonable expectations at the time the 2008A Bonds are delivered to their original purchaser, so that the 2008A Bonds will not constitute arbitrage 2008A Bonds under Section 148 of the Code and the Regulations, and the Trustee hereby agrees to comply with the Company’s written instructions with respect to the investment of money in the funds created under this Indenture so long as such instructions conform to the requirements of the Indenture.
 
Notwithstanding the foregoing, the Company will not direct the Trustee to make investments under this Indenture that conflict with or exceed the limitations set forth in the Tax Documents.  The Trustee shall have no responsibility with respect to the compliance by the Company or the Issuer with respect to any covenant herein regarding investments made in accordance with this Article, other than to use its best reasonable efforts to comply with instructions from the Company regarding such investments.  Since the investments permitted by this Section have been included at the request of the Company and the making of such investments will be subject to the Company’s written direction, the Issuer and the Trustee specifically disclaim and shall not have any obligation to the Company for any loss arising from, or tax consequences of, investments pursuant to the provisions of this Section.  Confirmations are not required from the Trustee for permitted investments included in a monthly statement rendered by the Trustee, and no statement need be rendered by the Trustee for any fund or account if no investment or income accrual activity occurred in such fund or account during such month.
 
Section 4.2.   Arbitrage Bond Covenant .
 
With respect to the authority to invest funds granted in this Indenture, the Issuer hereby covenants with the Bondholders that, subject to the Company’s direction of the investment of funds, it will make no use of the proceeds of the 2008A Bonds, or any other funds which may be deemed to be proceeds of the 2008A Bonds pursuant to Section 148 of the Code, which would cause the 2008A Bonds to be "arbitrage bonds" within the meaning of such Section.
 
The Trustee shall provide such information as the Company may reasonably request in writing to enable the Company to calculate the amount of earnings on the moneys held under this Indenture.
 
Section 4.3.   Covenants Regarding Tax Exemption .
 
The Issuer covenants to refrain from any action which would adversely affect, or to take such action as is reasonable and available and within its control to assure, the treatment of the 2008A Bonds as obligations described in Section 103(a) of the Code, the interest on which is not included in the "gross income" of the holder (other than the income of a "substantial user" of the Project Facilities or a "related person" within the meaning of Section 147(a) of the Code) for purposes of federal income taxation.
 
ARTICLE V                                
 
REDEMPTION OF 2008A BONDS
 
Section 5.1.   2008A Bonds Subject to Redemption; Selection of 2008A Bonds for Redemption .
 
The 2008A Bonds are subject to redemption prior to maturity as provided below and in the form of 2008A Bonds attached hereto as Exhibit A.  Except as otherwise provided herein or in the 2008A Bonds, if less than all the 2008A Bonds are to be redeemed, the particular 2008A Bonds to be called for redemption shall be selected by lot or by such other method as the Paying Agent deems fair and appropriate; provided that any Pledged Bonds shall be redeemed first.  The Paying Agent shall treat any 2008A Bond while in the Daily Mode, the Weekly Mode or the Monthly Mode of a denomination greater than $100,000 as representing that number of separate 2008A Bonds each of the denomination of $5,000 as can be obtained by dividing the actual principal amount of such 2008A Bond by $5,000, but not in any event in a denomination smaller than $100,000.  While the 2008A Bonds are in a Term Mode, the Paying Agent shall treat any 2008A Bond of a denomination greater than $5,000 as representing that number of separate 2008A Bonds each of the denomination of $5,000 as can be obtained by dividing the actual principal amount of such 2008A Bond by $5,000.  The Issuer, at the direction of the Company, shall direct the Paying Agent to call 2008A Bonds for optional redemption when and only when and to the extent that (a) the Company has itself notified the Trustee and the Paying Agent of a corresponding prepayment made or proposed to be made under the Loan Agreement or (b) there are otherwise sufficient moneys in the Debt Service Fund to redeem the 2008A Bonds pursuant to Article X.  Notice of any optional redemption shall specify the principal amount of 2008A Bonds to be redeemed and the redemption date.  The Issuer shall furnish the Company with a copy of the direction to the Paying Agent.
 
Section 5.2.   Notice of Redemption .
 
(a)   When required to redeem 2008A Bonds under any provision of this Indenture, or when directed to do so by the Issuer at the direction of the Company except in the case of redemption of Pledged Bonds as provided in Section 5.8, the Paying Agent shall cause notice of the redemption to be given not more than 60 days and not less than 15 days prior to the redemption date by mailing copies of such notice of redemption by first-class mail, postage prepaid, to all Owners of 2008A Bonds to be redeemed at their registered addresses and also to the Rating Service, and to The Bond Buyer , or their respective successors, if any, but failure to mail any such notice or defect in the mailing thereof in respect of any 2008A Bond shall not affect the validity of the redemption of any other 2008A Bond with respect to which notice was properly given.  Each such notice shall be dated and shall be given in the name of the Issuer and shall state the following information:
 
(1)   the identification numbers, as established under the Indenture, and the CUSIP numbers, if any, of the 2008A Bonds being redeemed, provided that any such notice shall state that no representation is made as to the correctness of CUSIP numbers either as printed on such 2008A Bonds or as contained in the notice of redemption and that reliance may be placed only on the identification numbers contained in the notice or printed on such 2008A Bonds;
 
(2)   any other descriptive information needed to identify accurately the 2008A Bonds being redeemed, including, but not limited to, the Issue Date and maturity date of, and interest rate on, such 2008A Bonds;
 
(3)   in the case of partial redemption of any 2008A Bonds, the principal amount thereof to be redeemed;
 
(4)   the redemption date;
 
(5)   the redemption price;
 
(6)   that on the redemption date the redemption price will become due and payable upon each such 2008A Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date; and
 
(7)   the place where such 2008A Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the Payment Office of the Paying Agent.
 
In addition, the Paying Agent shall at all reasonable times make available to the Issuer, the Company, the Bank and the Remarketing Agent complete information as to 2008A Bonds which have been redeemed or called for redemption.
 
(b)   In addition to the foregoing notice, further notice of any redemption of 2008A Bonds hereunder shall be given by the Paying Agent, on the day of the mailed notice to Bondholders, by registered or certified mail or overnight delivery service to Financial Information, Inc.'s "Daily Called 2008A Bond Service", 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Service's "Called 2008A Bond Service", 55 2008A Bond Street, 28th Floor, New York, New York 10004; Moody's "Municipal and Government", 99 Church Street, 8th Floor, New York, New York 10007, Attention: Municipal News Report; and Standard and Poor's "Called 2008A Bond Record", 26 Broadway, 3rd Floor, New York, New York 10004; or, in accordance with then-current guidelines of the Securities and Exchange Commission, to such other addresses and/or such other services, as the Issuer may designate in writing with respect to the 2008A Bonds, including any nationally recognized municipal securities information repository to which the Issuer and/or the Company is required to file information or notices under SEC Rule 15c2-12 or any successor rule, or no such services, as the Issuer may designate in a certificate of the Issuer delivered to the Paying Agent and the Trustee.  Such further notice shall contain the information required in clause (a) above.  Failure to give all or any portion of such further notice shall not in any manner defeat the effectiveness of a call for redemption if notice thereof is given to the Bondholders as prescribed in clause (a) above.
 
(c)   If at the time of mailing of notice of any optional redemption there shall not have been deposited moneys in the Debt Service Fund available for payment pursuant to Section 3.2(b) sufficient to redeem all the 2008A Bonds called for redemption, such notice shall state that it is conditional in that it is subject to the deposit of the moneys in the Debt Service Fund available for such payment pursuant to Section 3.2(b) not later than the redemption date, and such notice shall be of no effect unless such moneys are so deposited.
 
Section 5.3.   Effect of Redemption .
 
If the redemption price of the 2008A Bonds has been paid to the Trustee in immediately available funds on or before the redemption date, then interest thereon will cease to accrue, and the Registered Owners will have no rights with respect to such 2008A Bonds nor will they be entitled to the benefits of the Indenture except to receive payment of the redemption price thereof and unpaid interest accrued (if any) to the date fixed for redemption.
 
Section 5.4.   Purchase in Lieu of Redemption .
 
Notwithstanding anything to the contrary contained herein, the Company may elect to purchase from the Owners any 2008A Bonds that have been called for redemption under Section 5.6 hereof on the redemption date by giving the Trustee and the Issuer written notice at least two (2) Business Days prior to the date the 2008A Bonds are to be redeemed.  The principal amount of 2008A Bonds to be redeemed on the applicable redemption date shall be reduced by the amount of 2008A Bonds so purchased.  With respect to (i) 2008A Bonds which have been called for redemption under Section 5.7 hereof, the Company (or any Person acting on its behalf) cannot remarket such 2008A Bonds as tax exempt 2008A Bonds until the Company delivers to the Issuer and the Trustee an opinion of Bond Counsel that the interest on the 2008A Bonds to be remarketed is not includable in the gross income of the owners or Beneficial Owners thereof for federal income tax purposes except for interest on any 2008A Bond for any period during which such 2008A Bond is owned by a person who is a "substantial user" of the Project Facilities or any person considered to be related to such person within the meaning of Section 147(a) of the Code, or (ii) any 2008A Bonds called for redemption under Section 5.6 hereof, the Company (or any Person acting on its behalf) cannot remarket such 2008A Bonds until the Company delivers to the Issuer and the Trustee an opinion of counsel that none of the 2008A Bonds or the Loan Agreement are subject to registration under the Securities Act of 1933, as amended.
 
Section 5.5.   Payment of Redemption Price; 2008A Bonds Redeemed in Part .
 
If (a) unconditional notice of redemption has been duly given or duly waived by the Owners of all 2008A Bonds called for redemption or (b) conditional notice of redemption has been so given or waived and the moneys have been duly deposited with the Paying Agent sufficient to make such redemption, then in either such case the 2008A Bonds called for redemption shall be payable on the redemption date at the applicable redemption price.  Payment of the redemption price together with accrued interest (if any) shall be made by the Paying Agent, out of Available Moneys, to or upon the order of the Owners of the 2008A Bonds called for redemption upon surrender of such 2008A Bonds to the Payment Office of the Paying Agent.  Upon the payment of the redemption price of 2008A Bonds being redeemed, each check or other transfer of funds issued for such purpose shall bear the CUSIP number, if any, identifying by issue and maturity, the 2008A Bonds being redeemed with the proceeds of such check or other transfer.  So long as a Letter of Credit Facility is held by the Paying Agent for 2008A Bonds, upon redemption of less than all of the 2008A Bonds pursuant to this Indenture, the Paying Agent shall take such action as may be permitted under the Letter of Credit Facility securing the 2008A Bonds to reduce the amount available thereunder as required by Section 2C.3, and, upon a redemption of all of the Outstanding 2008A Bonds pursuant to this Indenture, shall surrender the Letter of Credit Facility securing the 2008A Bonds to the Bank for cancellation.
 
Any 2008A Bond which is to be redeemed only in part shall be surrendered at a place stated for the surrender of 2008A Bonds called for redemption in the notice provided for in Section 5.2 (with due endorsement by, or a written instrument of transfer in form satisfactory to the Paying Agent duly executed by, the Owner thereof or his attorney duly authorized in writing and with guaranty of signatures satisfactory to the Paying Agent) and the Issuer shall execute and the Trustee shall authenticate and deliver to the Owner of such 2008A Bond without service charge, a new 2008A Bond or 2008A Bonds, of the same series in any Authorized Denomination as requested by such Owner in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the 2008A Bond so surrendered.
 
Section 5.6.   Optional Redemption .
 
(a)   While the 2008A Bonds are in the Daily Mode, Weekly Mode or Monthly Mode, the 2008A Bonds may be redeemed by the Issuer, at the direction of the Company, in whole at any time or in part on any Interest Payment Date, prior to maturity at a redemption price equal to 100% of the principal amount thereof plus accrued interest (if any) to the redemption date.
 
(b)   While the 2008A Bonds are in a Term Mode, the 2008A Bonds shall be subject to optional redemption prior to maturity by the Issuer, at the direction of the Company, only (i) in whole or in part on a Term Rate Period End Interest Payment Date at a redemption price equal to 100% of the principal amount thereof plus accrued interest (if any) to the redemption date or (ii) prior to the end of the then current Term Rate Period in whole at any time or in part on any Interest Payment Date, provided that the 2008A Bonds shall not be redeemable during the No Call Period shown below, which shall begin on the first day of the current Term Rate Period.  In each Term Rate Period, after the applicable No Call Period, the 2008A Bonds shall be redeemable at the percentage of their principal amount shown below in the Initial Premium column plus accrued interest (if any) to the redemption date.  The premium shall decline semiannually by the amount shown below in the Semiannual Reduction in Premium column until they shall be redeemable without premium in the year indicated in the No Premium After column and for any later years or periods in the respective Term Rate Period.
 
Term Rate Period

Equal to or Greater Than
But Less
Than
No Call
Period
Initial Premium
Semiannual Reduction in Premium
No Premium After
10 Years
8 Years
6 Years
 N/A
10 Years
8 Years
8 Years
5 Years
3 Years
102%
101%
100%
½%
½%
10th year
6th year

(c)   Notwithstanding anything to the contrary in this Section 5.6: (i) 2008A Bonds which are in a Term Mode for a Term Rate Period of less than six years shall not be subject to optional redemption; and (ii) the Issuer may only call 2008A Bonds for any redemption pursuant to this Section 5.6 if the Paying Agent has moneys constituting (or which, in the case of a conditional call pursuant to Section 5.2(c) are expected to constitute) Available Moneys sufficient to effect such redemption.
 
Section 5.7.   Special Mandatory Redemption .
 
The 2008A Bonds are subject to Special Mandatory Redemption prior to maturity not later than 180 days after the Company has notice or actual knowledge of the occurrence of a Determination of Taxability at a redemption price equal to 100% of the principal amount thereof, plus accrued interest, if any, to the redemption date, but such redemption shall only be effected with Available Moneys.  Any such Special Mandatory Redemption shall be in whole unless the Company delivers to the Trustee an opinion of Bond Counsel that redemption of a portion of the Outstanding 2008A Bonds would have the result that interest payable on the 2008A Bonds remaining Outstanding after such redemption would not be includable for federal income tax purposes in the gross income of any owner or Beneficial Owner of a 2008A Bond (other than an owner or Beneficial Owner who is a "substantial user" of the Project Facilities or a "related person" within the meaning of Section 147(a) of the Code and the applicable regulations thereunder), and in such event the 2008A Bonds or portions thereof (in Authorized Denominations) shall be redeemed at such times and in such amounts as Bond Counsel shall so direct in such opinion.
 
If the Trustee receives written notice from any Owner stating that (i) the Owner has been notified in writing by the Internal Revenue Service that it proposes to include the interest on any 2008A Bond in the gross income of such Owner for the reasons stated in the definition of "Determination of Taxability" set forth herein or any other proceeding has been instituted against such Owner which may lead to a Final Determination, and (ii) such Owner will afford the Company the opportunity to contest the same, either directly or in the name of the Owner, and until a conclusion of any appellate review, if sought, then the Trustee shall promptly give notice thereof to the Company and the Issuer and to the Owners of 2008A Bonds then Outstanding.  If the Trustee thereafter receives written notice of a Final Determination, the Trustee shall make demand for prepayment of the unpaid Installment Loan Payments under the Loan Agreement or necessary portions thereof from the Company and, only upon receipt of such prepayment constituting Available Moneys, give notice of the Special Mandatory Redemption of the appropriate amount of 2008A Bonds on the earliest practicable date within the required period of 180 days.  In taking any action or making any determination under this Section 5.1(b), the Trustee may rely on an opinion of counsel.
 
Section 5.8.   [Reserved.]
 
ARTICLE VI                                
 
REPRESENTATIONS AND COVENANTS OF THE ISSUER
 
Section 6.1.   General Limitation; Issuer’s Representation .
 
The representations and covenants of the Issuer herein and in any proceeding, document or certification incidental to issuance of the 2008A Bonds shall not create a pecuniary liability of the Issuer, except to the extent of the Trust Estate.  The Issuer represents and covenants that it has made no pledge, assignment or other conveyance of its rights, title and interest in the Trust Estate except to the Trustee as provided herein.
 
Section 6.2.   Payment of 2008A Bonds and Performance of Covenants .
 
The Issuer shall, but only out of the Revenues, promptly pay the principal of, premium, if any, and interest on the 2008A Bonds at the place, on the dates and in the manner provided in the 2008A Bonds.  The Issuer shall promptly perform and observe all of its other covenants, undertakings and obligations set forth in the Financing Documents.
 
Section 6.3.   Enforcement of the Loan Agreement .
 
The Loan Agreement, a duly executed counterpart of which has been filed with the Trustee, sets forth the covenants and obligations of the Company, including provisions that the Loan Agreement may only be amended with the written consent of the Trustee, and reference is hereby made to the Loan Agreement for a statement of such covenants and obligations of the Company.  Subject to Section 6.4 hereof and the enforcement of Unassigned Issuer’s Rights by the Issuer, the Trustee may enforce against the Company or any Person any rights of the Issuer or obligations of the Company under or arising from the 2008A Bonds or the Loan Agreement, whether or not the Issuer is in default hereunder or under the 2008A Bonds, but the Trustee shall not be deemed to have thereby assumed the obligations of the Issuer under the Loan Agreement.  The Issuer shall fully cooperate with the Trustee in the enforcement by the Trustee of any such rights.
 
Section 6.4.   No Personal Liability .
 
No member, officer or employee of the Issuer, including any person executing this Indenture or the 2008A Bonds and no individual employee or agent of the Company shall be liable personally on the 2008A Bonds or be subject to any personal liability for any reason relating to the issuance of the 2008A Bonds.
 
Section 6.5.   Exemption from Federal Income Taxation .
 
The Issuer will not knowingly take any action, or omit to take any action, which action or omission will adversely affect the exclusion from gross income for federal income tax purposes of interest on the 2008A Bonds, and in the event of such action or omission will promptly, upon receiving knowledge thereof, take all lawful actions, based on advice of counsel and at the expense of the Company, as may rescind or otherwise negate such action or omission.
 
Section 6.6.   Corporate Existence; Compliance with Laws .
 
The Issuer shall maintain its corporate existence; shall use its best efforts to maintain and renew all its rights, powers, privileges and franchises; and shall comply with all valid and applicable laws, rules, regulations, orders, requirements and directions of any legislative, executive, administrative or judicial body relating to the Issuer’s participation in the financing of the Project, the issuance of the 2008 2008A Bonds or its execution, delivery and performance of this Indenture and the Loan Agreement.
 
Section 6.7.   Filings .
 
The Issuer shall cause this Indenture or financing statements relating hereto to be filed, in such manner and at such places as may be required by law fully to protect the security of the Registered Owners and the right, title and interest of the Trustee in and to the Trust Estate or any part thereof.  From time to time, the Trustee may, but shall not be required to, obtain an opinion of counsel setting forth what, if any, actions by the Issuer or Trustee should be taken to preserve such security.  The Issuer shall execute or cause to be executed any and all further instruments as shall reasonably be requested by the Trustee for such protection of the interests of the Registered Owners and shall furnish satisfactory evidence to the Trustee of filing and refiling of such instruments and of every additional instrument which shall be necessary to preserve the lien of the Indenture upon the Trust Estate or any part thereof until the principal, redemption price or purchase price of, and interest on the 2008A Bonds issued hereunder shall have been paid in full.  The Issuer shall cause to be prepared, and the Trustee shall execute or join in the execution of, any such further or additional instrument and file or join in the filing thereof at such time or times and in such place or places as it may be advised by an opinion of counsel to preserve the lien of this Indenture upon the Trust Estate or any part thereof until the aforesaid principal,  redemption price, purchase price and interest shall have been paid.
 
Section 6.8.   Further Assurances .
 
Except to the extent otherwise provided in this Indenture, the Issuer shall not enter into any contract or take any action by which the rights of the Trustee or the Registered Owners may be impaired and shall, from time to time, execute and deliver such further instruments and take such further action as may be required to carry out the purposes of this Indenture.
 
Section 6.9.   Inspection of Books .
 
All books and records, if any, in the Issuer’s possession relating to the Project and the amounts derived from the Project and the Project Facilities shall, upon written request and at all reasonable times, be open to inspection by such accountants or other agents as the Trustee may from time to time designate.
 
ARTICLE VII                                
 
EVENTS OF DEFAULT AND REMEDIES
 
Section 7.1.   Events of Default Defined .
 
(a)   Each of the following shall be an Event of Default hereunder:
 
(i)   Payment of any installment of interest, principal or premium, if any, on the 2008A Bonds, or the purchase price on any 2008A Bond tendered pursuant to Article IIB, is not made when due and payable; or
 
(ii)   An Act of Bankruptcy shall occur; or
 
(iii)   Failure by the Issuer to observe or perform any covenant, condition or agreement on its part to be observed or performed under this Indenture, other than as referred to in (i) above, for a period of 60 days after written notice is given to the Issuer, specifying such failure and requesting that it be remedied, by the Trustee; provided, however, that if the failure stated in the notice is such that it can be remedied but not within such 60-day period, it shall not constitute an Event of Default if the default, in the judgment of the Trustee in reliance upon advice of counsel, is correctable without material adverse effect on the Bondholders and if corrective action is instituted by the Issuer within such period and is diligently pursued until the default is remedied; or
 
(iv)   The occurrence of an Event of Default under the Loan Agreement; or
 
(v)   Receipt by the Trustee of a written notice from the Bank stating that an event of default has occurred under the Reimbursement Agreement and directing the Trustee to declare the principal of the outstanding 2008A Bonds immediately due and payable; or
 
(vi)   Receipt by the Trustee of a written notice from the Bank pursuant to the Letter of Credit that amounts available to pay interest under the Letter of Credit will not be reinstated following a drawing thereunder to pay interest; or
 
(vii)   Receipt by the Trustee of a written notice from the Bank, stating that an event of default has occurred under the Reimbursement Agreement and directing that all of the 2008A Bonds be required to be tendered for purchase pursuant to Section 2B4.
 
(b)   The Trustee shall promptly notify the Issuer, the Company and the Bank in writing of the occurrence of any Event of Default after it receives written notice or has actual knowledge of such occurrence.
 
(c)   Force Majeure .  The provisions of Section 7.1(a)(iii) hereof and Section [8.1(b)(vi)] of the Loan Agreement are subject to the following limitations:  if by reason of acts of God; strikes, lockouts or other industrial disturbances; acts of public enemies; orders of any kind of the Government of the United States or of the Commonwealth or any department, agency, political subdivision, court or official of any of them, or any civil or military authority; insurrections; riots; epidemics; landslides; lightning; earthquakes; volcanoes; fires; hurricanes; tornadoes; storms; blue northers; floods; washouts; droughts; restraint of government and people; civil disturbances; explosions; breakage or accident to machinery; partial or entire failure of utilities; or any cause or event not reasonably within the control of either the Company or the Issuer, the Company is unable in whole or in part to carry out any one or more of its agreements or obligations contained in the Loan Agreement (other than its obligations under [Sections 6.4 through 6.6, 6.10, 7.1, 7.2 and 8.3 thereof]) or the Issuer is unable in whole or in part to carry out any one or more of its agreements or obligations contained in this Indenture (other than its obligations to pay the principal of, and premium, if any, and interest on the 2008A Bonds as herein provided), neither the Company nor the Issuer shall be deemed in default by reason of not carrying out said agreement or agreements or performing said obligation or obligations during the continuance of such inability.  Both the Company and the Issuer shall make commercially reasonable efforts to remedy with all reasonable dispatch the cause or causes preventing them from carrying out their respective agreements; provided, that the settlement of strikes, lockouts and other industrial disturbances shall be entirely within the discretion of the Company, and the Company shall not be required to make settlement of strikes, lockouts and other disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of the Company unfavorable to the Company.
 
Section 7.2.   Acceleration and Annulment Thereof .
 
                      If any Event of Default occurs and is continuing, the Trustee (with the written consent of the Bank) may, and upon written request of the Registered Owners of at least 25% in principal amount of all 2008A Bonds then Outstanding (and, so long as the Bank has not wrongfully dishonored any drawing under the Letter of Credit, with the written consent of the Bank), or with respect to an Event of Default under subsection 7.1(a)(v), (vi) or (vii) hereof, shall, by notice in writing to the Issuer, the Bank and the Company, declare the principal of all 2008A Bonds then Outstanding to be immediately due and payable; and upon such declaration the said principal, together with interest accrued thereon to the date of such declaration, shall become due and payable immediately at the place of payment provided therein, anything in the Indenture or in the 2008A Bonds to the contrary notwithstanding.  Upon the occurrence of any acceleration hereunder, the Trustee shall immediately declare all payments under the Loan Agreement pursuant to Section 5.4 thereof to be due and payable immediately.
 
Immediately after any acceleration hereunder, the Trustee, to the extent it has not already done so, shall notify in writing the Issuer, the Company, the Paying Agent, the Bank, and the Remarketing Agent of the occurrence of such acceleration.  Upon the occurrence of any acceleration hereunder, the Trustee shall notify by first class mail, postage prepaid, the owners of all Outstanding 2008A Bonds of the occurrence of such acceleration.
 
Upon any such declaration hereunder, the Trustee shall immediately, on the date of such declaration, draw upon the Letter of Credit to the full extent permitted by the terms thereof (such drawing to include amounts in respect of interest accruing on the 2008A Bonds through the date of declaration).  Upon receipt by the Trustee of payment of the full amount drawn on the Letter of Credit and provided sufficient moneys are available in the Bond Fund to pay pursuant to Section 3.2 all sums due on the 2008A Bonds, (i) interest on the 2008A Bonds shall cease to accrue on the date of such declaration and (ii) the Bank shall succeed to and be subrogated to the right, title and interest of the Trustee and the Registered Owners in and to the Loan Agreement, all funds held under this Indenture (except any funds held in the Debt Service Fund or the Letter of Credit Purchase Account which are identified for the payment of the 2008A Bonds or of the purchase price of undelivered 2008A Bonds) and any other security held for the payment of the 2008A Bonds, all of which, upon payment of any fees and expenses due and payable to the Trustee pursuant to the Loan Agreement or this Indenture, shall be assigned by the Trustee to the Bank.
 
If, after the principal of the 2008A Bonds has become due and payable, all arrears of interest upon the 2008A Bonds are paid by the Issuer, and the Issuer also performs all other things in respect to which it may have been in default hereunder and pays the reasonable charges of the Trustee and the Registered Owners, including reasonable and necessary attorneys' fees and expenses, then, and in every such case, the owners of a majority in principal amount of the 2008A Bonds then Outstanding, by notice to the Issuer and to the Trustee, may annul such acceleration and its consequences, and such annulment shall be binding upon the Trustee and upon all owners of 2008A Bonds issued hereunder; provided that there shall be no annulment of any declaration resulting from (A) any Event of Default specified in subsection 7.1(a)(v) or 7.1(a)(vii) without the prior written consent of the Bank, which consent shall (i) rescind the Event of Default under the Reimbursement Agreement; (ii)  rescind the notice of such Event of Default; and (iii) reinstate the Letter of Credit, and (B) any Event of Default which has resulted in a drawing under the Letter of Credit or any Event of Default specified in Section 7.1(a)(vi) unless the Trustee has received written notice from the Bank that the Letter of Credit has been fully reinstated and that the expiration event has been rescinded and notice of the event of default under the reimbursement agreement has been rescinded or an Alternate Credit Facility has been provided pursuant to Section 2C7 hereof.  No such annulment shall extend to or affect any subsequent default or impair any right or remedy consequent thereon.  The Trustee shall forward a copy of any notice from Registered Owners received by it pursuant to this paragraph to the Company.  Immediately upon such annulment, the Trustee shall cancel, by notice to the Company, any demand for prepayment of all amounts due under the Loan Agreement made by the Trustee pursuant to this Section.  The Trustee shall promptly give written notice of such annulment to the Issuer, the Company, the Paying Agent, the Remarketing Agent, and, if notice of the acceleration of the 2008A Bonds shall have been given to the Registered Owners, shall give notice thereof to the Registered Owners.
 
Section 7.3.   Legal Proceedings by Trustee .
 
If any Event of Default has occurred and is continuing, the Trustee in its discretion may, and upon the written request of the Registered Owners of 25% or more in principal amount of the 2008A Bonds then Outstanding and receipt of indemnity to its sole satisfaction shall (and, so long as the Bank has not wrongfully dishonored any drawing under the Letter of Credit, with the written consent of the Bank), in its own name;
 
(a)   By mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Registered Owners, including the right to require the Issuer or the Company to carry out any other agreements with, or for the benefit of, the Registered Owners;
 
(b)   Bring suit upon the 2008A Bonds;
 
(c)   By action or suit in equity require the Issuer to account as if it were the trustee of an express trust for the Registered Owners; and
 
(d)   By action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Registered Owners.
 
Section 7.4.   Discontinuance of Proceedings by Trustee .
 
If any proceeding taken by the Trustee on account of any default is discontinued or is determined adversely to the Trustee, then the Issuer, the Trustee, the Company and the Registered Owners shall be restored to their former positions and rights hereunder as though no such proceeding had been taken.
 
Section 7.5.   Registered Owners May Direct Proceedings .
 
The Registered Owners of a majority in principal amount of the 2008A Bonds then Outstanding hereunder shall have the right to direct the method and place of conducting all remedial proceedings by the Trustee hereunder; provided that the Trustee shall have the right to decline to follow any such direction if the Trustee, upon advice of counsel, determines that the action so directed may not be lawfully taken or if the Trustee in good faith determines that the action so directed might involve the Trustee in personal liability or might unduly prejudice the interests of the Registered Owners not parties to such direction, it being understood that the Trustee has no duty to ascertain whether or not such actions so directed are unduly prejudicial to such Registered Owners.
 
Section 7.6.   Limitations on Actions by Registered Owners .
 
No Registered Owner shall have any right to pursue any remedy hereunder unless (a) the Trustee shall have been given written notice of an Event of Default or the Trustee is deemed to have notice as provided in Section 8.3(h), (b) the Registered Owners of at least 25% in principal amount of the 2008A Bonds then Outstanding shall have requested the Trustee, in writing, to exercise the powers hereinabove granted or to pursue such remedy in its or their name or names, (c) the Trustee shall have been offered indemnity satisfactory to it against costs, expenses and liabilities, and (d) the Trustee shall have failed to comply with such request within a reasonable time; it being understood and intended that no one or more Registered Owners shall have any right in any manner whatsoever to affect, disturb or prejudice the lien of this Indenture by its, his or their action or to enforce any right hereunder except in the manner herein provided, and that all proceedings at law or in equity shall be instituted, had and maintained in the manner herein provided and for the equal and ratable benefit of the owners of all 2008A Bonds then Outstanding.  Nothing contained in this Indenture, however, shall affect or impair the right of any Registered Owner to enforce the payment of the principal of, premium, if any, and interest on any 2008A Bond at and after the maturity thereof, or the obligation of the Issuer to cause the payment of the principal of, premium, if any, and interest on each of the 2008A Bonds issued hereunder to the respective owners thereof on the date, at the place, from the source and in the manner in the 2008A Bonds expressed.
 
Section 7.7.   Trustee May Enforce Rights Without Possession of 2008A Bonds .
 
All rights under this Indenture and the 2008A Bonds may be enforced by the Trustee without the possession of any 2008A Bonds or the production thereof at the trial or other proceedings relative thereto, and any proceeding instituted by the Trustee shall be brought in its name for the ratable benefit of the Registered Owners of the 2008A Bonds.
 
Section 7.8.   Remedies Not Exclusive .
 
Except as limited under Section 11.1 of this Indenture, no remedy herein conferred is intended to be exclusive of any other remedy or remedies, and each remedy is in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute.
 
Section 7.9.   Delays and Omissions Not to Impair Rights .
 
No delay or omission in respect of exercising any right or power accruing upon any default shall impair such right or power or be a waiver of such default, and every remedy given by this Article may be exercised from time to time and as often as may be deemed expedient.
 
Section 7.10.   Application of Moneys in Event of Default .
 
Any moneys received by the Trustee under this Article shall be applied in the following order; provided, however, that all moneys received by the Trustee pursuant to any drawing made upon the Letter of Credit pursuant to Section 7.2 shall be applied by the Trustee to and only to the payment of principal of and interest on the 2008A Bonds:
 
(a)           To the payment of the reasonable costs and expenses of the Trustee, including reasonable counsel fees and expenses, any disbursements of the Trustee with interest thereon at the prime rate of the Trustee (or its primary banking Affiliate) and its reasonable compensation; and
 
(b)           To the payment of principal or redemption price (as the case may be) and interest then owing on the 2008A Bonds, and in case such moneys shall be insufficient to pay the same in full, then to the payment of principal or redemption price and interest ratably, without preference or priority of one over another or of any installment of interest over any other installment of interest; and
 
(c)           To the payment of reasonable costs and expenses of the Issuer, including reasonable counsel fees and expenses, incurred in connection with the Event of Default.
 
The surplus, if any, shall to the extent of any unreimbursed drawing under the Letter of Credit, or other obligations owing to the Bank under the Reimbursement Agreement, in either event, as certified to the Trustee by the Bank, be paid to the Bank, and any remaining amounts shall be paid to the Company.  Funds on deposit in the Letter of Credit Purchase Account shall be applied in accordance with Section 2B hereof.
 
Section 7.11.   Trustee’s Right to Receiver .
 
The Trustee shall be entitled as of right to the appointment of a receiver; and the Trustee, the Registered Owners and any receiver so appointed shall have such rights and powers and be subject to such limitations and restrictions as are permitted by law.
 
Section 7.12.   Trustee and Registered Owners Entitled to All Remedies .
 
It is the purpose of this Article to make available to the Trustee and the Registered Owners all lawful remedies; but should any remedy herein granted be held unlawful, the Trustee and the Registered Owners shall nevertheless be entitled to every other remedy provided by law.  It is further intended that, insofar as lawfully possible, the provisions of this Article shall apply to and be binding upon any trustee or receiver who may be appointed hereunder.
 
Section 7.13.   Waiver of Past Defaults .
 
The Registered Owners of not less than a majority in principal amount of the Outstanding 2008A Bonds may on behalf of the Registered Owners of all the 2008A Bonds (by written notice thereof to the Issuer and the Trustee) waive any past default hereunder and its consequences, except a default (1) in the payment of the principal of, redemption premium, if any, or interest on, any 2008A Bond unless prior to such waiver or rescission, all arrears of principal or interest, or both, as the case may be, and all expenses of the Trustee, in connection with such default shall have been paid or provided for; or (2) in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the Registered Owner of each Outstanding 2008A Bond.  Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
 
ARTICLE VIII                                
 
THE TRUSTEE AND THE PAYING AGENT
 
Section 8.1.   Certain Duties and Responsibilities of Trustee .
 
(a)   The Trustee accepts the trusts hereby created and agrees to perform the duties herein required of it upon the terms and conditions hereof.  The Trustee shall have the right, power and authority, at all times, to do all things not inconsistent with the express provisions of this Indenture which it may deem necessary or advisable in order to:  (i) enforce the provisions of this Indenture, (ii) take any action with respect to any Event of Default, (iii) institute, appear in or defend any suit or other proceeding with respect to an Event of Default, or (iv) protect the interests of the Owners of any Outstanding 2008A Bonds.  The Trustee shall be responsible only for performing those duties of the Trustee specifically provided for herein and no implied duties or liabilities shall be read into this Indenture against the Trustee.
 
(b)   The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and, except as provided in the next succeeding sentence in respect of the period during the continuance of an Event of Default, the Trustee shall not be liable for any action reasonably taken or omitted to be taken by it in good faith and reasonably believed by it to be within the discretion or power conferred upon it hereby, or be responsible other than for its own gross negligence or willful misconduct.  In case an Event of Default has occurred and is continuing of which the Trustee has been notified as provided in Section 8.3(h) or of which it is deemed to have notice pursuant to such Section, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise under the circumstances in the conduct of his own affairs.
 
(c)   The Trustee shall not be required to give any bond or surety in respect of the execution of its rights and duties under this Indenture.
 
(d)   No provision of this Indenture shall be construed to relieve the Trustee from liability for its own grossly negligent action, its own negligent failure to act or its own willful misconduct, except that
 
(i)   this subsection shall not be construed to limit the effect of subsection (a) of this Section;
 
(ii)   the Trustee shall not be liable for any error of judgment made in good faith by its officers, unless it shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts;
 
(iii)   the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with any direction of the Registered Owners of 25% of, or not less than a majority in aggregate principal amount of, as the case may be, the Outstanding 2008A Bonds permitted to be given by them under this Indenture except as otherwise provided herein; and
 
(iv)   no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity, satisfactory to the Trustee in its sole discretion, against such risk or liability is not assured to it.
 
(e)   Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.
 
(f)   Except as otherwise expressly provided by the provisions of this Indenture, the Trustee shall not be obligated and may not be required to give or furnish any notice, demand, report, request, reply, statement, advice or opinion to any Holder or any other Person, and the Trustee shall not incur any liability for its failure or refusal to give or furnish the same unless obligated or required to do so by the express provisions hereof.
 
(g)   In acting or omitting to act pursuant to the provisions of the Loan Agreement, the Trustee shall be entitled to all of the rights and immunities accorded to it under this Indenture, including but not limited to those set out in this Article VIII.
 
(h)   Notwithstanding any provisions of this Indenture to the contrary, the Trustee shall not be liable or responsible for the accuracy of any calculation or determination which may be required in connection with or for the purpose of complying with Section 148 of the Code, including, without limitation, the calculation of amounts required to be paid to the United States under the provisions of Section 148 of the Code, the maximum amount which may be invested in "nonpurpose obligations" as defined in the Code and the fair market value of any investments made hereunder, and the sole obligation of the Trustee with respect to the investments of funds hereunder shall be to invest the moneys received by the Trustee as provided herein pursuant to the written instructions of the Company.
 
Section 8.2.   Notice if Event of Default Occurs or Notice if Taxability Occurs .
 
The Trustee shall give written notice as soon as possible (and in any event within three (3) Business Days) to the Registered Owners (with copies to the parties to the Financing Documents) of the occurrence of any Event of Default hereunder after the Trustee acquires actual knowledge thereof, unless such default shall have been cured or waived; provided, however, that, in the case of an Event of Default of the character described in Section 7.1(a)(iii), the Trustee shall be protected in withholding such notice if and so long as the Trustee in good faith determines that the withholding of such notice is in the interest of the Registered Owners. The Trustee shall also give to the parties to the Financing Documents and the Registered Owners written notice within five (5) Business Days of receipt by it of any notification from the Internal Revenue Service that the interest on the 2008A Bonds is, or may be, subject to federal income taxation.
 
Section 8.3.   Certain Rights of Trustee .
 
Except as otherwise provided in Section 8.1:
 
(a)   the Trustee may conclusively rely upon, and shall be protected in acting or refraining from acting upon, any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties and any action taken by the Trustee pursuant to this Indenture upon the request, authority or consent of any Registered Owner (determined at the time of such request, authority or consent) shall be conclusive and binding upon all future owners of the same 2008A Bond and any 2008A Bonds issued in exchange therefor);
 
(b)   any request or direction of the Issuer or the Company mentioned herein shall be sufficiently evidenced by a writing signed by an Authorized Representative and any resolution of the Issuer may be sufficiently evidenced by a copy of such resolution certified by an Authorized Representative;
 
(c)   whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, rely upon a certificate of an Authorized Representative;
 
(d)   before the Trustee acts or refrains from acting, it may consult with counsel, engineers or other experts as may be appropriate, and the written advice of such counsel, engineers or other experts as may be appropriate shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
 
(e)   the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Registered Owners pursuant to this Indenture, unless such Registered Owners shall have offered to the Trustee security or indemnity acceptable to the Trustee in its sole discretion against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction and such action may be lawfully taken;
 
(f)   the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon reasonable notice and during regular business hours, and subject, further to the Company’s safety and confidentiality requirements to examine the books, records and premises of the Company and the books and records of the Issuer concerning the 2008A Bonds personally or by agent or attorney;
 
(g)   the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or indirectly or by or through agents or attorneys provided that the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney reasonably appointed by it hereunder in good faith; and
 
(h)   the Trustee shall not be required to take notice or be deemed to have notice of any default hereunder unless the Trustee shall be specifically notified of such default in writing by the Issuer, the Company or the Owners of a majority in principal amount of the Outstanding 2008A Bonds, and in the absence of such notice the Trustee may conclusively assume there is no default; provided, however, that the Trustee shall be required to take and be deemed to have notice of its failure to receive the moneys necessary to make payments when due of the 2008A Bond Obligations.
 
Section 8.4.   Trustee Not Responsible for Recitals or Issuance of 2008A Bonds .
 
Except for the Trustee's certificate of authentication signed on the 2008A Bonds, the Trustee assumes no responsibility for correctness of the terms set forth herein or in the 2008A Bonds.  The Trustee makes no representations as to the validity or sufficiency of this Indenture, except that the Trustee represents that said Indenture has been duly authorized, executed and delivered by the Trustee and constitutes a legal, valid and binding obligation of the Trustee in accordance with the terms hereof, except as its enforceability may be subject to (i) the exercise of judicial discretion in accordance with general equitable principles; and (ii) applicable bankruptcy, insolvency, reorganization, moratorium and other laws for the relief of debtors heretofore or hereafter enacted to the extent that the same may be constitutionally applied.  Further, the Trustee makes no representations as to the validity or sufficiency of the 2008A Bonds.  The Trustee shall not be accountable for the use or application by the Issuer or the Company of 2008A Bonds or the proceeds thereof.  The Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenant, condition or agreement on the part of the Issuer or the Company under the Loan Agreement (except as provided in Section 8.3(h) hereof), but the Trustee may require of the Issuer or the Company full information and advice as to the performance on such covenants, conditions and agreements.
 
Section 8.5.   Trustee May Hold 2008A Bonds .
 
The Trustee or any other agent of the Issuer or the Company, in its individual or any other capacity, may become the owner of 2008A Bonds and may otherwise deal with the Issuer or the Company with the same rights it would have if it were not Trustee or such other agent.  The Trustee may in good faith buy, sell, own, hold and deal in any of the 2008A Bonds and may join in any action which any Registered Owners may be entitled to take with like effect. The Trustee may also engage in or be interested in financial or other transactions with the Company and the Issuer; provided that such transactions are not in conflict with its duties under this Indenture.
 
Section 8.6.   Money Held in Trust .
 
All money deposited from time to time in the Debt Service Fund shall be held in trust for the benefit of the Owners but, except as provided in Article X of this Indenture, need not be segregated from other funds held in trust under this Indenture by the Trustee, but shall be segregated at all times from all funds of the Issuer or the Trustee not held by the Trustee under this Indenture.  The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise provided in this Indenture.
 
Section 8.7.   Corporate Trustee Required; Eligibility .
 
There shall at all times be a Trustee hereunder which shall be a corporation or association organized and doing business under the laws of the United States of America or of any state that is either a trust company or a bank in good standing in the Commonwealth, authorized under such laws to exercise trust powers and authorized under the Act to act as Trustee hereunder, having a combined capital, surplus and undivided profits of at least $100,000,000, subject to supervision or examination by federal or state authority, and shall not be a Disqualified Contractor.  If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
 
Section 8.8.   Resignation and Removal of Trustee; Appointment of Successor .
 
(a)   No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee under Section 8.9 of this Indenture.
 
(b)   The Trustee may resign at any time by giving written notice thereof to the other parties to the Financing Documents.  If an instrument of acceptance by a successor Trustee shall not have been delivered to the resigning Trustee within thirty (30) days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.
 
(c)   The Trustee may be removed at any time by the Owners of a majority in aggregate principal amount of the Outstanding 2008A Bonds, or so long as no Event of Default or no event which with the passage of time or the giving of notice or both would constitute an Event of Default is then in existence, by the Company, in either case by an instrument in writing delivered to the parties to the Financing Documents not less than fifteen (15) days prior to the intended effective date of the removal.
 
(d)   If at any time:  (i) the Trustee shall cease to be eligible under Section 8.7 of this Indenture or under applicable law and shall fail to resign after written request therefor as a result thereof by any party to a Financing Document or by a Registered Owner who has been a bona fide Owner for at least six (6) months, or (ii) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (x) the Company or the Issuer may remove the Trustee, or (y) any Registered Owner who has been a bona fide Owner for at least six (6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
 
(e)   If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Issuer, with the prior consent of the Company, if any, shall promptly appoint a successor Trustee.  If, within sixty (60) days after such resignation, removal or incapability, or the occurrence of such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by the Owners of a majority in aggregate principal amount of the Outstanding 2008A Bonds and notice of acceptance of such appointment is delivered to the parties to the Financing Documents, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede the successor Trustee appointed by the Issuer.  The Trustee shall assign all its interests hereunder to the successor Trustee.  If no successor Trustee shall have been so appointed by the Issuer or the Registered Owners and accepted appointment in the manner hereinafter provided, any Registered Owner who has been a bona fide Registered Owner for at least six (6) months may, on behalf of himself and all other Owners similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee.
 
(f)   The Issuer, at the expense of the Company, shall give prompt notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by mailing written notice of such event to the Registered Owners and to the parties to the Financing Documents.  Each notice shall include the name of the successor Trustee and the address of its corporate trust operations office.
 
Section 8.9.   Acceptance of Appointment by Successor Trustee .
 
Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the parties to the Financing Documents, including the retiring Trustee, an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on request of the Issuer or the successor Trustee, such retiring Trustee shall, upon payment of its charges and expenses by the Company, execute and deliver an instrument prepared by the successor Trustee transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.  Upon request of any such successor Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.  No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.
 
Section 8.10.   Merger, Conversion, Consolidation or Succession to Business .
 
Any corporation or association into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation or association resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or association succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, to the extent operative, without the execution or filing of any paper or any further act on the part of any of the parties hereto.
 
Section 8.11.   Fees, Charges and Expenses of Trustee .
 
Pursuant to the provisions of Section 6.5 and 8.3 of the Loan Agreement, the Trustee shall be entitled to be paid by the Company reasonable compensation for its services rendered hereunder and to reimbursement for its actual out-of-pocket expenses (including reasonable counsel fees) necessarily incurred in connection therewith.  The Company may, without creating a default hereunder, contest in good faith the necessity for and the reasonableness of any such services and expenses after making payment therefor.  The Company, the Issuer and the Bondholders agree that the Trustee shall have a lien for the foregoing compensation, expenses and fees upon the Trust Estate (other than moneys held for the payment of particular 2008A Bonds whether or not such payment is then due and owing) and, upon an Event of Default hereunder, the Trustee shall have a right of payment prior to payment to the Bondholders on account of principal of, premium, if any, and interest on any 2008A Bond as provided in Section 7.10 hereof.
 
The Issuer shall require the Company, pursuant to the Loan Agreement, to indemnify and hold harmless the Trustee against any liabilities which the Trustee may incur in the exercise and performance of its powers and duties hereunder, under the Loan Agreement and any other agreement referred to herein which are not due to the Trustee’s gross negligence or willful misconduct, and for any fees and expenses of the Trustee to the extent funds are not available under this Indenture as provided in the preceding paragraph for the payment thereof.  The rights of the Trustee under this Section shall survive the payment in full of the 2008A Bonds and the discharge of this Indenture.  The Trustee acknowledges that the requirement set forth in this paragraph has been satisfied by the Issuer and agrees that in the event the Company fails to perform its obligations under the Loan Agreement relating to such undertaking, the Trustee will make no claim against the Issuer with respect thereto.
 
When the Trustee incurs expenses or renders services after an Event of Default as a result of an Act of Bankruptcy of the Company, the expenses and the compensation for services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration of the bankruptcy estate under applicable bankruptcy law.
 
Section 8.12.   Appointment, Capacities and Duties of Paying Agent .
 
The Issuer shall appoint the Paying Agent for the purpose of acting as paying agent, Bond registrar, transfer agent, tender agent and the beneficiary of the Letter of Credit Facility as provided by this Indenture; provided that in its capacities as tender agent and beneficiary of the Letter of Credit Facility, the Paying Agent shall act as agent for the Trustee.  The Paying Agent shall be a national banking association, a bank and trust company or a trust company.  The Issuer hereby appoints Manufacturers and Traders Trust Company, Harrisburg, Pennsylvania, as Paying Agent and designates the Payment Office of the Paying Agent as a place of payment, such appointment and designation to remain in effect until notice of change pursuant to this Article is filed with the Trustee.  The Paying Agent shall act as paying agent, Bond registrar, transfer agent, and tender agent as provided in this Indenture.  The Paying Agent shall signify its acceptance of the duties and obligations imposed upon it hereunder by its written instrument of acceptance addressed to the Issuer, the Trustee and the Company and delivered to such persons and to the Trustee, the Remarketing Agent and the Bank, under which the Paying Agent shall agree to:

(1)           hold all sums delivered to it by the Trustee or the Company (or the Bank under a Letter of Credit Facility) for the payment of principal or redemption price of, premium, if any, on and interest on the 2008A Bonds in trust for the benefit of the respective Owners until such sums shall be paid to such Owners or otherwise disposed of as herein provided;

(2)           hold all 2008A Bonds tendered to it hereunder in trust for the benefit of the respective Owners until moneys representing the purchase price of such 2008A Bonds shall have been delivered to or for the account of or to the order of such Owners;

(3)           hold all moneys delivered to it hereunder for the purchase of 2008A Bonds in trust for the benefit of the person which shall have so delivered such moneys until the 2008A Bonds purchased with such moneys shall have been delivered to or for the account of such person;

(4)           hold and draw on any Letter of Credit Facility and apply the proceeds of drawings thereon in accordance with the terms of this Indenture and Letter of Credit Facility; and

(5)           keep such books and records as shall be consistent with prudent corporate trust industry practice and make such books and records available for inspection by the Trustee, the Remarketing Agent, the Issuer, the Company and the Bank at all reasonable times upon prior written request.

Section 8.13.   Paying Agent May Act Through Agents; Answerable Only for Willful Misconduct or Gross Negligence .
 
The Paying Agent may exercise any powers hereunder and perform any duties required of it through attorneys, agents, officers or employees, and shall be entitled to advice of counsel concerning all questions hereunder.  The Paying Agent shall not be responsible for the contents of the recitals, statements and representations in the Indenture and the 2008A Bonds.  The Paying Agent shall not be responsible for any loss or damage resulting from any action or inaction taken in good faith in reliance upon an opinion of counsel.  The Paying Agent shall not be answerable for the exercise of any discretion or power under this Indenture, except only its own willful misconduct or gross negligence.

Section 8.14.   Compensation and Indemnity .
 
Pursuant to Sections 6.5 and 7.1 of the Loan Agreement, the Issuer shall cause the Company (i) to pay the Paying Agent reasonable compensation for its services hereunder, and also all its reasonable expenses and disbursements, including reasonable compensation for all attorneys and agents engaged by it and the payment of the reasonable expenses of such attorneys and agents, and (ii) to indemnify the Paying Agent, including its officers, directors, employees and agents, against liabilities which it may incur in the exercise and performance of its powers and duties hereunder, except with respect to its willful misconduct or gross negligence.  Notwithstanding anything herein to the contrary, the Paying Agent's obligations herein to make payments on the 2008A Bonds with funds provided under this Indenture for such purpose and to draw on any Letter of Credit Facility shall not be conditioned upon the payment of such compensation, expenses or indemnity. Draws on the Company Debt Service Account shall not be conditioned upon the payment of such compensation, expenses or indemnity.

Section 8.15.   Reliance .
 
The Paying Agent may rely, and subject to Section 8.13 shall be free of all liability for so relying on any requisition, resolution, notice, telegram, request, consent, waiver, certificate, statement, affidavit, voucher, bond, opinion of counsel or other paper or document which it in good faith believes to be genuine and to have been passed or signed by the proper persons or to have been prepared and furnished pursuant to any of the provisions of this Indenture; and the Paying Agent shall be under no duty to make any investigation as to any statement contained in any such instrument, but may accept the same as conclusive evidence of the accuracy of such statement.

Section 8.16.   Paying Agent May Deal in 2008A Bonds .
 
The Paying Agent may in good faith buy, sell, own, hold and deal in any of the 2008A Bonds and may join in any action which any Bondholders may be entitled to take.  The Paying Agent may be, or be affiliated with, the Trustee, the Remarketing Agent and/or the Bank.  The Paying Agent may also engage in or be interested in any financial or other transaction with the Issuer, the Company, the Bank, the , the Remarketing Agent or any related party; provided that if the Paying Agent determines that any such transaction is in conflict with its duties under this Indenture, it shall eliminate the conflict or resign as Paying Agent.

Section 8.17.   Removal or Resignation of Paying Agent .
 
The Paying Agent may be removed at any time by an instrument appointing a successor to the Paying Agent so removed, executed by (a) the Company with the prior written consent of the Bank  (but only if no Event of Default has occurred and is continuing); or (b) the Owners of a majority in principal amount of the 2008A Bonds then Outstanding, which instrument in either case shall be filed with the Paying Agent, the Trustee, the Issuer and the Bank (with a copy to the Company).  The Company shall also designate a successor if the Paying Agent resigns or becomes ineligible.  The Paying Agent may resign by giving at least 60 days’ prior written notice to the Trustee, the Remarketing Agent, the Company and the Bank.  Each successor Paying Agent shall be a bank and trust company or trust company having a capital and surplus of not less than $50,000,000 if there be such an institution willing, able and legally qualified to perform the duties of the Paying Agent hereunder upon reasonable or customary terms and shall be capable of performing the duties prescribed for it herein.  The Paying Agent may but need not be the same person as the Trustee.  The Issuer shall direct the Trustee to give notice of the appointment of a successor Paying Agent in writing 15 days prior to such appointment taking effect to each Owner as well as to the Rating Service.  The Trustee will promptly certify to the Issuer that it has mailed such notice to all Owners and such certificate will be conclusive evidence that such notice was given in the manner required hereby.  In the event of the resignation or removal of the Paying Agent, the Paying Agent shall pay over, assign and deliver any moneys and 2008A Bonds held by it and the 2008A Bond Register maintained by it in such capacity to its successor, and shall take all necessary action to cause any Letter of Credit Facility to be transferred to its successor as of the effective date of such succession, provided that the Paying Agent shall not be responsible for any transfer or assignment fees imposed by the Bank.  Such resignation or removal shall take effect only upon the appointment of a successor Paying Agent and the transfer of any Letter of Credit Facility to it.

Section 8.18.   Successor Paying Agents .
 
Any corporation or association which succeeds to the corporate trust business of the Paying Agent as a whole or substantially as a whole, whether by sale, merger, consolidation or otherwise, shall thereby become vested with all the property, rights and powers of such Paying Agent under this Indenture, provided that the Paying Agent has given at least 60 days’ prior written notice of the proposed transaction resulting in such succession to the Issuer and the Company.  In the event that the Paying Agent shall resign or be removed, or be dissolved, or if the property or affairs of the Paying Agent shall be taken under the control of any state or federal court or administrative body because of bankruptcy or insolvency, or for any other reason, and the Issuer shall not have appointed its successor, the Trustee shall ipso facto be deemed to be the successor Paying Agent for all purposes until another successor is appointed.
 
Section 8.19.   Trustee and Paying Agent Obligations Survive Final Payment or Defeasance .
 
Notwithstanding anything stated to the contrary in this Indenture, the respective duties and obligations of the Trustee and the Paying Agent shall survive any payment of all Outstanding 2008A Bonds hereunder in accordance with the terms of the 2008A Bonds or Article X hereof for a period of 124 days from the date of such payment, unless such payment is made with cash constituting Available Moneys.
 
Section 8.20                                 Certain Tax Reporting Requirements by Trustee .
 
(a)           The Trustee, on behalf of the Issuer, shall report to the Internal Revenue Service (the "IRS") and to the Registered Owners of the 2008A Bonds the amount of any interest and "reportable payments," as such term is defined in the Code, paid to Registered Owners during each calendar year and the amount of tax withheld, if any, with respect to payments on the 2008A Bonds.
 
(b)           The Trustee shall request that each Registered Owner and Beneficial Owner of the 2008A Bonds known to the Trustee furnish the Trustee with its taxpayer identification number ("TIN").
 
(c)           With respect to payments made on the 2008A Bonds, the Trustee shall withhold income tax from a "reportable payment," as such term is defined in the Code, to the extent required by the Code and regulations promulgated thereunder.
 
ARTICLE IX                                
 
AMENDMENTS AND SUPPLEMENTS
 
Section 9.1.   Amendments and Supplements Without Registered Owners’ Consent .
 
This Indenture may be amended or supplemented from time to time, without the consent of the Registered Owners by a Supplemental Indenture authorized by a certified resolution of the Issuer filed with the Trustee, for one or more of the following purposes:
 
(a)   to add additional covenants of the Issuer or to surrender any right or power herein conferred upon the Issuer; or
 
(b)   to cure any ambiguity or to cure, correct or supplement any defective (whether because of any inconsistency with any other provision hereof or otherwise) provision of this Indenture in such manner as shall not be inconsistent with this Indenture and shall not impair the security hereof or adversely affect the Registered Owners; or
 
(c)   to provide procedures permitting Registered Owners to utilize an uncertificated system of registration for 2008A Bonds or for the issuance of 2008A Bonds pursuant to a book entry system with a Securities Depository or other entity; or
 
(d)   to modify, alter, amend, supplement or restate this Indenture in any and all respects necessary, desirable or appropriate in order to satisfy the requirements of any Rating Agency which may from time to time provide a rating on the 2008A Bonds, or in order to obtain or retain such rating on the 2008A Bonds as is deemed necessary by the Company; or
 
(e)   to implement a conversion of the Rate Mode for the 2008A Bonds or to evidence or give effect to the delivery of a replacement Letter of Credit Facility for the 2008A Bonds or to provide for delivery of a Letter of Credit Facility or other form of credit or liquidity enhancement for the 2008A Bonds, including without limitation such changes to Section 5.8 as may be required by the provider of an Alternate Credit Facility; or
 
(f)   to make any change which, in the judgment of the Trustee, does not adversely affect the rights or security of the Registered Owners.
 
In determining compliance with this Section, the Trustee may request such certificates and opinions of counsel as it deems necessary and may rely conclusively on such certificates and opinions in the absence of negligence or willful misconduct.
 
Section 9.2.   Amendments With Company and Registered Owners’ Consent .
 
(a)   Consent of Majority .  With the written consent of the Company, the parties to this Indenture may enter into Indentures supplemental to this Indenture or amendments to this Indenture modifying, adding to or eliminating any of the provisions hereof but, if such supplement or amendment is not of the character described in Section 9.1, only with the consent of the Registered Owners of not less than a majority of the aggregate principal amount of the Outstanding 2008A Bonds, but subject to the limitations of Section 9.2(b).
 
(b)   Consent of All Bondholders .  Notwithstanding the foregoing, no supplement or amendment to this Indenture shall, without the consent of the Registered Owner of each Outstanding 2008A Bond so affected, (i) extend the maturity date of any 2008A Bond, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof, or reduce any premium payable upon the redemption thereof, or extend or reduce the amount of any mandatory redemption requirement, or change the purchase provisions thereof, (ii) deprive such Registered Owner of the lien hereof on the Revenues pledged hereunder and on the Trust Estate, (iii) decrease the amounts payable by the Company under Section 6.4 of the Loan Agreement, (iv) reduce the aggregate principal amount of 2008A Bonds the Registered Owners of which are required to approve any such supplement or amendment to this Indenture, (v) increase the percentage of the aggregate principal amount of 2008A Bonds the Registered Owners of which are required to direct the Trustee to accelerate the maturity of the 2008A Bonds, or (vi) provide a privilege or priority of any 2008A Bond over any other 2008A Bond.
 
(c)   Effective Date of Amendment .  The Trustee shall establish a record date for purposes of approval of any such amendment or supplement described in subsections (a) and (b) of this Section 9.2, and shall cause notice of such record date and such proposed amendment to be given to the Owners in the same manner as notices of redemption are given by the Trustee.  Such notice shall briefly set forth the nature of the proposed amendment and shall state that copies thereof are on file at the designated office of the Trustee for inspection by all Registered Owners.  If, within sixty (60) days (or such longer period as shall be prescribed by the Company in a written notice to the Trustee and the Issuer) following the mailing of such notice, the Registered Owners of the requisite aggregate principal amount of the Outstanding 2008A Bonds at the time of the record date established for such purpose shall have consented to and approved such amendment, no Registered Owner of any 2008A Bond shall have any right to object to any of the terms and provisions contained therein, or the operation thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or restrain the parties to such amendment from adopting the same or from taking any action pursuant to the provisions thereof.  Upon receipt of the consent of the Registered Owners of the requisite aggregate principal amount of the Outstanding 2008A Bonds, the Issuer and the Trustee may execute such amendment.
 
The consent of a Registered Owner shall be evidenced by an instrument executed by such Registered Owner, delivered to the Trustee, which instrument shall refer to the proposed amendment described in said notice and shall specifically consent to and approve such amendment.  Any consent given by a Registered Owner as of such record date shall be irrevocable for a period of six (6) months from the date such consent is given, and shall be conclusive and binding upon all future Registered Owners of the same 2008A Bond during such period.  Such consent may be revoked at any time after six (6) months from the date such consent was given by such Registered Owner or by a successor in title, by filing written notice thereof with the Issuer, the Company and the Trustee, but such revocation shall not be effective if the Registered Owners of the requisite aggregate principal amount of the Outstanding 2008A Bonds have, prior to the attempted revocation, consented to and approved such amendment.
 
Notwithstanding any provision herein to the contrary, no amendment to this Indenture which affects the rights or obligations of the Trustee shall be effective against the Trustee without its written consent.
 
Section 9.3.   Amendments to Loan Agreement .
 
The Loan Agreement may be amended by written agreement of the Issuer and the Company and with the written consent of the Trustee, provided that no amendment may be made which would adversely affect the rights of some but less than all Outstanding 2008A Bonds without the consent of (a) the Registered Owners of not less than a majority in aggregate principal amount of the 2008A Bonds then Outstanding and (b) the Registered Owners of not less than a majority in aggregate principal amount of the 2008A Bonds so affected; and no amendment may be made which would (i) decrease the amounts payable under the Loan Agreement as Installment Loan Payments; (ii) change any date of payment or prepayment provisions under the Loan Agreement; or (iii) change the amendment provisions of the Loan Agreement without the consent of all of the Registered Owners of the 2008A Bonds adversely affected thereby, and provided further that the Loan Agreement may be amended by written agreement of the Issuer and the Company and with the written consent of the Trustee, but not the Owners, in order to make conforming changes with respect to amendments made to this Indenture pursuant to Section 9.1(d), (e) or (f).
 
Section 9.4.   Right to Payment .
 
Notwithstanding any other provisions in this Indenture to the contrary, the right of the Owner of any 2008A Bond to receive payment of the principal of, and the premium, if any, and interest on, such 2008A Bond, on or after the respective due dates expressed herein, or to institute suit for the enforcement of any such payment on or after such respective dates, will not be impaired or affected without the consent of such Owner.
 
Section 9.5.   Amendment of Letter of Credit Facility .
 
If the Bank proposes to amend a Letter of Credit Facility, the Paying Agent may consent thereto, provided that (i) if such proposal would amend such Letter of Credit Facility in such a way as would materially adversely affect the interests of the Bondholders, the Paying Agent shall notify the Owners of the 2008A Bonds secured by such Letter of Credit Facility of the proposed amendment and may consent thereto only with the prior written consent of Owners of a majority in aggregate principal amount of such 2008A Bonds then Outstanding, and (ii) the Paying Agent shall not, without the unanimous consent of all Bondholders, consent to any amendment which would decrease the amounts payable under the Letter of Credit Facility securing such 2008A Bonds in respect of Outstanding 2008A Bonds secured by such Letter of Credit Facility on any Interest Payment Date or on the date of redemption, acceleration, payment at maturity or purchase of the 2008A Bonds, or advance the stated expiration date of such Letter of Credit Facility to an earlier date.  No consent of the Bondholders shall be required for amendments to a Letter of Credit Facility which are provided for or contemplated by this Indenture.  The Paying Agent shall provide notice to the Issuer of any amendment to a Letter of Credit Facility.
 
Section 9.6.   Bank Consent .
 
Notwithstanding any provision herein to the contrary, no amendments or supplements to the Bond Documents shall be entered into without the prior written consent of the Bank so long as the Bank is not in default under the Letter of Credit or the Reimbursement Agreement.
 
ARTICLE X                                
 
DEFEASANCE
 
Section 10.1.   Defeasance .
 
If the Issuer or Company shall pay or cause to be paid, or there shall be otherwise paid or provision for payment made to or for the Owners from time to time of the 2008A Bonds, the principal of, premium, if any, and interest due or to become due thereon on the dates and in the manner stipulated therein, and shall pay or cause to be paid to the Trustee all sums of money due or to become due according to the provisions hereof and if all other liabilities of the Company under the Loan Agreement and the Reimbursement Agreement shall have been satisfied, then these presents and the estate and rights hereby granted shall cease, determine and be void, whereupon the lien of this Indenture shall be canceled and discharged (except with respect to moneys held by the Trustee or Paying Agent hereunder for the payment of 2008A Bonds as aforesaid, and the rights and immunities of the Issuer, the Trustee and the Paying Agent hereunder), and upon written request of the Issuer or the Company, the Trustee shall execute and deliver to the Issuer such instruments in writing as shall be required by the Issuer or the Company to cancel and discharge the lien hereof and thereof, and reconvey, release, assign and deliver unto the Issuer and the Company, respectively, the estate, right, title and interest in and to any and all property conveyed, assigned or pledged to the Trustee or otherwise subject to the lien of this Indenture.  Notwithstanding anything contained in this Indenture to the contrary, the Trustee and Paying Agent shall comply with the provisions of Section 8.19 hereof in connection with any final payment of all outstanding 2008A Bonds hereunder.
 
Any 2008A Bond shall be deemed to be paid within the meaning of this Section 10.1 when payment of the principal of, and premium and tender purchase price payments, if any, on such 2008A Bond, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, upon redemption prior to maturity or upon optional or mandatory tender, as provided in this Indenture or otherwise), either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided by irrevocably depositing with the Trustee, in trust for the benefit of and subject to a security interest in favor of the owner of such 2008A Bond, and irrevocably setting aside exclusively for such payment on such due date, (1) moneys sufficient to make such payment, or (2) Government Obligations maturing as to principal and interest in such amounts and on such dates as will (together with any moneys held under clause (1)), in the written opinion to the Trustee from a firm of certified public accountants not unsatisfactory to the Trustee, provide sufficient moneys without reinvestment to make such payment, and if all necessary and proper fees, compensation and expenses of the Trustee pertaining to the 2008A Bonds with respect to which such deposit is made and all other liabilities of the Company under the Loan Agreement and the Reimbursement Agreement shall have been paid or the payment thereof provided for to the satisfaction of the Trustee; provided , however , that (x) such amount on deposit described in (1) or (2) above shall be deemed sufficient only if (A) while the 2008A Bonds bear interest at a Daily Rate, Weekly Rate or Monthly Rate, it provides for payment of interest on the 2008A Bonds at the maximum rate of 12% per annum and the Issuer shall have surrendered any power hereunder to thereafter change such maximum rate applicable to such 2008A Bonds, or (B) while the 2008A Bonds bear interest at a Term Rate, it provides for payment of interest on the 2008A Bonds at the current Term Rate and the 2008A Bonds mature or are scheduled to be redeemed at or prior to the expiration of the current Term Rate Period, (y) in the opinion of Bond Counsel, delivered to the Trustee and the Issuer, such deposit of Government Obligations described in (2) above will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the 2008A Bonds or cause any of the 2008A Bonds to be classified as "arbitrage bonds" within the meaning of Section 148 of the Code, and (z) any 2008A Bond shall be deemed to be paid only if (A) the Trustee and the Paying Agent hold in the Debt Service Fund (or a separate escrow account) cash constituting Available Moneys and/or such obligations purchased with Available Moneys for payment of such 2008A Bonds pursuant to Section 3.2 above in amounts sufficient, together with the earnings thereon, to make all payments specified above with respect to such 2008A Bonds, as verified by an accountant's certification in form and by an accountant not unacceptable to the Trustee and the Rating Service, and (B) in the case of 2008A Bonds bearing interest at a Daily Rate, Weekly Rate or Monthly Rate, the 2008A Bonds have been called for redemption on a date not more than sixty (60) days from the date provision for payment is being made pursuant to this Section.  Notwithstanding anything to the contrary in this Section 10.1, if provision is to be made for the payment of all, or less than all, of the Outstanding 2008A Bonds, the Trustee shall have received written confirmation from the Rating Service that any then-current ratings on the 2008A Bonds will not be reduced or withdrawn.  At such time as a 2008A Bond shall be deemed to be paid hereunder, as aforesaid, it shall no longer be secured by or entitled to the benefits of this Indenture, except for the purposes set forth in Sections 2.7 and 2.8 hereof and any such payment from such moneys or Government Obligations on the date or dates specified at the time of such deposit.
 
Notwithstanding the foregoing, in the case of 2008A Bonds which are to be redeemed prior to the maturity date, no deposit under clause (ii) of the immediately preceding paragraph shall be deemed a payment of such 2008A Bonds as aforesaid until proper notice of redemption of such 2008A Bonds shall have been previously given in accordance with Article V hereof, or until the Company, on behalf of the Issuer, shall have given the Trustee, in form satisfactory to the Trustee, irrevocable written instructions:
 
(a)   stating the redemption date when the principal (and premium, if any) of each such 2008A Bond is to be paid (which may be any redemption date permitted by this Indenture); and
 
(b)   to call for redemption pursuant to this Indenture any 2008A Bonds to be redeemed prior to the maturity date pursuant to (a) hereof.
 
In the case of 2008A Bonds which are not to be redeemed within the next succeeding sixty (60) days, the Trustee shall mail, as soon as practicable, in the manner prescribed by Article V hereof, a notice to the Owners of such 2008A Bonds that the deposit required by (ii) above has been made with the Trustee and that said 2008A Bonds are deemed to have been paid in accordance with this Section 10.1 and stating the redemption or maturity date upon which moneys are to be available for the payment of the redemption price on or principal of said 2008A Bonds.
 
Any moneys so deposited with the Trustee as provided in this Section 10.1 may at the written direction of the Company also be invested and reinvested in Government Obligations, maturing in the written opinion of a firm of certified public accountants delivered and not unsatisfactory to the Trustee in the amounts and on the dates as hereinbefore set forth, and all income from all Government Obligations in the hands of the Trustee pursuant to this Section 10.1 which, in the written opinion to the Trustee from a firm of certified public accountants not unsatisfactory to the Trustee, is not required for the payment of the 2008A Bonds and interest and premium, if any, thereon with respect to which such moneys are deposited, shall be deposited in the Debt Service Fund as and when collected for use and application as are other moneys deposited in that fund.
 
Anything in Article IX hereof to the contrary notwithstanding, if moneys or Government Obligations have been deposited or set aside with the Trustee pursuant to this Section 10.1 for the payment of the principal of, and premium and purchase price, if any, and interest on the 2008A Bonds and the principal of, and premium and purchase price, if any, and interest on such 2008A Bonds shall not have in fact been actually paid in full, no amendment to the provisions of this Section 10.1 shall be made without the consent of the Owner of each of the 2008A Bonds affected thereby.
 
If an agreement with a Securities Depository as described in Section 2.11 hereof is then in effect and such agreement provides for the Company to obtain a CUSIP number in the event of a partial refunding or redemption of the 2008A Bonds and the authentication of a new 2008A Bond for the refunded or redeemed 2008A Bonds, then the Company shall comply with the provisions of such agreement.
 
Section 10.2.   Effect of Defeasance .
 
Notwithstanding anything stated to the contrary in this Article, no defeasance hereunder shall relieve the Trustee or the Paying Agent of any duty with respect to, or discharge or terminate the provisions hereof with respect to, the payment, transfer, purchase, exchange, registration or redemption of 2008A Bonds, as the case may be.
 
ARTICLE XI                                
 
MISCELLANEOUS PROVISIONS
 
Section 11.1.   Limitations on Recourse; Immunity of Certain Persons .
 
No recourse shall be had for any claim based on this Indenture or the 2008A Bonds against any past, present or future member, officer, official or employee of the Issuer, either directly or through the Issuer or any such successor body, under any constitutional provision, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability and all such claims being hereby expressly waived and released as a condition of, and as consideration for, the execution of this Indenture and the issuance of the 2008A Bonds.  The 2008A Bonds are payable solely from the Revenues pledged hereunder and other moneys held by the Trustee hereunder for such purpose.  The Issuer shall be conclusively deemed to have complied with all of its covenants and other obligations hereunder, including but not limited to those set forth in Articles III and VI hereof, upon requiring the Company in the Loan Agreement to agree to perform such Issuer covenants and other obligations (excepting only any approvals or consents permitted or required to be given by the Issuer hereunder, and any exceptions to the performance by the Company of the Issuer’s covenants and other obligations hereunder, as may be contained in the Loan Agreement).  However, nothing contained in any such agreement in the Loan Agreement shall prevent the Issuer from time to time, in its discretion, from performing any such covenants or other obligations.  The Issuer shall have no liability for any failure to fulfill, or breach by the Company of, the Company’s obligations under the 2008A Bonds, this Indenture, the Loan Agreement, or otherwise, including without limitation the Company’s obligation to fulfill the Issuer’s covenants and other obligations under this Indenture.
 
Section 11.2.   Deposit of Funds for Payment of 2008A Bonds .
 
If the principal or redemption price of any 2008A Bonds becoming due, either at maturity or by call for redemption or otherwise, together with all interest accruing thereon to the due date, has been paid or provision therefor made in accordance with Section 10.1, all interest on such 2008A Bonds shall cease to accrue on the due date and all liability of the Issuer with respect to such 2008A Bonds shall likewise cease, except as hereinafter provided.  Thereafter the Owners of such 2008A Bonds shall be restricted exclusively to the funds so deposited for any claim of whatsoever nature with respect to such 2008A Bonds, and the Trustee shall hold such funds in trust for such owners.
 
Other than moneys held in the Letter of Credit Debt Service Account and the Letter of Credit Purchase Account which shall be distributed pursuant to Section 3.3 hereof, moneys which remain unclaimed two years after the due date shall, subject to any applicable provisions of law relating to escheat of property, at the written request of the Company, and if the Company is not, at the time, to the knowledge of the Trustee, in default with respect to any covenant in the Loan Agreement or the 2008A Bonds, be paid to the Company, and the owners of the 2008A Bonds for which the deposit was made shall thereafter be limited to a claim against the Company.  Such moneys while held by the Trustee shall be held in trust uninvested.  Before being required to make a payment to the Company under this Section 11.2, the Trustee shall be entitled to receive at the Company’s expenses an opinion of Counsel to the effect that such payment is permitted under the provisions of Pennsylvania law.  In the absence of any such written request from the Company, the Trustee shall from time to time deliver such unclaimed funds to or as directed by pertinent escheat authority, as identified by the Trustee in its sole discretion, pursuant to and in accordance with applicable unclaimed property laws, rules or regulations.  Any such delivery shall be in accordance with the customary practices and procedures of the Trustee and the escheat authority.  Any money held by the Trustee pursuant to this Section 11.2 shall be held uninvested and without any liability for interest.
 
Section 11.3.   No Rights Conferred on Others .
 
Nothing herein contained shall confer any right upon any Person other than the parties hereto, the Company and the Registered Owners of the 2008A Bonds.
 
Section 11.4.   Illegal, Etc. Provisions Disregarded .
 
If any term or provision of this Indenture or the 2008A Bonds or the application thereof for any reason or circumstances shall to any extent be held invalid or unenforceable, the remaining provisions or the application of such term or provision to persons and situations other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision hereof and thereof shall be valid and enforced to the fullest extent permitted by law.
 
Section 11.5.   Substitute Publication of Notice .
 
If for any reason it shall be impossible to make publication of any notice required hereby in a newspaper or newspapers, then such publication in lieu thereof as shall be made with the approval of the Trustee shall constitute a sufficient publication of such notice.
 
Section 11.6.   Mailed Notice .
 
All notices required or authorized to be given to the Company, the Issuer and the Trustee pursuant to this Indenture shall be in writing and shall be given as provided herein or delivered by hand or overnight courier service or mailed by first class, registered or certified mail, return receipt requested, postage prepaid, or sent by telecopy with evidence of receipt confirmed to the sender, to the following address:
 
(a)   to the Company, to:
 
The York Water Company
130 East Market Street
Box 15089
York, PA 17405-7089
Attention:  President and CEO
Telecopy No.  (717) 852-0058

(b)   to the Issuer, to:
 
Pennsylvania Economic Development Financing Authority
Department of Community and Economic Development
Commonwealth Keystone Building
400 North Street, 4 th Floor
Harrisburg, PA  17120-0225
Attention:  Executive Director
Telecopy No. (717) 787-0879

(c)   to the Trustee and initial Paying Agent, to:
 
Manufacturers and Traders Trust Company
213 Market Street
Harrisburg, PA  17101
Attention:  Corporate Trust Department
Telecopy No. (717) 231-2615

(d)   to the Remarketing Agent, to:
 
PNC Capital Markets, Inc.
1600 Market Street – 21 st Floor
Philadelphia, PA  19103
Attention:  Manager, Municipal Remarketing
Telecopy No. (215) 585-1463

(e)   to the Bank, to:
 
PNC Bank, National Association
PNC Corporate Banking
4242 Carlisle Pike
Camp Hill, PA  17011
Attention:  Vice President
Telecopy No.  (717) 730-2387

(f)   to S&P, to:
 

Standard & Poor’s
55 Water Street, 42 nd Floor
New York, NY  10041-0003
Attention:  LOC Surveillance
E-mail:  NYLOC@STANDARDANDPOORS.COM

or to such other addresses as may from time to time be furnished to the parties, effective upon the receipt of notice thereof given as set forth above.
 
Section 11.7.   Governing Law .
 
This Indenture shall be governed, in all respects including validity, interpretation and effect by, and shall be enforceable in accordance with, the laws of the United States of America and of the Commonwealth.
 
Section 11.8.   Successors and Assigns .
 
All the covenants, promises and agreements in this Indenture contained by or on behalf of the Issuer or by or on behalf of the Trustee shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not.
 
Section 11.9.   Action by Company .
 
Any requirement imposed by this Indenture or the Loan Agreement on the Issuer may, if not performed by the Issuer, be performed by the Company and such performance by the Company shall constitute compliance with the requirements of this Indenture or the Loan Agreement as if performed by the Issuer.
 
Section 11.10.   Headings and Subheadings for Convenience Only .
 
The table of contents and descriptive headings and subheadings in this Indenture are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
 
Section 11.11.   Counterparts .
 
This Indenture may be executed in any number of counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument.
 
Section 11.12.   Additional Notices to Rating Agencies .
 
The Trustee hereby agrees that if at any time (a) there is a change in the Trustee or the Remarketing Agent (b) there are any amendments to the Indenture or the Loan Agreement or the Letter of Credit or (c) all or any part of the principal of the 2008A Bonds is paid, the Trustee shall use its best efforts to promptly give notice as provided in Section 11.6 hereof of any such event to each Rating Agency then maintaining a rating on the 2008A Bonds, which notice in the case of an event described in clause (b) above shall include a copy of any such amendment.  The agreement contained in this paragraph is made as a matter of courtesy and accommodation only and the Trustee shall have no liability to any person for any failure to comply therewith.   S&P shall receive notice upon expiration, termination, substitution or extension of the Letter of Credit and notice upon conversion to a different Mode.
 

 
 
 
 
 

IN WITNESS WHEREOF, the Issuer and Trustee have caused this Indenture of Trust to be executed in their respective corporate names and caused their respective corporate seals to be hereunto affixed and attested by their respective duly authorized officers or representatives, as of the day first above written.
 
 
 
PENNSYLVANIA ECONOMIC DEVELOPMENT
FINANCING AUTHORITY
 
Attest:      
By: /s/Craig S. Petrasic
By:
/s/Stephen M. Drizos  
Craig S. Petrasic    Stephen M. Drizos  
Assistant Secretary    Executive Director  
       
       
 

 
MANUFACTURERS AND TRADERS TRUST COMPANY,  as Trustee
 
Attest:      
By: /s/Adnan Ahmad
B y:
/s/James C. Deitrick    
Adnan Ahmad    James C. Deitrick  
Assistant Vice President    Vice President  
       
       
 

 
 
 
 

EXHIBIT A
 
(FORM OF 2008A BOND)
 

 
SEE TAB#______
 

 
 
 
 

EXHIBIT B
 
DTC LETTER OF REPRESENTATION
 

SEE TAB #____


 
 
 
 

EXHIBIT C

FORM OF NOTICE OF TENDER


TO:


NOTICE OF TENDER


PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY
EXEMPT FACILITIES REFUNDING 2008A BONDS, SERIES 2008
(THE YORK WATER COMPANY PROJECT)


DESCRIPTION OF 2008A BONDS TO BE TENDERED


(Please complete the following information.  Attach an additional list if necessary).

Name and Address of Owner
 
 
 
 
 
Numbers of 2008A Bonds Tendered (optional, if available)
 
R-                                            
Portion of Principal
Amount Tendered
 
R-                                            

Tender Date:                                           
Payment Instructions:                                                                           



The undersigned Owner of the above-listed 2008A Bonds hereby irrevocably demands the purchase of the above-listed 2008A Bonds in the Principal Amount(s) Tendered shown above (which Principal Amount(s) Tendered is either the principal amount of such 2008A Bond or an integral multiple of $5,000 in excess of $100,000), on the Tender Date specified above.

The undersigned hereby agrees to deliver the above-listed 2008A Bonds to the Paying Agent at Harrisburg, Pennsylvania on or prior to the Tender Date and acknowledges that this Notice of Tender constitutes (i) an irrevocable offer to sell the 2008A Bond (or portion of the Principal Amount thereof) to which this Notice relates on the Tender Date to any purchaser selected by the Remarketing Agent, at a price equal to the principal amount of such 2008A Bond (or portion of the Principal Amount thereof) plus any interest thereon accrued and unpaid as of the Tender Date, if the Tender Date is not an Interest Payment Date, (ii) an irrevocable authorization and instruction to the Paying Agent to effect transfer of such 2008A Bond (or portion of the Principal Amount thereof) upon payment of such price to the Paying Agent on the Tender Date, (iii) an irrevocable authorization and instruction to the Paying Agent to effect the exchange of such 2008A Bond to be purchased in whole or in part for other 2008A Bonds in an equal aggregate principal amount so as to facilitate the sale of such 2008A Bond (or portion of the Principal Amount thereof to be purchased), and (iv) an acknowledgment that the Bondholder will have no further rights with respect to such 2008A Bond (or portion of the Principal Amount thereof) upon payment of the Tender Price thereof to the Paying Agent on the Tender Date, except for the right of such holder to receive such Tender Price upon surrender of such 2008A Bond to the Paying Agent endorsed for transfer in blank and with guarantee of signatures satisfactory to the Paying Agent, and that after the Tender Date the Bondholder will hold such 2008A Bond (or portion of the Principal Amount thereof) as agent for the Paying Agent.

Capitalized terms not otherwise defined herein shall have the meanings given such terms in the Trust Indenture under which the above-listed 2008A Bonds were issued.


SIGN HERE

Dated:                                                      , 20__
Signature(s) of Bondholder(s)

(Must be signed by Bondholder exactly as name appears on 2008A Bonds or by the attorney of such Bondholder duly authorized in writing by certificates and documents transmitted herewith.  If signature is by trustee, executor, administrator, guardian, attorney-in-fact, officer or corporation or others acting in a fiduciary or representative capacity, please set forth full title)

Name(s)                                           
(Please Print)

Capacity                                           

Address                                           
(including Zip Code)

(Area Code and Tel.  No.)                                                      

(Tax Identification Number)                                                      


Please contact Manufacturers and Traders Trust Company, Paying Agent, telephone:  717/231-2613, or PNC Capital Markets, Inc., Philadelphia, Pennsylvania, Remarketing Agent, telephone:  215/585-1441, with questions regarding this Notice of Tender.



 
 
 
 

EXHIBIT 10.3
 

REIMBURSEMENT, CREDIT AND SECURITY AGREEMENT
 
Between
 
THE YORK WATER COMPANY
 
and
 
PNC BANK, NATIONAL ASSOCIATION
 
Dated as of
 
May 1, 2008
 
$12,000,000
Pennsylvania Economic Development Financing Authority
Exempt Facilities Revenue Refunding Bonds,
Series A of 2008
(The York Water Company Project)
 

 
 
 

TABLE OF CONTENTS
 
 
ARTICLE I DEFINITIONS 
 
Section 1.01  Definitions.
 
Section 1.02  Accounting Principles.
 
Section 1.03  Rules of Construction.
 
Section 1.04  Incorporation of Recitals.
 
ARTICLE II LETTER OF CREDIT AND REIMBURSEMENT 
 
Section 2.01  Issuance of Letter of Credit.
 
Section 2.02  Reimbursement and Other Payments.
 
Section 2.03  Transfer; Reduction; Reinstatement.
 
Section 2.04  Nature of Obligations.
 
Section 2.05  Indemnification.
 
ARTICLE III SECURITY 
 
Section 3.01  Security and Subrogation under Indenture.
 
Section 3.02  Pledge of Rights to Certain Funds and Investments.
 
Section 3.03  Pledged Bonds.
 
ARTICLE IV CONDITIONS PRECEDENT 
 
Section 4.01  Closing Fee.
 
Section 4.02  Documentation.
 
Section 4.03  Issuance of Bonds.
 
ARTICLE V REPRESENTATIONS AND WARRANTIES 
 
Section 5.01  Existence.
 
Section 5.02  Power, Authorization and No Conflicts.
 
Section 5.03  Governmental and Other Approvals.
 
Section 5.04  Validity, Binding Effect and Enforceability.
 
Section 5.05  No Litigation.
 
Section 5.06  No Violations.
 
Section 5.07  Reserved.
 
Section 5.08  No Liens.
 
Section 5.09  Reserved.
 
Section 5.10  Financial Condition; No Material Adverse Change.
 
Section 5.11  Plans and Benefit Arrangements.
 
Section 5.12  Environmental Compliance.
 
Section 5.13  Disclosure.
 
Section 5.14  Anti-Terrorism Laws.
 
Section 5.15  Incorporation of Representations and Warranties by Reference.
 
Section 5.16  Use of Proceeds; Margin Stock; Section 20 Subsidiaries.
 
Section 5.17  Material Adverse Change.
 
Section 5.18  Condition of and Title to Assets; Status of Leases.
 
Section 5.19  Insurance.
 
Section 5.20  Taxes.
 
Section 5.21  No Event of Default; Compliance with Instruments.
 
Section 5.22  Patents, Trademarks, Copyrights, Licenses, Etc.
 
ARTICLE VI GENERAL COVENANTS 
 
Section 6.01  Maintenance of Existence.
 
Section 6.02  Compliance with Laws, Etc.
 
Section 6.03  Maintenance of Insurance.
 
Section 6.04  Compliance with Bond Documents and Other Contracts.
 
Section 6.05  Visitation Rights.
 
Section 6.06  Keeping of Books.
 
Section 6.07  Maintenance of Properties.
 
Section 6.08  Reporting Requirements.
 
Section 6.09  Consent Under Bond Documents.
 
Section 6.10  Reserved.
 
Section 6.11  Payment of Indebtedness.
 
Section 6.12  Environmental Covenants.
 
Section 6.13  Financial Covenants.
 
Section 6.14  Payments of Taxes and Other Charges.
 
Section 6.15  Reserved.
 
Section 6.16  Reserved.
 
Section 6.17  ERISA.
 
Section 6.18  Amendments to Bond Documents.
 
Section 6.19  Liens and Encumbrances.
 
Section 6.20  Change in Business.
 
Section 6.21  Limitation on Optional Calls.
 
Section 6.22  Reserved.
 
Section 6.23  Anti-Terrorism Laws.
 
ARTICLE VII RESERVED
 
ARTICLE VIII DEFAULTS AND REMEDIES
 
Section 8.01  Defaults.
 
Section 8.02  Remedies.
 
Section 8.03  Waivers; Consents.
 
Section 8.04  No Waiver; Remedies Cumulative.
 
Section 8.05  Set-Off.
 
ARTICLE IX GENERAL PROVISIONS
 
Section 9.01  Notices.
 
Section 9.02  Successors and Assigns.
 
Section 9.03  Survival of Covenants.
 
Section 9.04  Counterparts.
 
Section 9.05  Costs, Expenses and Taxes.
 
Section 9.06  Amendments and Waivers.
 
Section 9.07  Severability; Interest Limitation.
 
Section 9.08  Complete Agreement.
 
Section 9.09  Participation.
 
Section 9.10  Governing Law and Jurisdiction.
 
Section 9.11  Headings.
 
Section 9.12  WAIVER OF JURY TRIAL.

 
 
 

EXHIBITS
 
A           Form of Letter of Credit
B           Requirements for Opinions of Counsel
 

 
 
 

REIMBURSEMENT, CREDIT AND SECURITY AGREEMENT
 
THIS REIMBURSEMENT, CREDIT AND SECURITY AGREEMENT (this " Agreement "), made as of the 1st day of May, 2008, between THE YORK WATER COMPANY (the " Borrower "), a corporation organized and existing under the laws of the Commonwealth of Pennsylvania, and PNC BANK, NATIONAL ASSOCIATION (the " Bank "), a national banking association.
 
RECITALS:
 
A.           The Pennsylvania Economic Development Financing Authority (the " Issuer ") has issued its Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project) in the aggregate principal amount of $12,000,000 (the " Bonds ") under a Trust Indenture dated as of May 1, 2008 (the " Indenture ") between the Issuer and Manufacturers and Traders Trust Company, as Trustee (including any successor trustee, the " Trustee ").
 
B.           Pursuant to a Loan Agreement dated as of May 1, 2008 between the Issuer and the Borrower (the " Loan Agreement "), the proceeds of the Bonds are being applied to refund the Issuer's previously issued Exempt Facilities Revenue Bonds Series B of 2004 (The York Water Company Project) in the outstanding principal amount of $12,000,000.  Under the Loan Agreement, the Borrower is obligated to make loan payments to the Trustee in amounts and at the times corresponding to the debt service and other payments required in respect of the Bonds.
 
C.           In order to facilitate the issuance and sale of the Bonds and to enhance the marketability of the Bonds and thereby achieve interest cost savings and other savings to the Borrower, the Borrower has asked the Bank to issue its Irrevocable Letter of Credit (together with any substitute letter of credit issued pursuant to the terms hereof, the " Letter of Credit ") to the Trustee for the account of the Borrower authorizing the Trustee to make one or more draws on the Bank up to an aggregate of $12,185,425 (as reduced and reinstated from time to time in accordance with the provisions of the Letter of Credit, the " Letter of Credit Amount "), of which originally (i) $12,000,000 shall be in respect of principal of the Bonds (as more fully defined in Section 1.01, the " Principal Component ", and (ii) $185,425 (as more fully defined in Section 1.01, the " Interest Component ") shall be in respect of accrued interest on the Bonds.  The purpose of the Letter of Credit is to provide funds for the payment of principal of and interest on the Bonds and the purchase price of Bonds which have been tendered pursuant to the tender option provisions thereof and of the Indenture to the extent remarketing proceeds or other funds are not available therefor in accordance with the provisions of the Indenture.
 
D.           The Bank is willing to issue the Letter of Credit upon the terms and conditions hereinafter set forth.
 
NOW THEREFORE , in consideration of the foregoing and the undertakings herein set forth and intending to be legally bound, the Borrower and the Bank hereby agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
Section 1.01   Definitions .
 
(a)   Terms Defined in Recitals .   In this Agreement (except as otherwise expressly provided for or unless the context otherwise requires), the following terms have the meanings specified in the foregoing recitals:
 
Agreement
Bank
Bonds
Borrower
Indenture
Interest Component
Issuer
Letter of Credit
Letter of Credit Amount
Loan Agreement
Principal Component
Trustee
 
(b)   Other Defined Terms .   The following terms shall have the meanings specified in this Article, unless the context otherwise requires:
 
" Affiliate " means (i) any Person included with the Borrower in a controlled group of corporations within the meaning of Section 414(b) of the Code and (ii) any trade or business (whether or not incorporated or for-profit) which is under common control with the Borrower within the meaning of Section 414(c) of the Code.
 
" Alternate Credit Facility " shall have the meaning assigned to such term in the Indenture.
 
" Anti-Terrorism Laws " shall mean any Laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA Patriot Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by the United States Treasury Department's Office of Foreign Asset Control (as any of the foregoing Laws may from time to time be amended, renewed, extended, or replaced).
 
" Authorized Person " means the President and Chief Executive Officer or the Chief Financial Officer and Treasurer of the Borrower.
 
" Bank Documents " means this Agreement, the Letter of Credit and any other agreements or instruments relating to this Agreement or the Letter of Credit.
 
" Base Rate " shall mean a fluctuating rate of interest per annum, calculated on the basis of a 360-day year, and the actual number of days, equal to the higher of the Prime Rate or the Overnight Effective Federal Funds Rate for such day plus .50%.
 
" Benefit Arrangement " shall mean at any time an "employee benefit plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor a Multiemployer Plan and which is maintained, sponsored or otherwise contributed to by any member of the ERISA Group.
 
" Blocked Person " shall have the meaning ascribed to such term in Section 5.14.
 
" Bond Documents " means the Bonds, the Indenture, the Letter of Credit, the Loan Agreement, the Remarketing Agreement and any other agreements or instruments relating thereto.
 
" Business Day " means any day other than (i) a Saturday or Sunday, (ii) a day on which commercial banking institutions in Pittsburgh, Pennsylvania or in any other city where either the principal corporate trust office of the Trustee or the office of the Bank at which drafts are to be presented under the Letter of Credit is located are required or authorized by law (including executive order) to close or on which any such office is closed for reasons not related to financial condition, or (iii) a day on which the New York Stock Exchange is closed.
 
" Code " means the Internal Revenue Code of 1986 and the rules and regulations thereunder, including any amendments and successor provisions thereto.
 
" Contamination " means the uncontained presence of Hazardous Substances at the Borrower's Facilities, or arising from the Premises, which may require remediation under any applicable Law.
 
" Date of Issuance " means the date on which the Letter of Credit is issued upon request of the Borrower pursuant to Section 2.01.
 
" Default " means any event or occurrence that, with the giving of notice, the passage of time or both, would become an Event of Default.
 
" Default Rate " shall mean a fluctuating rate of interest equal to the Base Rate plus two (2%) percent per annum.
 
" Drawing " has the meaning assigned to that term in the Letter of Credit.
 
" Drawing Date " means the date on which the Bank honors a Drawing.
 
" Environmental Complaint " shall mean any written complaint setting forth a cause of action for personal or property damage, natural resource damage or equitable relief, order, notice of violation, citation, request for information issued pursuant to any Environmental Laws by an Official Body, subpoena or other written notice of any type relating to, arising out of, or issued pursuant to, any of the Environmental Laws or any Environmental Conditions, as the case may be.
 
" Environmental Conditions " shall mean any conditions of the environment, including the workplace, the ocean, natural resources (including flora or fauna), soil, surface water, groundwater, any actual or potential drinking water supply sources, substrata or the ambient air, relating to or arising out of, or caused by, the use, handling, storage, treatment, recycling, generation, transportation, release, spilling, leaking, pumping, emptying, discharging, injecting, escaping, leaching, disposal, dumping, threatened release or other management or mismanagement of Regulated Substances resulting from the use of, or operations on, any Premises.
 
" Environmental Laws " means all provisions of Laws, permits, licenses, awards and standards promulgated by any Official Body relating to pollution or protection of human health or the environment or employee safety in the work place.
 
" ERISA " means the Employee Retirement Income Security Act of 1974, as it may from time to time be amended, supplemented or otherwise modified, or any successor legislation, and the rules and regulations thereunder.
 
" ERISA Group " shall mean, at any time, the Borrower and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control and all other entities which, together with the Borrower, are treated as a single employer under Section 414 of the Internal Revenue Code.
 
" Event of Default " shall have the meaning assigned to such term in Section 8.01.
 
" Executive Order No. 13224 " shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.
 
" Expiration Date " has the meaning assigned to such term in the Letter of Credit.
 
" Final Payment Drawing " has the meaning assigned to such term in the Letter of Credit.
 
" Financial Statements " means the Borrower's consolidated and consolidating balance sheets and statements of income and cash flows for the year or quarter prepared in accordance with GAAP on a basis consistent with prior years, unless specifically noted thereon.
 
" Fiscal Year " means the annual accounting year of the Borrower, which currently begins on January 1 in each calendar year.
 
" Funded Debt " shall have the meaning set forth in Section 6.13.
 
" GAAP " means generally accepted accounting principles consistently applied on a consistent basis both as to classification of items and amounts.
 
" Indebtedness " means individually and collectively (i) all obligations and indebtedness of the Borrower for borrowed money including but not limited to the Obligations; (ii) all obligations of the Borrower evidenced by bonds, debentures, notes, or similar instruments; (iii) all obligations of the Borrower under conditional sale or other title retention agreements relating to property purchased by the Borrower; (iv) all obligations of the Borrower issued or assumed as the deferred purchase price of property or services; (v) all obligations of the Borrower under capitalized leases; (vi) all obligations of the Borrower with respect to letters of credit (including the Letter of Credit), whether matured or contingent; (vii) all obligations of the Borrower under any agreement or arrangement designed to provide protection against fluctuations in interest rates; (viii) all obligations of others secured by any Lien on property or assets owned or acquired by the Borrower, whether or not the obligations secured thereby have been assumed; and (ix) all guaranties of the Borrower; provided , however , that "Indebtedness" shall not include the Borrower's accounts payable incurred in the ordinary course of business if those accounts payable do not constitute obligations to repay borrowed money.
 
" Indemnified Party " shall have the meaning assigned to such term in Section 2.05.
 
" Ineligible Securities " shall mean any security which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
 
" Interest Component " shall have the meaning assigned to such term in the Letter of Credit.
 
" Interest Trigger Date " shall have the meaning assigned to such term in Section 2.02(b)(i).
 
" Interest Drawing " shall have the meaning assigned to such term in the Letter of Credit.
 
" Law "   means any law, statute, rule, regulation, treaty, ordinance, order, writ, injunction, decree, judgment, guideline, directive or decision of any Official Body, including any Environmental Law, whether in existence on the date hereof or whether issued, enacted or adopted after the date hereof, and any change therein or in the interpretation or application thereof following the date hereof.
 
" Letter of Credit Fee " shall have the meaning set forth in Section 2.02(d).
 
" LIBOR " shall mean, for each Reset Date, the interest rate per annum determined by the Bank by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by the Bank which has been approved by the British Bankers’ Association as an authorized information vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank deposit market (an " Alternate Source "), at approximately 11:00 a.m., London time, two (2) Business Days prior to such Reset Date, as the one (1) month   London interbank offered rate for U.S. Dollars commencing on such Reset Date (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Bank at such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the LIBOR Reserve Percentage.  LIBOR shall be adjusted on and as of (a) each Reset Date, and (b) the effective date of any change in the LIBOR Reserve Percentage.  The Bank shall give prompt notice to the Borrower of LIBOR as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.
 
" LIBOR Reserve Percentage " shall mean the maximum effective percentage in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including, without limitation, supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as " Eurocurrency liabilities ").
 
" Lien " means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any capitalized lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction).
 
" Liquidity Drawing " has the meaning assigned to such term in the Letter of Credit.
 
" Liquidity Period " means the period beginning on the date hereof and terminating on the first to occur of (i) the Expiration Date, or (ii) the first date on which there are no longer any Bonds Outstanding other than Bonds secured by an Alternate Credit Facility.
 
" Material Adverse Change " means any set of circumstances or events which (i) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of any of the Transaction Documents, (ii) is or could reasonably be expected to be material and adverse to the business, properties, assets, financial condition, results of operations or prospects of the Borrower, (iii) impairs materially or could reasonably be expected to impair materially the ability of the Borrower to duly and punctually pay or perform the Obligations, or (iv) impairs materially or could reasonably be expected to impair materially the ability of the Bank to enforce the Bank's legal remedies pursuant to any of the Bank Documents.
 
" Multiemployer Plan " shall mean any employee benefit plan which is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to which the Borrower or any member of the ERISA Group is then making or accruing an obligation to make contributions or, within the preceding five Plan years, has made or had an obligation to make such contributions.
 
" Multiple Employer Plan " shall mean a Plan which has two or more contributing sponsors (including the Borrower or any member of the ERISA Group) at least two of whom are not under common control, as such a plan is described in Sections 4063 and 4064 of ERISA.
 
" Net Income " shall have the meaning given it in Section 6.13.
 
" Obligations " means all loans, advances, debts, liabilities, obligations, covenants and duties owing from the Borrower to the Bank or to any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., of every kind or nature, present or future (including any interest accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), including those evidenced by or described in the Bank Documents, whether or not evidenced by any note, guaranty or other instrument, whether arising under any agreement, instrument or document, whether or not for the payment of money, whether arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, under any interest or currency swap, future, option or other interest rate protection or similar agreement, or in any other manner, whether arising out of overdrafts on deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of the Bank's non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, and any amendments, extensions, renewals or increases and all costs and expenses of the Bank incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including reasonable attorney's fees and expenses.
 
" Official Body " means any national, federal, state, local or other government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
 
" Outstanding " when applied to the Bonds shall have the meaning assigned to such term in the Indenture.
 
" Overnight Effective Federal Funds Rate " for any day shall mean the rate per annum (based on a year of 360 days and actual days elapsed and rounded to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announced the weighted average it refers to as the "Federal Funds Effective Rate" as of the date of this Agreement, provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the "Federal Funds Effective Rate" for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.
 
" Participating Banks " shall have the meaning assigned to such term in Section 9.09.
 
" PBGC " means the Pension Benefit Guaranty Corporation established pursuant to ERISA.
 
" Permitted Liens " means:
 
(i)           Liens in favor of the Bank; and
 
(ii)           Excepted Encumbrances as defined in the Loan Agreement.
 
" Person " shall mean any individual, sole proprietorship, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, association, joint venture, Official Body or agency thereof, or any other entity.
 
" Plan " shall mean at any time an employee pension benefit plan (including a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained by any entity which was at such time a member of the ERISA Group for employees of any entity which was at such time a member of the ERISA Group.
 
" Pledged Bonds " means any Bonds delivered to or for the account of the Bank in connection with a Liquidity Drawing under the Letter of Credit.
 
" Premises " shall mean any real property owned or leased by the Borrower.
 
" Prime Rate " means the rate of interest publicly announced by the Bank from time to time as the Prime Rate of the Bank effective in Pittsburgh, Pennsylvania, adjusted as of the date of an announcement in Pittsburgh, Pennsylvania of any change in such Prime Rate.  The Prime Rate is determined from time to time by the Bank as a means of pricing some loans to its borrowers and neither is tied to any external rate of interest or index, nor necessarily reflects the lowest rate of interest actually charged by the Bank to any particular class or category of customer.  If and when the Prime Rate changes, the rate of interest with respect to any amounts hereunder to which the Prime Rate applies will change automatically without notice to the Borrower, effective on the date of any such change.
 
" Principal Component " shall have the meaning assigned to such term in the Letter of Credit.
 
" Principal Drawing " shall have the meaning assigned to such term in the Letter of Credit.
 
" Prohibited Transaction " shall mean any prohibited transaction as defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for which neither an individual nor a class exemption has been issued by the United States Department of Labor.
 
" Regulated Substances " means any substance, including any solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive material, refuse, garbage, wastes, chemicals, petroleum products, by-products, coproducts, impurities, dust, scrap, heavy metals, defined as a "hazardous substance," "pollutant," "pollution," "contaminant," "hazardous or toxic substance," "extremely hazardous substance," "toxic chemical," "toxic waste," "hazardous waste," "industrial waste," "residual waste," "solid waste," "municipal waste," "mixed waste," "infectious waste," "chemotherapeutic waste," "medical waste," or regulated substance or any related materials, substances or wastes as now or hereafter defined pursuant to any Environmental Laws or other directives of any Official Body, the generation, manufacture, extraction, processing, distribution, treatment, storage, disposal, transport, recycling, reclamation, use, reuse, spilling, leaking, dumping, injection, pumping, leaching, emptying, discharge, escape, release or other management or mismanagement of which is regulated by the Environmental Laws.
 
" Remarketing Agent " means PNC Capital Markets LLC, and any successor in such capacity pursuant to the Indenture.
 
" Remarketing Agreement " means the Remarketing Agent's agreement with the Borrower to perform its duties as Remarketing Agent under the Indenture.
 
" Reset Date " shall mean (i) an Interest Trigger Date, and (ii) subject to the proviso below, the first day of every month thereafter, provided that: (a) if any such day is not a Business Day, then the first succeeding day that is a Business Day shall instead apply, unless that day falls in the next succeeding calendar month, in which case the next preceding day that is a Business Day shall instead apply, and (b) if any such day is a day of a calendar month for which there is no numerically corresponding day in certain other months (each, a " Non-Conforming Month "), then any Reset Date that falls within a Non-Conforming Month shall be the last day of such Non-Conforming Month.
 
" Scheduled Expiration Date " has the meaning assigned to such term in the Letter of Credit.
 
" Section 20 Subsidiary "   means the Subsidiary of the bank holding company controlling the Bank, which Subsidiary has been granted authority by the Federal Reserve Board to underwrite and deal in certain Ineligible Securities.
 
" State " means the Commonwealth of Pennsylvania.
 
" Transaction Documents "   means the Bank Documents and the Bond Documents, and all extensions, renewals, amendments, substitutions and replacements to and of any of the foregoing.
 
" Uniform Commercial Code " means the Uniform Commercial Code as adopted and in effect from time to time in the State, except when the provisions of the Uniform Commercial Code as adopted in another jurisdiction are applicable due to the location of any Collateral in such other jurisdiction.
 
" USA Patriot Act " shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.
 
Section 1.02   Accounting Principles
 
.  Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters and all financial statements to be delivered pursuant to this Agreement shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP; provided, however , that all accounting terms used in Article VI shall have the meaning given to such terms under GAAP as in effect on the date hereof applied on a basis consistent with those used in preparing the Financial Statements referred to in Section 6.08.  In the event of any change after the date hereof in GAAP, and if such change would result in the inability to determine compliance with the financial covenants (if any) set forth in Article VI based upon the Borrower's regularly prepared financial statements by reason of the preceding sentence, then the parties hereto agree to endeavor, in good faith, to agree upon an amendment to this Agreement that would adjust such financial covenants in a manner that would not affect the substance thereof, but would allow compliance therewith to be determined in accordance with the Borrower's financial statements at that time.
 
Section 1.03   Rules of Construction .
 
(i)   Except as otherwise specified, all references in any Bank Document (A) to any Person shall be deemed to include such Person's heirs, executors, administrators, successors and assigns, (B) to any Law shall be deemed references to such Law as the same may have been or may be amended, supplemented or replaced from time to time, and (C) to any Transaction Document defined or referred to herein shall be deemed references to such Transaction Document as the terms thereof may have been or may be amended, supplemented, waived or otherwise modified from time to time.
 
(ii)   When used in any Bank Document, the words "herein", "hereof" and "hereunder" and words of similar import shall refer to such Bank Document as a whole and not to any particular provision of such Bank Document, and the words "Article", "Section", "Subsection", "Schedule", "Exhibit" and "Annex" shall refer to Articles, Sections and Subsections of, and Schedules, Exhibits and Annexes to, such Bank Document, unless otherwise specified.
 
(iii)   When used in any Bank Document, the word "including" means "including without limitation".
 
(iv)   Whenever the context so requires, in all Bank Documents the use of or reference to any gender includes the masculine, feminine and neuter genders, and all terms used in the singular shall have comparable meanings when used in the plural, and vice versa.
 
(v)   All references in any Bank Document to any time of the day shall be references to Eastern standard time or Eastern daylight savings time, as in effect in the State on such day.
 
Section 1.04   Incorporation of Recitals .
 
  The recitals at the beginning of this Agreement or any other Bank Documents are incorporated into and made a material part of this Agreement or such other Bank Document, as the case may be.
 
ARTICLE II
 
LETTER OF CREDIT AND REIMBURSEMENT
 
Section 2.01   Issuance of Letter of Credit .
 
  The Borrower hereby requests the Bank to issue the Letter of Credit to the Trustee.  Subject to the conditions precedent hereinafter set forth, the Bank will issue to the Trustee pursuant to the request of the Borrower, on the date of execution and delivery of this Agreement, the Letter of Credit in the Letter of Credit Amount and substantially in the form attached hereto as Exhibit A .  The Interest Component of the Letter of Credit has been established on the basis of 47 days' interest on the Bonds and a 365-day year, at an assumed maximum interest rate of 12% per annum.  The Letter of Credit shall be effective on the Date of Issuance and shall expire at 5:00 p.m. on the Expiration Date.  On or prior to the initial anniversary date of the Letter of Credit and on each anniversary date thereafter, the Bank may elect, at its sole option, to extend the Scheduled Expiration Date with respect to the Letter of Credit for one (1) additional year, it being understood that the Bank shall have no obligation to grant any such extension.  The Bank shall notify the Borrower, in writing, at least ninety (90) days prior to the Scheduled Expiration Date in the event the Bank does not grant any such extension.  Any such extension shall be subject to the mutual agreement of the Borrower and the Bank as to any fees to be applicable to the period of extension.  All Drawings will be paid with the Bank's own funds.
 
Section 2.02   Reimbursement and Other Payments .
 
(a)   Reimbursement .  The Borrower hereby agrees to pay or cause to be paid to the Bank:
 
(i)   a sum equal to each amount drawn under the Letter of Credit by an Interest Drawing or a Principal Drawing (in each case for interest or principal due on the Bonds other than by reason of a Liquidity Drawing), on the same Business Day after such Drawing is honored;
 
(ii)   a sum equal to each amount drawn against the Interest Component of the Letter of Credit Amount by a Liquidity Drawing (A) in the case of any such amount drawn on an Interest Payment Date (as defined in the Indenture) of the Bonds being purchased with the proceeds of such Liquidity Drawing on the same Business Day after such Drawing is honored, and (B) in all other cases, on the first to occur of (1) the fourteenth (14) month anniversary of the date on which said Drawing is honored, (2) the date on which the Bonds purchased with the proceeds of such Liquidity Drawing, after the Bank has honored such Drawing, are remarketed by the Remarketing Agent and the proceeds thereof delivered to the Trustee, (3) the date on which the Bonds purchased with the proceeds of such Liquidity Drawing are redeemed or otherwise paid in full, (4) the date the Liquidity Period terminates, or (5) the occurrence of an Event of Default;
 
(iii)   a sum equal to each amount drawn against the Principal Component of the Letter of Credit Amount by a Liquidity Drawing, on the first to occur of (A) the fourteenth (14) month anniversary of the date of which said Drawing is honored, (B) the date on which the Bonds purchased with the proceeds of such Liquidity Drawing, after the Bank has honored such Drawing, are remarketed by the Remarketing Agent and the proceeds thereof are delivered to the Trustee, (C) the date on which the Bonds purchased with the proceeds of Liquidity Drawing, after the Bank has honored such Drawing, are redeemed or otherwise paid in full, (D) the date the Liquidity Period terminates, or (E) the occurrence of an Event of Default; and
 
(iv)   a sum equal to each amount drawn under the Letter of Credit by Final Payment drawing, on the same Business Day after such Drawing is honored.
 
The Bank agrees to give telephonic notice to the Borrower on the day that the Bank receives notice from the Trustee for each Drawing.
 
(b)   Interest; Default Rate
 
(i)   All sums payable to the Bank under Section 2.02(a) shall bear interest, from the Drawing Date until such sums are paid in full (it being understood and agreed that any sum paid to the Bank after 3:00 p.m. on a Business Day shall bear interest as if it was paid at 9:00 a.m. on the next following Business Day), at a fluctuating rate per annum (computed for the actual number of days elapsed, based on a 360 day year) equal to the Base Rate; provided that any sum payable to the Bank under subparagraph (ii) (B) or (iii) of Section 2.02(a) which is outstanding in excess of five (5) days (the " Interest Trigger Date ") shall thereafter bear interest at a fluctuating rate per annum (computed for the actual number of days elapsed, based on a 360 day year) equal to the lesser of (i) the Base Rate or (ii) LIBOR in effect on each Reset Date plus one and one half percent (1.5%), as determined by the Bank on the Interest Trigger Date, until such sum or interest and all other amounts due and payable under this Agreement have been paid in full.  Interest accruing pursuant to this Section 2.02(b) shall be due and payable on the first Business Day of each calendar month after the Drawing Date and on the date the respective sum is paid.  All payments under Sections 2.02(a) and 2.02(b) shall be applied first to the payment of interest due and payable under this Section 2.02(b) and then to the reduction of the principal balance of sums due and payable under Section 2.02(a).
 
(ii)   Upon the occurrence and during the continuance of an Event of Default, (a) any sum payable to the Bank hereunder shall bear interest at the Default Rate, and (b) the Letter of Credit Fee shall be increased to two and three quarters of one percent (2.75%) per annum.  The Default Rate and the increased Letter of Credit Fee payable hereunder shall accrue before and after any judgment has been entered.  The Borrower acknowledges that the increased Letter of Credit Fee and the Default Rate provided for herein reflect, among other things, the fact that, upon default, the Letter of Credit shall have become a substantially greater risk given its default status and that the Bank is entitled to additional compensation for such risk.
 
(c)   Closing Fee .  On the date of execution hereof, the Borrower shall pay to the Bank a closing fee of $5,000.
 
(d)   Commitment Fees .  On June 1, 2008 and monthly in arrears on the first day of each month thereafter so long as any credit remains available to the Trustee under the Letter of Credit and on the Expiration Date or in the event the Borrower obtains an Alternate Credit Facility, the Borrower shall pay to the Bank, upon receipt of the Bank's invoice therefor,  a Letter of Credit commitment fee (the " Letter of Credit Fee ") computed at the rate of three quarters of one percent (.75%) per annum on the average daily Letter of Credit Amount during the preceding month (or portion thereof in the case of the first such payment and in the case of a termination of the Letter of Credit on a day other than the last day of a month); provided that for purposes of computing such average daily Letter of Credit Amount the Letter of Credit Amount shall be treated as having been reinstated with respect to Interest Drawings on the day the Bank received reimbursement therefor, unless the Bank has given written notice to the Trustee pursuant to paragraph 5 of the Letter of Credit that such reinstatement shall not occur.  Computations of Letter of Credit commitment fees under this Section shall be for the actual number of days in the applicable period, based on a 360 day year.
 
(e)   Transaction and Transfer Charges and Expenses .  The Borrower shall pay to the Bank all reasonable transaction charges that the Bank may make for Drawings under the Letter of Credit, including without limitation a negotiation/payment fee of $100.  Such transaction charges shall be payable monthly at the same times as the fees described in Section 2.02(d) hereof are payable, upon submission to the Borrower by the Bank of the Bank's bill therefor.  In addition, the Borrower shall pay to the Bank on demand any and all reasonable charges and expenses which the Bank may pay or incur relative to the Letter of Credit including without limitation a billing fee of $50 (not applicable if a direct deposit account of the Borrower is debited by the Bank), and an amendment fee of $100.  The Borrower shall pay to the Bank upon each transfer of the Letter of Credit in accordance with its terms a transfer fee equal to $500, together with any and all costs and expenses of the Bank incurred in connection with such transfer.
 
(f)   Increased Costs .
 
(i)   If after the date of this Agreement any enactment, promulgation or adoption of or change in any applicable foreign or domestic law, treaty regulation or rule or in the interpretation or administration thereof by any Official Body charged with the interpretation or administration thereof, or compliance by the Bank with any guideline, request or directive issued after the date hereof (whether or not having the force of law) of any such Official Body, shall either (A) impose, modify or deem applicable any reserve, special deposit, capital, compulsory loan, FDIC insurance assessment or similar requirement (including without limitation a guideline, request or directive which affects the manner in which the Bank allocates capital resources to its commitments, including its obligations under this Agreement and the Letter of Credit), (B) subject the Bank to any tax, deduction or withholding or change the basis of taxation of the Bank (other than a change in a rate of tax based on overall net income of the Bank), (C) cause or deem letters of credit to be assets held by the Bank and/or deposits on its books, or (D) impose on the Bank any other condition regarding this Agreement or the Letter of Credit, and the result of any event referred to in clause (A), (B), (C) or (D) of this sentence shall be to increase the direct or indirect cost to the Bank of issuing or maintaining the Letter of Credit or the Bank's obligations under this Agreement or to reduce the amounts receivable by the Bank hereunder or to reduce the rate of return on the capital of the Bank in connection with this Agreement (which increase in costs, reduction in amounts receivable or reduction in rate of return shall be determined by the Bank's reasonable allocation of such cost increase, reduction in amounts receivable or reduction in rate of return resulting from such event), then within ten (10) Business Days after written demand by the Bank, the Borrower shall pay to the Bank, from time to time as specified by the Bank, additional amounts that in the aggregate shall be sufficient to compensate the Bank for such increased cost, reduction in amounts receivable or reduction in rate of return.  A certificate as to such increased cost, reduction in amounts receivable or reduction in rate of return submitted by the Bank to the Borrower setting forth the Bank's calculation thereof, shall in absence of manifest error, be conclusive and binding for all purposes.
 
(ii)   If after the date of this Agreement the Bank shall have determined that any enactment, promulgation or adoption of or change in any applicable foreign or domestic law, regulation, rule or guideline regarding capital adequacy, or in the interpretation or administration thereof, by any Official Body charged with the interpretation or administration thereof, or compliance by the Bank (or any controlling affiliate) with any guideline, request or directive regarding capital adequacy (whether or not having the force of law and whether or not failure to comply thereunder would be unlawful) of any such Official Body, affects or would affect the amount of capital required or expected to be maintained by the Bank (or any controlling affiliate) and the Bank determines, on the basis of reasonable allocations, that the amount of such capital is increased by or is based on its issuance or maintenance of the Letter of Credit or the Bank's obligations under this Agreement, then, within ten (10) Business Days after demand by the Bank, the Borrower shall pay to the Bank, from time to time as specified by the Bank, additional amounts sufficient to compensate the Bank therefor.  A certificate as to such additional amounts submitted to the Borrower by the Bank setting forth the Bank's calculation thereof, shall, in the absence of manifest error, be conclusive and binding for all purposes.
 
(iii)   In addition, the Borrower agrees to indemnify the Bank against any liabilities, losses or expenses (including, without limitation, loss of margin, any loss or expense sustained or incurred in liquidating or employing deposits from third parties, and any loss or expense incurred in connection with funds acquired to effect, fund or maintain any amounts hereunder (or any part thereof) bearing interest based on LIBOR) which the Bank sustains or incurs as a consequence of either (i) the Borrower’s failure to make a payment on the due date thereof, (ii) the Borrower’s revocation (expressly, by later inconsistent notices or otherwise) in whole or in part of any notice given to Bank to request, convert, renew or prepay any amounts bearing interest based on LIBOR, or (iii) the Borrower’s payment or prepayment (whether voluntary, after acceleration of obligations hereunder or otherwise) or conversion of any amounts bearing interest based on LIBOR on a day other than the regularly scheduled due date therefor.  A notice as to any amounts payable pursuant to this paragraph given to the Borrower by the Bank shall, in the absence of manifest error, be conclusive and shall be payable upon demand. The Borrower’s indemnification obligations hereunder shall survive the payment in full of all amounts payable hereunder.
 
(g)   LIBOR Unascertainable .  If the Bank determines (which determination shall be final and conclusive) that, by reason of circumstances affecting the eurodollar market generally, deposits in dollars (in the applicable amounts) are not being offered to banks in the eurodollar market for the selected term, or adequate means do not exist for ascertaining LIBOR, then the Bank shall give notice thereof to the Borrower.  Thereafter, until the Bank notifies the Borrower that the circumstances giving rise to such suspension no longer exist, (a) the availability of LIBOR shall be suspended, and (b) the interest rate for all amounts outstanding under this Agreement to which LIBOR would otherwise apply shall be converted on the next succeeding Reset Date to a rate of interest per annum equal to the Base Rate.
 
In addition, if, after the date of this Agreement, the Bank shall determine (which determination shall be final and conclusive) that any enactment, promulgation or adoption of or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by a governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Bank with any guideline, request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for the Bank to make or maintain or fund loans based on LIBOR, the Bank shall notify the Borrower.  Upon receipt of such notice, until the Bank notifies the Borrower that the circumstances giving rise to such determination no longer apply, (a) the availability of LIBOR shall be suspended, and (b) the interest rate on all amounts outstanding under this Agreement shall be converted to the Base Rate either (i) on the next succeeding Reset Date if the Bank may lawfully continue to maintain or fund loans based on LIBOR to such day, or (ii) immediately if the Bank may not lawfully continue to maintain or fund loans based on LIBOR.
 
(h)   General Interest Accrual; Place of Payment .  Except as otherwise provided in Section 2.02(a) or (b), all payments to the Bank under this Agreement shall be accompanied by interest thereon, from the date such payments become due until they are paid in full, at a fluctuating rate per annum (computed for the actual number of days elapsed, based on a 360-day year) equal to the sum of the Base Rate; provided during the existence of any Event of Default, any amount which is due and payable to the Bank under this Agreement shall thereafter bear interest at a fluctuating rate per annum (computed for the actual number of days elapsed, based on a 360-day year) equal to the Default Rate.  All payments by the Borrower to the Bank under this Agreement shall be made in lawful currency of the United States at the Bank at 3rd Floor, Firstside Center, 500 Fifth Avenue, Pittsburgh, PA 15219 Attention: Trade Services Operations, or at such other address and to the attention of such other person as the Bank may stipulate by written notice to the Borrower, or by a wire transfer in immediately available funds from the Borrower to the Bank in accordance with written wire instructions given to the Borrower by the Bank.  All reimbursement payments under Section 2.02(a) shall be made in immediately available funds.
 
Section 2.03   Transfer; Reduction; Reinstatement .
 
(a)   Transfer .  The Letter of Credit may be transferred in accordance with paragraph 8 of the Letter of Credit.
 
(b)   Reduction .  The Letter of Credit Amount and the respective Principal Component and Interest Component thereof shall be automatically reduced as specified in paragraph 5 of the Letter of Credit.  With respect to any reductions of the Letter of Credit Amount pursuant to the terms of the Letter of Credit as a result of Bonds ceasing to be Outstanding, the Bank shall have the right, at its option, to require the Trustee to promptly surrender the outstanding Letter of Credit to the Bank and to accept in substitution therefor a letter of credit in the form of Exhibit A attached hereto, dated the date of such substitution, for an amount equal to the Letter of Credit Amount as so reduced, but otherwise having terms identical to the then outstanding Letter of Credit.
 
(c)   Reinstatement .   In the event of an Interest Drawing under the Letter of Credit, the Interest Component of the Letter of Credit Amount shall, as provided in paragraph 5(a) of the Letter of Credit and subject to the conditions therein set forth, be automatically reinstated by an amount equal to the amount of such drawing.  In the event of a Liquidity Drawing under the Letter of Credit, the Principal Component and Interest Component of the Letter of Credit Amount shall, as provided in paragraph 5(b) of the Letter of Credit, be reinstated with respect to such drawing (A) automatically when and to the extent that (i) the Bank has received reimbursement for such drawing in immediately available funds (or the Trustee has received immediately available funds which, pursuant to Section 2B.1(g) or Section 2B.2(f) of the Indenture, as applicable, the Trustee will immediately remit to the Bank as reimbursement for such drawing), and (ii) the Trustee has delivered a certificate to the Bank in respect of such reinstatement in the form required by paragraph 5(b) of the Letter of Credit, or (B) when and to the extent the Bank, at its option, upon the Borrower's request, advises the Trustee in writing that such reinstatement shall occur, it being understood that the Bank shall have no obligation to grant any such reinstatement except as set forth in clause (A) of this sentence.
 
Section 2.04   Nature of Obligations .
 
(a)   The Borrower's obligations to the Bank under this Agreement are absolute, unconditional, and irrevocable, and shall be payable in accordance with the terms hereof irrespective of any one or more of the following circumstances:
 
(i)   the form, validity, sufficiency, accuracy, enforceability, genuineness, or effect, or any lack thereof, of the Letter of Credit or any draft, this Agreement, any other Bank Document, or any other document, instrument, or agreement presented in connection with or relating to any of the foregoing, including any signatures or endorsements thereon, even if any such documents, instruments, or agreements should in fact prove to be invalid, insufficient, inaccurate, fraudulent, or forged and even if the Bank or any of its correspondents shall have been notified thereof;
 
(ii)   any failure of any draft to bear reference or adequate reference to the Letter of Credit or of any document to accompany a draft or any failure to forward any document separately from a related draft;
 
(iii)   errors, omissions, interruptions, or delays in transmission or delivery of the Letter of Credit, draft, message, document, or advice, whether transmitted by courier, mail, or hand, or by facsimile, cable, telex, telegraph, or other telecommunication, or otherwise, whether or not encrypted;
 
(iv)   errors in interpretation of technical terms or in translation, and the Bank and its correspondents may transmit terms of the Letter of Credit and related documents and drafts without translation;
 
(v)   any claim or basis for a claim for breach of warranty by the Borrower or the Bank against any beneficiary of the Letter of Credit or the existence of any claim, setoff, defense, or other right that the Borrower may have at any time against any beneficiary or any successor thereof, any transferee of the Letter of Credit, the Bank or any correspondent or agent thereof, or any other Person, whether in connection with the underlying transaction or any unrelated transaction or other matter;
 
(vi)   any payment or other honor by the Bank against a draft or other document presented under the Letter of Credit containing one or more material or consequential discrepancies which causes such presentation to not comply substantially with the terms or conditions of the Letter of Credit and the Bank has notified the Borrower (orally or in writing by facsimile transmission or otherwise) of such discrepancy unless (A) the Bank receives from the Borrower notice in writing, within one (1) Business Day after the Borrower received notice of the discrepancy from the Bank, of the Borrower's objection to such discrepancy, and (B) the Borrower takes all reasonable steps to mitigate any loss;
 
(vii)   any failure of the Bank to issue the Letter of Credit in the form requested by the Borrower, unless the Bank receives written notice from the Borrower of such failure within one (1) Business Day after the Borrower shall have received (by facsimile transmission or otherwise) a copy of the Letter of Credit and such error is material and consequential;
 
(viii)   any payment or other honor under the Letter of Credit that is made after the expiration thereof if such date of expiration occurs during a force majeure affecting the office of the Bank or the office of any other bank through which payment is to be made under such Letter of Credit; or
 
(ix)   any action or inaction, including failure or compulsion to pay or accept a draft, taken or suffered by the Bank or any of its correspondents in connection with the Letter of Credit, draft, document, or property and resulting from any censorship, law, regulation, order, control, restriction, or the like rightfully or wrongly exercised by any de facto or de jure domestic or foreign Official Body or other purported authority or from any other cause beyond the Bank's control or the control of the Bank's correspondents or their respective agents, or for any loss or damage to the Borrower or anyone else or to any property of the Borrower or anyone else resulting from any such failure to pay or accept.
 
(b)   The Bank is authorized to honor any draft without regard to, and without any duty on the Bank's part to inquire into, any underlying transaction or any disputes or controversies between Borrower and any beneficiary of the Letter of Credit or any other Person or the respective rights, duties, or liabilities of any of them or whether any facts or occurrences represented in any of the documents presented under the Letter of Credit are true or correct or whether any draft or document related to the Letter of Credit is forged or fraudulent or whether honor of a presentation under the Letter of Credit would facilitate a fraud or misrepresentation, notwithstanding that the Bank may have assisted the Borrower in the preparation of the wording of the Letter of Credit or any drafts or other documents required to be presented thereunder or that the Bank may be aware of any underlying transaction or familiar with any of the parties thereto.
 
(c)   The Borrower is responsible to the Bank for all obligations imposed upon the Bank with respect to the Letter of Credit and all related drafts and documents.  The Borrower agrees that any action, inaction, or omission by the Bank, any correspondent of the Bank, or their respective agents under or in connection with the Letter of Credit or any related drafts or documents shall be binding on the Borrower, shall not diminish or impair any obligations of the Borrower hereunder, and shall not put the Bank or the Bank's correspondent or their respective agents under any resulting liability to the Borrower in the absence of gross negligence or willful misconduct.  Without limiting the generality of the foregoing, the Bank and each of the Bank's correspondents and their respective agents:
 
(i)   may rely on any oral, telephonic, telegraphic, facsimile, electronic, written, or other communication believed in good faith by the Bank, any correspondent of the Bank, or any agent of either to have been authorized or given by or on behalf of the Borrower;
 
(ii)   shall not be responsible for the identity or authority of any signer or the form, accuracy, genuineness, falsification, or legal effect of any draft or other document presented under the Letter of Credit if such draft or document appears on its face to be in order;
 
(iii)   shall not be responsible for any acts or omissions by or the solvency of any beneficiary of the Letter of Credit or any other Person having any role in any underlying transaction relating to the Letter of Credit;
 
(iv)   may accept or pay, as complying with the terms and conditions of the Letter of Credit, any draft or other document appearing on its face substantially to comply with the terms and conditions of the Letter of Credit;
 
(v)   may disregard (A) any requirement stated in the Letter of Credit that any draft or other document be presented to it at a particular hour or place, and (B) any discrepancies in any presentation under the Letter of Credit that do not reflect a reduction in the value of any beneficiary's performance to the Borrower in the related underlying transaction;
 
(vi)   may accept as a draft any written or electronic demand or request for payment or honor under the Letter of Credit regardless of the legal sufficiency of such demand or request as a negotiable instrument;
 
(vii)   shall not be responsible for the effectiveness or suitability of the Letter of Credit for any purpose of the Borrower or for any acts or omissions of the users of the Letter of Credit;
 
(viii)   shall not be liable to the Borrower for any consequential, punitive, or special damages, or for any damages resulting from any change in the value of any goods or other property to which an underlying transaction relates;
 
(ix)   may honor a previously dishonored presentation under the Letter of Credit, whether pursuant to court order, to settle or compromise any claim that it wrongfully dishonored, or otherwise, and shall be entitled to reimbursement to the same extent as if it had initially honored, plus reimbursement of any interest paid by it;
 
(x)   may honor, upon receipt, any drawing that is payable upon presentation of a statement advising negotiation or payment (even if such statement indicates that a draft or other document is being separately delivered) and shall not be liable for any failure of any draft or other document to arrive or to conform in any way with the draft or other document referred to in the statement or any underlying contract; and
 
(xi)   may pay any paying or negotiating bank (designated or permitted by the Letter of Credit) claiming that it rightfully honored under the laws or practices of the place where it is located.
 
(d)   In the event the Borrower or any other Person seeks to forestall or enjoin the honoring by the Bank of a presentation under the Letter of Credit, the Bank shall have no obligation to delay or refuse to honor the presentation until validly so ordered by a court of competent jurisdiction, and all costs and expenses of the Bank relating thereto (including reasonable attorneys' fees and other related expenses) shall be borne by  the Borrower notwithstanding what party prevails in any such action.
 
(e)   Neither the Bank nor any correspondent of the Bank nor any of their respective agents shall be responsible or liable to the Borrower for or as a result of any of the circumstances described in this Section 2.04, and the Borrower assumes all risks and responsibility for each of the circumstances addressed in this Section 2.04.
 
Section 2.05   Indemnification .
 
(a)   The Borrower shall indemnify and hold the Bank, any parent entity of the Bank, the Bank's and such parent's affiliates and subsidiaries, and each of their respective agent, officers, directors, shareholders, and employees (each, an " Indemnified Party ") harmless from and against any and all claims, liabilities, losses, damages, taxes (excluding taxes imposed on the net income of any Indemnified Party), fees, duties, levies, imposts deductions, charges, withholdings, penalties, interest, judgments, costs, and expenses, including reasonable attorneys' fees and related costs (including those fees and costs of counsel employed by the Indemnified Parties), that may be incurred by or asserted or awarded against any Indemnified Party, in any case arising out of or in connection or by reason of, or in connection with the preparation for a defense of, any investigation, litigation, or proceeding arising out of or in connection with or by reason of:
 
(i)   The Letter of Credit, any draft, any underlying transaction, or this Agreement or any other Bank Documents;
 
(ii)   any payment or action taken in connection with the Letter of Credit (including any action or proceeding seeking to restrain any drawing under the Letter of Credit or to compel or restrain the payment of any amount or the taking of any other action under the Letter of Credit or any Bank Document or to obtain similar relief (including by way of interpleader, declaratory judgment, attachment, or otherwise) and regardless who is the prevailing party in any such action or proceeding;
 
(iii)   the enforcement of the Bank Documents or the collection or sale of any property or other collateral, or any act or omission in connection therewith;
 
(iv)   any occurrence or circumstance described in Section 2.04 hereof or any breach by the Borrower of any representation, warranty, covenant, term or condition in or the occurrence of an Event of Default under any Bank Document, the Loan Agreement or the Bond Documents; and
 
(v)   any act or omission of any de jure or de facto Official Body or other cause beyond the control of the Bank, except to the extent such claim, liability, loss, damage, tax (excluding taxes imposed on the net income of the Bank), fees, duties, levies, imposts, deductions, charges, withholdings, penalty, interest, judgment, cost, or expense is found by a final judgment of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Bank.
 
(b)   The Bank shall have no liability to the Borrower or any other Person as a result of any tender of Bonds resulting from any reduction of the credit rating of the Bank or any deterioration in the Bank's financial condition, and the Borrower hereby indemnities and holds harmless each Indemnified Party from any and all claims, damages, losses, liabilities, costs or expenses relating to the Borrower or the Bonds which any Indemnified Party may incur in connection therewith.  No reduction on the credit rating of the Bank or deterioration in the Bank's financial condition shall reduce or in any way diminish the obligations of the Borrower to the Bank under this Agreement and the other Bank Documents, including without limitation the Borrower's obligation to pay Letter of Credit commitment fees to the Bank and to reimburse the Bank for any drawing under the Letter of Credit.
 
(c)   Nothing in this Section 2.05 is intended to limit the Borrower's reimbursement obligations contained in Section 2.02(a).  The obligations of the Borrower under this Section 2.05 shall survive the termination of this Agreement.
 
ARTICLE III
 
SECURITY
 
Section 3.01   Security and Subrogation under Indenture .
 
  The Borrower and the Bank intend that (a) the Bank will have the security and benefit of the Bond Documents as provided in the Indenture and (b) in the event of one or more draws under the Letter of Credit and the application thereof to the payment of Bonds, the Bank will be subrogated pro tanto to the rights of the Trustee and the holders of such Bonds under the Bond Documents and in and to all funds (except redemption funds) and security held by the Trustee under the Indenture for the payment of the principal of and interest on such Bonds, including without limitation all loan funds, construction funds, project funds, escrow funds, revenue funds, operation funds, debt service funds, reserve funds and other funds (except redemption funds) and securities and other instruments comprising investments thereof. In addition, the Bank shall have any and all other subrogation rights available to the Bank at law and in equity.
 
Section 3.02   Pledge of Rights to Certain Funds and Investments .
 
  To secure the Borrower's obligations to the Bank under this Agreement, the Borrower hereby pledges to the Bank, and grants to the Bank a security interest in, all of the Borrower's right, title and interest in and to all funds (except redemption funds) and investments thereof now or hereafter held by the Trustee under the Indenture as security for the payment of the Bonds, including without limitation any and all loan funds, construction funds, project funds, escrow funds, revenue funds, operations funds, debt service funds, reserve funds and other funds and securities and other instruments comprising investments thereof and interest and other income derived therefrom held as security for the payment of the Bonds, such pledge, assignment and grant being under and subject only to the rights of the Trustee under the Indenture.  The Borrower covenants and agrees that it will defend the Bank's rights and security interests created by this Section against the claims and demands of all Persons.  In addition to its other rights and remedies under the Transaction Documents, the Bank shall have all the rights and remedies of a secured party under the Uniform Commercial Code or other applicable law with respect to the security interests created by this Section.  The Bank's rights under this Section are in addition to, and not in lieu of, its rights described in Section 3.01.
 
Section 3.03   Pledged Bonds .
 
(a)   Pledge .  To secure the Borrower's obligations to the Bank under this Agreement and the Bank Documents, the Borrower hereby pledges and assigns to the Bank, and grants to the Bank a security interest in, all of the Borrower's right, title and interest, now owned or hereafter acquired, in and to any and all unremarketed Pledged Bonds (together with all income therefrom and proceeds thereof) purchased pursuant to the Indenture with the proceeds of a Liquidity Drawing presented under the Letter of Credit for which neither (i) full reimbursement has been made to the Bank nor (ii) the Trustee holds sufficient funds which, pursuant to the Indenture, the Trustee is required to apply on behalf of the Borrower to reimburse the Bank in full for such Liquidity Drawing on the date such Liquidity Drawing is paid by the Bank.  Such unremarketed Pledged Bonds shall be pledged to the Bank, registered in its name as pledgee of the Borrower and delivered to and held by the Trustee as agent for the Bank under this Section 3.03 or, at the option of the Bank by written notice to the Borrower and the Trustee, the Pledged Bonds specified in such notice shall be delivered to and held by the Bank; provided that , if the Pledged Bonds are held in uncertificated form pursuant to an agreement with the Depository Trust Company, or a successor securities depository, then such pledge to the Bank shall be recorded in the registration books maintained by the Trustee and in the records of ownership maintained by the securities depository and any participant through which such Pledged Bonds are held.
 
(b)   Pledged Bond Payments .   Any principal of and interest on Pledged Bonds which becomes due and payable (including any due-bills received upon purchase thereof pursuant to the record date provisions of the Indenture or the Bonds) shall be paid to the Bank.  All sums of money so paid to the Bank in respect of Pledged Bonds shall be credited against the obligation of the Borrower to reimburse the Bank, with interest, under Section 2.02(a) for the amount drawn under a Liquidity Drawing to fund the purchase of such Pledged Bonds pursuant to the Indenture.
 
(c)   Release of Pledged Bonds .  If the Borrower pays or causes to be paid in full its obligation under Section 2.02(a) for the reimbursement of the amount (or allocable portion thereof) drawn with a Liquidity Drawing to fund the purchase of Pledged Bonds pursuant to Article 2B of the Indenture (or if the Trustee has received immediately available funds which, pursuant to Section 2B.1(g) or 2B.2(f) of the Indenture, the Trustee is required to pay over promptly to the Bank in an amount sufficient to pay the Borrower's reimbursement obligation under Section 2.02(a) with respect to the amount drawn with such Liquidity Drawing to fund the purchase of such Pledged Bonds), and provided no Default or Event of Default has occurred and is continuing, the Bank will release from the pledge of this Agreement and will deliver, or cause its agent to deliver, such Pledged Bonds (if held in certificated form) to such Person or Persons as the Trustee or the Borrower may direct.  An amount equal to the principal of, plus accrued interest on, such Pledged Bonds shall be presumed (absent notice to the contrary) to be an " amount sufficient " for purposes of this Section 3.03(c) and, upon receipt of such amount by the Trustee for payment to the Bank as aforesaid, the Trustee shall be authorized, upon receipt of the Bank's written confirmation of the reinstatement of the Letter of Credit relating to the Pledged Bonds, to deliver such Pledged Bonds as aforesaid free from the pledge of this Agreement.
 
(d)   No Liability of Bank .  The Bank shall not be liable for failure to collect or realize upon the obligations secured by the Pledged Bonds or any collateral security or guarantee therefor, or any part thereof, or for any delay in so doing, and the Bank shall not be under any obligation to take any action whatsoever with regard thereto.
 
(e)   Representations; Rights and Remedies .  The Borrower represents and warrants to the Bank that the pledge, assignment and delivery of Pledged Bonds pursuant to this Section 3.03 will create a valid first lien on and a first perfected security interest in, all right, title and interest of the Borrower in and to the Pledged Bonds, and the proceeds thereof. The Borrower covenants and agrees that it will defend the Bank's right, title and security interest in and to the Pledged Bonds and the proceeds thereof against the claims and demands of all persons.  In addition to its other rights and remedies under the Transaction Documents, the Bank shall have the rights and remedies of a secured party under the Uniform Commercial Code or other applicable law with respect to the security interests created by this Section.
 
ARTICLE IV
 
CONDITIONS PRECEDENT
 
The obligation of the Bank to issue the Letter of Credit and enter into the Bank Documents is subject to the receipt of or satisfaction of each of the following documents, matters and conditions, all of which must be satisfactory to the Bank in form and substance:
 
Section 4.01   Closing Fee .
 
  On the date of execution and delivery hereof, the Borrower shall pay to the Bank the Letter of Credit closing fee due pursuant to Section 2.02(c).
 
Section 4.02   Documentation .
 
  The Bank shall have received each of the following, in form and substance satisfactory to the Bank:
 
(a)   Bank Documents .  Fully-executed copies of each of the Bank Documents,  and all schedules thereto prepared by the Borrower;
 
(b)   Bond Documents .  True and correct copies of the executed Bond Documents and all documentation delivered in connection therewith;
 
(c)   Formation and Authorization Documents .   For the Borrower the following formation and authorization documents:
 
(i)   Corporate Resolutions .  A copy, duly certified as true, correct, complete and in effect by its secretary or assistant secretary as of the date hereof, of resolutions of its board of directors authorizing the transactions described in the Transaction Documents and the execution and delivery of and performance under the Transaction Documents and all other documents required to accomplish and implement the foregoing;
 
(ii)   Articles of Incorporation .  A copy of its articles and/or certificate of Incorporation and all amendments, duly certified as of a recent date by the Secretary of State of the state of its incorporation;
 
(iii)   Good Standing Certificates .  A good standing certificate issued as of a recent date by the Secretary of State of the state of its incorporation;
 
(iv)   Bylaws .  A copy of its bylaws and all amendments, certified as true, complete, correct and in effect by its secretary or assistant secretary; and
 
(v)   Incumbency Certificate .  An incumbency certificate executed by its secretary or assistant secretary dated as of the date hereof certifying the names and offices held by the officers of such corporation who are authorized on behalf of such corporation to execute the Bank Documents to be executed by it, together with true signatures of such officers.
 
(d)   Closing Certificate .   A certificate of an Authorized Person dated as of the date of execution and delivery hereof stating that (i) the representations and warranties contained in Article V and in the other Bank Documents are true and correct, (ii) no Default or Event of Default has occurred and is continuing, and (iii) no Material Adverse Change has occurred and is continuing;
 
(e)   Lien Searches .   Results of Uniform Commercial Code, judgment and lien searches for the Borrower, with results satisfactory to the Bank;
 
(f)   Opinion of Borrower's Counsel .   An opinion of Morgan Lewis, counsel to the Borrower, which opinion may be issued, where indicated, in reasonable reliance upon certifications, opinions and other documentation derived from Official Bodies and others having particular access to materials and information necessary to reach the conclusions expressed in such opinion, covering the matters described in Exhibit B hereto;
 
(g)   Other Opinions .   Opinions of Saul Ewing LLP, bond counsel, and of the Office of Chief Counsel of the Pennsylvania Department of Community and Economic Development, each addressed to the Bank, covering such matters as to the Issuer and the Bond Documents as the Bank may reasonably request;
 
(h)   Issuer's Certificate .   A certificate or certificates of the officers of the Issuer covering such matters as to the Issuer and the Bond Documents as the Bank may reasonably request;
 
(i)   Financial Statements .  Audited   Financial Statements of the Borrower for the Fiscal Year ended December 31, 2007.
 
(j)   Consents .  All consents of Official Bodies which are required in connection with the transactions contemplated by the Transaction Documents;
 
(k)   Other Conditions .  Such other documents, certificates, approvals, assurances and opinions as are listed in the closing memorandum filed with the Trustee in connection with the issuance of the Bonds, or as listed on a closing checklist prepared by the Bank's counsel, or as the Bank or its counsel may reasonably request; and
 
(l)   Payment of Fees .  Payment of all fees due to the Bank on the date hereof, if any, and payment of all fees and out-of-pocket costs incurred by the Bank's counsel in connection herewith.
 
Section 4.03   Issuance of Bonds .
 
  On the date of execution and delivery hereof, all conditions precedent to the issuance and original sale of the Bonds shall have been satisfied and the Bonds shall have been duly issued and delivered.  The Bonds shall provide for amortization as set forth in the Indenture.
 
ARTICLE V
 
REPRESENTATIONS AND WARRANTIES
 
To induce the Bank to enter into this Agreement and issue the Letter of Credit, the Borrower hereby makes the following representations and warranties to the Bank, all of which shall be continuing in nature and shall survive the execution and delivery of this Agreement and the issuance of the Letter of Credit:
 
Section 5.01   Existence .
 
  The Borrower is a corporation, duly organized, validly existing and in good standing under the laws of the State.  The Borrower has all necessary permits, licenses, certifications and qualifications to conduct its business as it is presently being conducted, and has complied in all material respects with all applicable requirements of all Official Bodies, to operate its facilities as they are presently being operated.
 
Section 5.02   Power, Authorization and No Conflicts .
 
  The execution, delivery and performance by the Borrower of the Transaction Documents are within the Borrower's powers, have been duly authorized by all necessary corporate action of the Borrower and do not contravene the Articles of Incorporation or bylaws  of the Borrower or any Law or judgment applicable to the Borrower or any agreement, contractual or other restriction binding on or affecting the Borrower or any of its properties.
 
Section 5.03   Governmental and Other Approvals .
 
  No authorization, approval or other action by, and no notice to or filing with, any Official Body is required for the due execution, delivery and performance by the Borrower of the Transaction Documents, except such as have been obtained.
 
Section 5.04   Validity, Binding Effect and Enforceability .
 
  The Transaction Documents are the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms, subject to the application by a court of general principles of equity and to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally or limiting the right of specific performance.
 
Section 5.05   No Litigation .
 
  There is no pending action or proceeding before any Official Body against or involving the Borrower and, to the best knowledge of the Borrower, there is no threatened action or proceeding affecting the Borrower before any Official Body which has resulted in, or may reasonably be expected to result in, a Material Adverse Change.
 
Section 5.06   No Violations .
 
  The Borrower is not in any material way in breach of or in default under (a) any applicable Law of any Official Body or any applicable judgment or decree or (b) any loan agreement, indenture, lease, sublease, bond, note, resolution, agreement or other agreement or instrument to which it is a party or otherwise bound or subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute an event of default under any such instrument except for violations, if any, which the Borrower has disclosed to the Bank in writing, is proceeding in good faith to remove or correct and which have not and are not reasonably expected to result in a Material Adverse Change.  The Borrower has no knowledge of any violation, nor is there any notice or other record of any violation, of any zoning, subdivision, environmental, building or other statute, ordinance, regulation, restrictive covenant or other restriction applicable to the Premises except for violations, if any, which the Borrower has disclosed to the Bank in writing, is proceeding in good faith to remove or correct and which have not and are not reasonably expected to result in a Material Adverse Change.
 
Section 5.07   Reserved .
 

 
Section 5.08   No Liens .
 
  There exist no Liens against the Premises (including statutory and other Liens of mechanics, workmen, contractors, subcontractors, suppliers, taxing authorities and others) or any personal property of the Borrower, except for Permitted Liens; and the Borrower has not made a contract or arrangement of any kind, the performance of which by the other party thereto could give rise to a Lien on the Premises by operation of law or otherwise, except for Permitted Liens.
 
Section 5.09   Reserved.
 
Section 5.10   Financial Condition; No Material Adverse Change .
 
(a)   Annual Financial Statements . The balance sheet of the Borrower as of December 31, 2007 and the related statements of income and changes in financial position of the Borrower for the Fiscal Year then ended (i) have been prepared in accordance with GAAP, (ii) have been examined by Beard Miller Company, LLP, Certified Public Accountants, (iii) are complete and correct and present fairly the financial condition and results of operations of the Borrower as of and for the period covered thereby, and (iv) accurately reflect all liabilities, including contingent liabilities, of the Borrower as of the date thereof.
 
(b)   Interim Financial Statements . The balance sheet of the Borrower as of March 31, 2008 and the related statement of income for the three (3) months ended March 31, 2008 (i) have been prepared in accordance with GAAP, (ii) are complete and correct and present fairly the financial condition and results of operations of the Borrower as of March 31, 2008 and for the period covered thereby, and (iii) accurately reflect all liabilities, including contingent liabilities, of the Borrower as of the date thereof.
 
(c)   Material Adverse Changes . Since December 31, 2007, the Borrower has conducted its operations in the ordinary course of business, and no Material Adverse Change has occurred.
 
Section 5.11   Plans and Benefit Arrangements .
 

 
(a)   The Borrower and each other member of the ERISA Group are in compliance in all material respects with any applicable provisions of ERISA with respect to all Benefit Arrangements, Plans and Multiemployer Plans.  There has been no Prohibited Transaction with respect to any Benefit Arrangement or any Plan or, to the best knowledge of the Borrower, with respect to any Multiemployer Plan or Multiple Employer Plan, which could result in any material liability of the Borrower or any other member of the ERISA Group.  The Borrower and all other members of the ERISA Group have made when due any and all payments required to be made under any agreement relating to a Multiemployer Plan or a Multiple Employer Plan or any Law pertaining thereto.  With respect to each Plan and Multiemployer Plan, the Borrower and each other member of the ERISA Group (i) have fulfilled in all material respects their obligations under the minimum funding standards of ERISA, (ii) have not incurred any liability to the PBGC, and (iii) have not had asserted against them any penalty for failure to fulfill the minimum funding requirements of ERISA.
 
(b)   To the best of the Borrower's knowledge, each Multiemployer Plan and Multiple Employer Plan is able to pay benefits thereunder when due.
 
(c)   Neither the Borrower nor any other member of the ERISA Group has instituted or intends to institute proceedings to terminate any Plan.
 
(d)   No event requiring notice to the PBGC under Section 302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur with respect to any Plan, and no amendment with respect to which security is required under Section 307 of ERISA has been made or is reasonably expected to be made to any Plan.
 
(e)   The aggregate actuarial present value of all accumulated benefit obligations (whether or not vested) under each Plan, as disclosed in, and as of the date of, the most recent actuarial report for such Plan, does not exceed the aggregate fair market value of the assets of such Plan.
 
(f)   Neither the Borrower nor any other member of the ERISA Group has incurred or reasonably expects to incur any material withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.  Neither the Borrower nor any other member of the ERISA Group has been notified by any Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan or Multiple Employer Plan has been terminated within the meaning of Title IV of ERISA and, to the best knowledge of the Borrower, no Multiemployer Plan or Multiple Employer Plan is reasonably expected to be reorganized or terminated, within the meaning of Title IV of ERISA.
 
(g)   To the extent that any Benefit Arrangement is insured, the Borrower and all other members of the ERISA Group have paid when due all premiums required to be paid for all periods through the Closing Date.  To the extent that any Benefit Arrangement is funded other than with insurance, the Borrower and all other members of the ERISA Group have made when due all contributions required to be paid for all periods through the Closing Date.
 
(h)   All Plans, Benefit Arrangements and Multiemployer Plans have been administered in accordance with their terms and applicable Law.
 
Section 5.12   Environmental Compliance .
 

 
(a)   The Borrower has not received any Environmental Complaint from any Official Body or private Person alleging that the Borrower or any prior or subsequent owner of any of the Borrower's Facilities is a potentially responsible party under the Comprehensive Environmental Response, Cleanup and Liability Act, 42 U.S.C. § 9601 et seq., and the Borrower has no reason to believe that such an Environmental Complaint might be received.  There are no pending or, to the Borrower's knowledge, threatened Environmental Complaints relating to any prior or subsequent owner of the Premises pertaining to, or arising out of, any Environmental Conditions.
 
(b)   There are no circumstances at, on or under the Premises that constitute a breach of or non-compliance with any of the Environmental Laws, and there are no past or present Environmental Conditions at, on or under any of the Premises or, to the Borrower's knowledge, at, on or under adjacent property, that prevent compliance with the Environmental Laws at the Premises.
 
(c)   Neither the Premises nor any structures, improvements, equipment, fixtures, activities or facilities thereon or thereunder contain or use Regulated Substances except in compliance with Environmental Laws.  There are no processes, facilities, operations, equipment or other activities at, on or under the Premises, or, to the Borrower's knowledge, at, on or under adjacent property, that currently result in the release or threatened release of Regulated Substances onto any of the Premises, except to the extent that such releases or threatened releases are not a breach of or otherwise not a violation of the Environmental Laws.
 
(d)   There are no aboveground storage tanks, underground storage tanks or underground piping associated with such tanks, used for the management of Regulated Substances at, on or under the Premises that (i) do not have, to the extent required by Environmental Laws, a full operational secondary containment system in place, and (ii) are not otherwise in compliance with all Environmental Laws.  There are no abandoned underground storage tanks or underground piping associated with such tanks, previously used for the management of Regulated Substances at, on or under any of the Premises that have not either been closed in place in accordance with Environmental Laws or removed in compliance with all applicable Environmental Laws and no contamination associated with the use of such tanks exists on any of the Premises that is not in compliance with Environmental Laws.
 
(e)   The Borrower has all material permits, licenses, authorizations, plans and approvals necessary under the Environmental Laws for the conduct of its business as presently conducted.  The Borrower has submitted all material notices, reports and other filings required by the Environmental Laws to be submitted to an Official Body which pertain to past and current operations on the Premises.
 
(f)   All past and present on-site generation, storage, processing, treatment, recycling, reclamation, disposal or other use or management of Regulated Substances at, on, or under any of the Premises and all off-site transportation, storage, processing, treatment, recycling, reclamation, disposal or other use or management of Regulated Substances have been done in accordance with the Environmental Laws.
 
Section 5.13   Disclosure .
 
  None of the Transaction Documents contains any untrue statement of a material fact respecting the Borrower or omits to state a material fact respecting the Borrower necessary in order to make the statements contained herein and therein, in the light of the circumstances in which they were made, not misleading.  There is no fact known to the Borrower which has resulted in or which may reasonably be expected to result in a Material Adverse Change which has not been set forth in the Bank Documents or in the other documents, certificates and statements furnished to the Bank by or on behalf of the Borrower prior to the date of execution and delivery of this Agreement in connection with the transactions contemplated hereby.
 
Section 5.14   Anti-Terrorism Laws .
 
(a)   General .   Neither the Borrower nor any subsidiary of the Borrower is in violation of any Anti-Terrorism Law or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
 
(b)   Executive Order No. 13224 .  Neither the Borrower nor any subsidiary of the Borrower, or their respective agents acting or benefiting in any capacity in connection with the Letter of Credit or other transactions hereunder, is any of the following (each a " Blocked Person "):
 
(i)   a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;
 
(ii)   a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order No. 13224;
 
(iii)   a Person or entity with which the Bank is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;
 
(iv)   a Person or entity that commits, threatens or conspires to commit or supports "terrorism" as defined in the Executive Order No. 13224;
 
(v)   a Person or entity that is named as a "specially designated national" on the most current list published by the United States Treasury Department Office of Foreign Asset Control at its official website or any replacement website or other replacement official publication of such list, or
 
(vi)   a person or entity who is affiliated or associated with a person or entity listed above.
 
Neither the Borrower nor, to the knowledge of the Borrower, any of its agents acting in any capacity in connection with the Letter of Credit or other transactions hereunder (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224.
 
Section 5.15   Incorporation of Representations and Warranties by Reference .
 
  The Borrower hereby makes to the Bank the same representations and warranties as are made by the Borrower and set forth in the Bank Documents and Bond Documents, which representations and warranties, as well as the related defined terms contained therein, are hereby incorporated by reference with the same effect as if each and every such representation and warranty and defined term were set forth herein in its entirety.  No amendment to such representations and warranties or defined terms made pursuant thereto shall be effective to amend such representations and warranties and defined terms as incorporated by reference herein without the consent of the Bank.
 
Section 5.16   Use of Proceeds; Margin Stock; Section 20 Subsidiaries .
 
(a)   General .  The Borrower intends to use the proceeds from the sale of the Bonds in accordance with the terms of the Bond Documents.
 
(b)   Margin Stock .  The Borrower does not engage or intend to engage principally, or as one of its important activities, in the business of extending credit for the purpose, immediately, incidentally or ultimately, of purchasing or carrying margin stock (within the meaning of Regulation U).  No part of the proceeds of any Loan has been or will be used, immediately, incidentally or ultimately, to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock or to refund indebtedness originally incurred for such purpose, or for any purpose which entails a violation of or which is inconsistent with the provisions of the regulations of the Board of Governors of the Federal Reserve System.  The Borrower does not hold or intend to hold margin stock in such amounts that more than twenty-five percent (25%) of the reasonable value of the assets of the Borrower are or will be represented by margin stock.
 
(c)   Section 20 Subsidiaries .  The Borrower does not intend to use and shall not use any portion of the proceeds of the Bonds, directly or indirectly (i) knowingly to purchase any Ineligible Securities from a Section 20 Subsidiary during any period in which such Section 20 Subsidiary makes a market in such Ineligible Securities, (ii) knowingly to purchase during the underwriting or placement period Ineligible Securities being underwritten or privately placed by a Section 20 Subsidiary, or (iii) to make payments of principal or interest on Ineligible Securities underwritten or privately placed by a Section 20 Subsidiary and issued by or for the benefit of the Borrower or any Affiliate of the Borrower.
 
Section 5.17   Material Adverse Change .
 
  Since the date of the most recent Financial Statements delivered to the Bank, there has been no Material Adverse Change.
 
Section 5.18   Condition of and Title to Assets; Status of Leases .
 
  The Borrower has good title to its properties, assets and leases.  As of the date hereof none of the assets of the Borrower are subject to any Lien except for existing Permitted Liens.  All of the assets and properties of the Borrower that are necessary for the operation of its businesses are in good working condition, ordinary wear and tear excepted, and are able to serve the functions for which they are currently being used.  The Borrower is not in default under, and to the best of its knowledge no other party thereto is in default under, any material lease to which the Borrower is a party.
 
Section 5.19   Insurance .
 
  The Borrower currently maintains insurance which meets or exceeds the requirements of Section 6.03 and the applicable insurance requirements set forth in the other Bank Documents, and such insurance is provided by reputable and financially sound insurers and is of such types and at least in such amounts as are customarily carried, and insures against such risks as are customarily insured against, by similar businesses similarly situated and owning, leasing and operating similar properties to those owned, leased and operated by the Borrower.  All of such insurance policies are valid and in full force and effect.  No notice has been given or claim made, and, to the Borrower's knowledge, no grounds exist to cancel or avoid any of such policies or to reduce the coverage provided thereby.
 
Section 5.20   Taxes .
 
  All federal, state, local and other tax returns required to have been filed by the Borrower have been filed, and payment or adequate provision has been made for the payment of all taxes, fees, assessments and other governmental charges which have or may become due pursuant to said returns or to assessments received, except to the extent that such taxes, fees, assessments and other charges are being contested in good faith by appropriate proceedings diligently conducted and for which such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made.  There are no agreements or waivers extending the statutory period of limitations applicable to any federal income tax return of the Borrower for any period.
 
Section 5.21   No Event of Default; Compliance with Instruments .
 
  No Default or Event of Default has occurred and is continuing, or will occur or exist after giving effect to the extensions of credit to be made pursuant to any of the Transaction Documents.  The Borrower is not in violation of (i) any term of its certificate of incorporation, bylaws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement or other organizational documents or (ii) any agreement or instrument to which it is a party or by which it or any of its properties may be subject or bound where such violation has resulted in or may be reasonably likely to result in a Material Adverse Change.
 
Section 5.22   Patents, Trademarks, Copyrights, Licenses, Etc.
 
  The Borrower owns or possesses all the material patents, trademarks, service marks, trade names, copyrights, licenses, registrations, franchises, permits and rights necessary to own and operate its properties and to carry on its business as presently conducted and planned to be conducted, without known possible, alleged or actual conflict with the rights of others.
 
ARTICLE VI
 
GENERAL COVENANTS
 
So long as any amount is available under the Letter of Credit, the Liquidity Period has not terminated or any amount is due and owing to the Bank hereunder, the Borrower covenants that, except to the extent the Bank shall otherwise consent in writing, each of the following covenants shall be performed and complied with by the Borrower:
 
Section 6.01   Maintenance of Existence .
 
  The Borrower will maintain its existence, rights and privileges and its qualification to do business in the State.
 
Section 6.02   Compliance with Laws, Etc .
 
  The Borrower will comply in all material respects with all applicable Laws of any Official Body, except for any such Laws which the Borrower is contesting in good faith by appropriate proceedings and the noncompliance with which during such contest would not result in a Material Adverse Change if the result of such contest were adverse to the Borrower.
 
Section 6.03   Maintenance of Insurance .
 
  The Borrower will maintain at all times adequate insurance to the satisfaction of the Bank with insurers acceptable to the Bank against such risks of loss as are customarily insured against and in amounts customarily carried by persons owning, leasing or operating similar properties, including, but not limited to, fire and theft and extended coverage insurance in an amount at least equal to the total full insurable value of the Borrower's insurable property, provided that the amount of such insurance shall at all times be sufficient to prevent the Borrower from becoming a co- insurer under the terms of any insurance policy.  Each such insurance policy covering properties, if any, pledged as collateral for the Borrower's obligations hereunder shall have a long form lender's loss payable endorsement in favor of the Bank, providing for at least thirty (30) days written notice to the Bank prior to cancellation and, in this regard, the Borrower shall cause a certificate of insurance to be delivered to the Bank prior to the issuance of the Letter of Credit and no later than thirty (30) days prior to the expiration of any such insurance coverage.  The Borrower will also keep itself adequately insured at all times against liability on account of injury to persons or property and comply with the insurance provisions of all applicable workers' compensation laws and will effect all such insurance under valid and enforceable policies issued by insurers of recognized responsibility.
 
Section 6.04   Compliance with Bond Documents and Other Contracts .
 
  The Borrower will comply with all of its covenants and agreements under the Bond Documents, as the same may hereafter be amended or supplemented from time to time, and comply with, or cause to be complied with, all material requirements and conditions of all material contracts and insurance policies which relate to the Borrower.
 
Section 6.05   Visitation Rights .
 
  The Borrower will, at any reasonable time and from time to time, permit the Bank or its agents or representatives to examine and make copies of an abstracts from the records and books of account of, and visit the properties of, the Borrower, and to discuss the affairs, finances and accounts of the Borrower with the officers and accountants of the Borrower.
 
Section 6.06   Keeping of Books .
 
  The Borrower will keep proper books of record and account, in which full and correct entries shall be made of financial transactions and the assets and operations of the Borrower in accordance with GAAP, and have a complete audit of such books of record and account made by certified public accountants acceptable to the Bank for each Fiscal Year.
 
Section 6.07   Maintenance of Properties .
 
  The Borrower will maintain and preserve all of its properties in good working order and condition, ordinary wear and tear excepted; not permit, commit or suffer any waste of any of its properties; not use or permit the use of any of its properties for any unlawful purpose or permit any nuisance to exist thereon.
 
Section 6.08   Reporting Requirements .
 
  The Borrower will furnish or cause to be furnished to the Bank the following in form satisfactory to the Bank:
 
(a)   Quarterly Financial Statements . As soon as available and in any event within forty-five (45) days after the end of the first three quarters of each Fiscal Year of the Borrower:
 
(i)   the Borrower's Financial Statements for the quarter, together with comparative figures for the corresponding period of the prior year, certified, subject to ordinary and usual year-end adjustment, by the chief financial officer of the Borrower;
 
(ii)   a computation by a financial officer of the Borrower as of the end of such fiscal quarter and for the twelve (12) month period then ended of the Borrower's compliance with the financial covenants in Section 6.13, certified and by such officer to be accurate and complete and made in accordance with this Agreement; and
 
(iii)   a certificate signed by an officer of the Borrower stating that (A) during such fiscal quarter the Borrower has delivered and performed all of its covenants and agreements set forth in the Transaction Documents, except as disclosed in such certificate, and (B) no Default or Event of Default has occurred and is continuing, except as disclosed in such certificate.
 
(b)   Annual Financial Statements . As soon as available and in any event within one hundred twenty (120) days after the close of each Fiscal Year of the Borrower:
 
(i)   the Borrower's Financial Statements and tax returns for the year, together with statements of changes in consolidated financial position certified without qualification as to scope, by a certified public accountant acceptable to the Bank;
 
(ii)   computations by a financial officer  of the Borrower as of the end of such Fiscal Year and for such Fiscal Year of the Borrower's compliance with the terms of Section 6.13, certified by such officer to be accurate and complete and made in accordance with this Agreement; and.
 
(iii)   a certificate signed by an officer of the Borrower stating that (A) during such Fiscal Year the Borrower has observed and performed all of its covenants and agreements set forth in this Agreement and the Bond Documents, except as disclosed in such certificate, and (B) neither any Event of Default nor any event which, with the giving of notice or lapse of time or both, would constitute an Event of Default has occurred or is continuing, except as disclosed in such certificate.
 
(c)   Management Letters . Upon receipt thereof by the Borrower, copies of any letter or report with respect to the management, operations or properties of the Borrower submitted to the Borrower by its accountants in connection with any annual or interim audit of the Borrower's accounts, and a copy of any written response of the Borrower to any such letter or report;
 
(d)   Notice of Litigation and Proceedings . As soon as possible and in any event within thirty (30) days after receipt of notice thereof, notice of any pending or threatened litigation, investigation or other proceeding involving the Borrower (i) which could result in a Material Adverse Change or (ii) wherein the potential damages, in the reasonable judgment of the Borrower based upon the advice of counsel experienced in such matters, are not fully covered by the insurance policies maintained by the Borrower (except for the deductible amounts applicable to such policies);
 
(e)   Notice of Material Adverse Change . As soon as possible, notice of any Material Adverse Change;
 
(f)   Notice of Default . As soon as possible and in any event within fifteen (15) days after the occurrence of any Default or Event of Default, a statement of an officer of the Borrower setting forth the details of such Default or Event of Default and the action which the Borrower has or is taking or proposes to take with respect thereto; and
 
(g)   Other Information . Such other information respecting the operations and properties, financial or otherwise, of the Borrower as the Bank may from time to time reasonably request.
 
Section 6.09   Consent Under Bond Documents .
 
  The Borrower will obtain the consent of the Bank whenever the consent of the Trustee is required to be obtained under the Bond Documents.
 
Section 6.10   Reserved.
 
Section 6.11   Payment of Indebtedness .
 
  The Borrower will make full and timely payment of the principal of and interest on all Indebtedness of the Borrower, whether now existing or hereafter arising, and comply in all material respects with all covenants and agreements set forth in agreements evidencing Indebtedness of the Borrower.
 
Section 6.12   Environmental Covenants .
 
  The Borrower will cause all activities at the Premises during the term of this Agreement to be conducted in compliance with all Environmental Laws.  The Borrower will cause permits, licenses or approvals to be obtained and will cause all notifications to be made, as required by Environmental Laws, and will, at all times, cause compliance with the terms and conditions of any such approvals or notifications.  During the term of this Agreement, if requested by the Bank, the Borrower will provide to the Bank copies of (i) applications or other materials submitted to any Official Body in compliance with Environmental Laws, (ii) any notifications submitted to any Person pursuant to Environmental Laws, (iii) any permit, license, approval, amendment or modification thereto granted pursuant to Environmental Laws, (iv) any record or manifest required to be maintained pursuant to Environmental Laws, and (v) any correspondence, notice of violation, summons, order, complaint or other document received by the Borrower, its lessees, sublessees or assigns, pertaining to compliance with any Environmental Laws.
 
Section 6.13   Financial Covenants .
 
  At all times during the term hereof, the Borrower shall comply with the following financial covenants:
 
(a)   Minimum Equity to Capitalization Ratio .                                                                                                 The Borrower will maintain a ratio of shareholders' equity in Borrower divided by the sum of shareholders' equity in Borrower plus Funded Debt, all as determined and consolidated in accordance with GAAP, of not less than 38%, as of the end of each fiscal quarter for the quarter then ending.
 
(b)   Minimum Interest Coverage Ratio . The Borrower will maintain a ratio of the sum of Net Income plus interest expense plus income tax expense divided by interest expense, all as determined and consolidated in accordance with GAAP, of not less than 1.80 to 1.00, as of the end of each fiscal quarter for the four (4) quarters then ending.
 
For purposes of this Section 6.13, the following terms shall have the following meanings:
 
(i)   " Net Income " means, with respect to a specified twelve (12) month period, all operating and nonoperating income, less all operating and non-operating expenses, including depreciation, amortization and interest expenses, as determined and consolidated in accordance with GAAP.  In calculating Net Income, there shall be excluded extraordinary gains and losses, any revenues and expenses from disposition of capital assets and insurance policies (other than business interruption insurance proceeds) and condemnation awards).
 
(ii)   "Funded Debt" shall mean all obligations for the payment of money, incurred, assumed or guaranteed by the Borrower, whether due and payable in all events, or upon the performance of work, the possession of property as lessee or the rendering of services by others, including the Bonds.
 
Section 6.14   Payments of Taxes and Other Charges .
 
  The Borrower will pay or cause to be paid all taxes, assessments and other governmental charges to which the Borrower or its properties are or shall be subject before such charges become delinquent, except that no such charge need be paid for so long as its validity or amount shall be contested in good faith by appropriate proceedings duly prosecuted and the Borrower shall have set up on its books such reserve with respect thereto as shall be dictated by sound accounting practices.
 
Section 6.15   Reserved .
 
Section 6.16   Reserved .
 
Section 6.17   ERISA .
 
  The Borrower shall not:
 
(a)   fail to satisfy the minimum funding requirements of ERISA and the Internal Revenue Code with respect to any Plan;
 
(b)   request a minimum funding waiver from the Internal Revenue Service with respect to any Plan;
 
(c)   engage in a Prohibited Transaction with any Plan, Benefit Arrangement or Multiemployer Plan which, alone or in conjunction with any other circumstances or set of circumstances resulting in liability under ERISA, would constitute a Material Adverse Change;
 
(d)   permit the aggregate actuarial present value of all accumulated benefit obligations (whether or not vested) under each Plan, as disclosed in the most recent actuarial report completed with respect to such Plan, to exceed, as of any actuarial valuation date, the fair market value of the assets of such Plan;
 
(e)   fail to make when due any contribution to any Multiemployer Plan that the Borrower or any member of the ERISA Group may be required to make under any agreement relating to such Multiemployer Plan, or any Law pertaining thereto;
 
(f)   withdraw (completely or partially) from any Multiemployer Plan or withdraw (or be deemed under Section 4062(e) of ERISA to withdraw) from any Multiple Employer Plan, where any such withdrawal is likely to result in a material liability of the Borrower or any member of the ERISA Group;
 
(g)   terminate, or institute proceedings to terminate, any Plan, where such termination is likely to result in a material liability to the Borrower or any member of the ERISA Group;
 
(h)   make any amendment to any Plan with respect to which security is required under Section 307 of ERISA; or
 
(i)   fail to give any and all notices and make all disclosures and governmental filings required under ERISA or the Internal Revenue Code, where such failure is likely to result in a material adverse change.
 
Section 6.18   Amendments to Bond Documents .
 
  The Borrower will not consent to or enter into any amendment of, supplement to or replacement of the Bond Documents without the consent of the Bank.
 
Section 6.19   Liens and Encumbrances .
 
  The Borrower will not create, assume, incur or suffer to exist any Liens with respect to any of its property or assets, whether real, personal, mixed, or tangible or intangible, and whether now owned or hereafter acquired, or upon any income or profits therefrom, except Permitted Liens, provided the foregoing restriction shall not apply to or prevent (a) the pledges or deposits described in Section 6.10(a)(1), (3) and (4) of the Loan Agreement or (b) any judgment in the course of appeal or otherwise in contest or stay of legal proceedings, which judgment or stay is secured by sufficient bond or security.
 
Section 6.20   Change in Business .
 
  The Borrower will not make or permit any material change in the nature of its business as carried on as of the date hereof.
 
Section 6.21   Limitation on Optional Calls .
 
  The Borrower will not exercise its rights under the Bond Documents to direct the Issuer to call the Bonds for any optional redemption thereof, unless the Borrower first demonstrates to the reasonable satisfaction of the Bank that at the time of such redemption the Bank will be fully reimbursed for all drawings on the Letter of Credit in connection with such redemption.
 
Section 6.22   Reserved .
 

 
Section 6.23   Anti-Terrorism Laws .
 
  The Borrower and its Affiliates and agents shall not (i) conduct any business or engage in any transaction or dealing with any Blocked Person, including the making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order No. 13224; or (iii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order No. 13224, the USA Patriot Act or any other Anti-Terrorism Law.  The Borrower shall deliver to the Bank any certification or other reasonable evidence requested from time to time by the Bank in its sole discretion, confirming the Borrower's compliance with this Section 6.23.
 
ARTICLE VII
 
RESERVED
 
ARTICLE VIII
 
DEFAULTS AND REMEDIES
 
Section 8.01   Defaults .
 
  Each of the following shall constitute an event of default hereunder (" Event of Default "):
 
(a)   Certain Payments Under Agreement .  Failure by the Borrower to make or cause to be made when due any payment under this Agreement as (i) reimbursement for a Drawing, (ii) a Letter of Credit commitment fee, or (iii) interest on any such Drawing or commitment fee;
 
(b)   Other Payments Under Bank Documents .  Failure by the Borrower to make any other payment within ten (10) days of the date when it is due under this Agreement or any other Bank Document;
 
(c)   Certain Covenants .  Failure by the Borrower to perform or comply with its covenants contained in Section 6.05 (Visitation Rights) or Section 6.13 (Financial Covenants);
 
(d)   Other Covenants .  Failure by the Borrower to perform or comply with any of the other terms or conditions contained in any Bank Document and continuance of such failure for thirty (30) days after the earlier of written notice from the Bank to the Borrower, or such longer period to which Bank may agree in the case of a default not curable by the exercise of due diligence within such thirty (30) day period, or the Borrower has knowledge that such failure has occurred, provided that the Borrower shall have commenced to cure such default within such thirty (30) day period and shall complete such cure as quickly as reasonably possible with the exercise of due diligence;
 
(e)   Representations and Warranties . Any of the representations or warranties of the Borrower set forth in any Bank Document or any other document furnished to the Bank pursuant to the terms hereof is false or misleading in any material respect;
 
(f)   Invalidity, Etc. Any material provision of any Bank Document shall at any time for any reason cease to be valid and binding on the Borrower or shall be declared to be null and void, or shall be violative of any applicable Law relating to a maximum amount of interest permitted to be contracted for, charged or received, or the validity or enforceability thereof shall be contested by the Borrower or any Official Body, or the Borrower shall deny that it has any or further liability or obligation under any Bank Document;
 
(g)   Events of Default Under Other Transaction Documents . The occurrence of an Event of Default as defined in the Indenture or the Loan Agreement;
 
(h)   Bankruptcy, Insolvency, Etc. The Borrower shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or the like of the Borrower or of property of the Borrower, or (ii) admit in writing the inability of the Borrower, to pay its debts generally as they become due, or (iii) make a general assignment for the benefit of creditors, or (iv) be adjudicated a bankrupt or insolvent, or (v) commence a voluntary case under the United States Bankruptcy Code or file a voluntary petition or answer seeking reorganization, an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against the Borrower in any bankruptcy, reorganization or insolvency proceeding, or action of the Borrower shall be taken for the purpose of effecting any of the foregoing, or (vi) have instituted against it, if without the application, approval or consent of the Borrower, a proceeding in any court of competent jurisdiction, under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking in respect of the Borrower an order for relief or an adjudication in bankruptcy, reorganization, dissolution, winding up or liquidation, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of the Borrower or of all or any substantial part of the assets of the Borrower or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by the Borrower in good faith, the same shall (A) result in the entry of an order for relief or any such adjudication or appointment or (B) remain undismissed and undischarged for a period of sixty (60) days;
 
(i)   Dissolution; Cessation of Business .   The Borrower terminates its existence, ceases to exist, dissolves, permanently ceases operations or abandons the operation of any of its material businesses or facilities.
 
(j)   Litigation and Proceedings . Any litigation or administrative or other proceeding ensues, and is not dismissed within thirty (30) days, involving the Borrower or any instrument, contract or document delivered to the Bank in compliance with this Agreement, and the adverse result of such litigation or proceeding would, in the Bank's reasonable opinion, result in a Material Adverse Change;
 
(k)   Reserved.
 
(l)   Reserved.
 
(m)   Insurance . The Borrower fails to maintain in full force and effect any of the hazard or other insurance required pursuant to this Agreement and the other Bank Documents and continuance of such failure for ten (10) days;
 
(n)   ERISA Matters . There occurs a "reportable event" or a "prohibited transaction" on the part of the Borrower under ERISA which remains uncured for a period of thirty (30) days;
 
(o)   Tax Liens . A tax Lien shall be levied against the Borrower or its property, and the Borrower shall not satisfy such tax Lien within five (5) days of such levy, or the Borrower shall fail to promptly and diligently contest the validity or amount of such tax Lien in good faith by appropriate proceedings;
 
(p)   Judgments . The entry of a final judgment in an amount in excess of $500,000 against the Borrower and the failure of the Borrower to discharge such judgment within ten (10) days of the entry thereof;
 
(q)   Other Indebtedness . A default with respect to any other Indebtedness in excess of $500,000 in the aggregate of the Borrower, if the effect of such default is to cause or permit the acceleration of such Indebtedness;
 
(r)   Other Agreements with Bank . The occurrence of a default under any other agreement between the Borrower and the Bank; or
 
(s)   Material Adverse Change . The occurrence of any Material Adverse Change.
 
Section 8.02   Remedies .
 
  If an Event of Default has occurred and is continuing uncured, the Bank may at its option take all or any of the following actions:
 
(a)   Notify the Trustee of such Event of Default, direct the Trustee to declare an Event of Default, as defined in the Indenture, and direct the Trustee in writing to call the Bonds for mandatory purchase pursuant to the Indenture or to direct the Trustee to draw on the Letter of Credit, declare the principal of the outstanding Bonds, together with interest accrued thereon, to be due and payable immediately, and direct the Trustee to exercise remedies under the Bond Documents;
 
(b)   Declare the Borrower's Obligations hereunder to be, whereupon the same shall become, immediately due and payable;
 
(c)   Require the Borrower to deposit with the Bank as additional collateral for the Borrower's obligations under this Agreement, cash, cash equivalent and remarketable securities having market value of not less than the Letter of Credit Amount, as determined by the Bank; or
 
(d)   Exercise, or cause to be exercised, any and all such remedies as it may have under any of the Bank Documents, or at law or in equity.
 
Section 8.03   Waivers; Consents .
 
  No waiver of, or consent with respect to, any provision of this Agreement or any other Bank Document shall in any event be effective unless the same shall be in writing and signed by the Bank, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.
 
Section 8.04   No Waiver; Remedies Cumulative .
 
  No failure on the part of the Bank to exercise, and no delay in exercising, any right under this Agreement or any other Bank Document shall operate as a waiver thereof; and no single or partial exercise of any right hereunder shall preclude any other or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative and not exclusive of any remedies available under any other document or at law or in equity.
 
Section 8.05   Set-Off .
 
  Upon the occurrence and during the continuance of any Event of Default, the Bank is hereby authorized at any time and from time to time without notice to the Borrower (any such notice being expressly waived by the Borrower) and, to the fullest extent permitted by law, to set off and to apply any and all balances, credits, deposits (general or special, time or demand, provisional or final), accounts or monies at any time held and other indebtedness at any time owing by the Bank to or for the account of the Borrower against any and all of the Obligations of the Borrower now or hereafter existing under this Agreement or any other Bank Document, whether or not the Bank shall have made any demand hereunder or thereunder and although such obligations may be contingent or unmatured.  The rights of the Bank under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Bank may have.
 
ARTICLE IX
 
GENERAL PROVISIONS
 
Section 9.01   Notices .
 
  All notices and other communications provided for hereunder shall be in writing and deemed to have been given or made when:  (i) actually delivered by hand, or (ii) when received, if sent by telecopier, nationally recognized overnight courier or other authenticated delivery service, charges prepaid, and addressed as follows:
 
 
If to the Bank:
 
 
PNC Bank, National Association
 
 
4242 Carlisle Pike, 3rd Floor
 
 
Camp Hill, PA 17011
 
 
Attention:  Mary Balciar
 
 
Telecopier No.:  (717) 739-2387
 
 
with a copy to:
 
 
PNC Bank, National Association
 
 
3rd Floor Firstside Center
 
 
500 First Avenue
 
 
Pittsburgh, Pennsylvania 15219
 
 
Attention:  Trade Services Operations
 
 
Telecopier No.:  (412) 705-0966
 
 
If to the Borrower:
 
 
The York Water Company
 
 
130 East Market Street
 
 
York, PA 17401
 
 
Attention:  Chief Financial Officer
 
 
Telecopier No.:  (717) 718-3090
 
 
If to the Trustee:
 
 
Manufacturers and Traders Trust Company
 
 
213 Market Street
 
 
Harrisburg, Pennsylvania 17401
 
 
Attention:  Corporate Trust Department
 
 
Telecopier No.:  (717) 231-2615
 
 
If to the Remarketing Agent:
 
 
PNC Capital Markets, Inc.
 
 
1600 Market Street, 21 st Floor
 
 
Philadelphia, Pennsylvania 19103
 
 
Attention:  Manager-Remarketing Desk
 
Telecopier:
(215) 585-1463
 
Any such notice to the Bank shall refer to this Agreement and to the Letter of Credit by its number.  Either party hereto and the Trustee and the Remarketing Agent may change the address to which notices to it are to be sent by written notice given to the other Persons listed in this Section.
 
Section 9.02   Successors and Assigns .
 
  This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns.  The Borrower may not assign its rights under this Agreement without the prior written consent of the Bank.  The Bank will not assign its obligations under the Letter of Credit without the prior written confirmation of the rating of the Bonds by the agency rating the Bonds.  The Borrower and the Bank intend that no other Person shall have any claim or interest under this Agreement or right of action hereon or hereunder.
 
Section 9.03   Survival of Covenants .
 
  All covenants made by the Borrower herein and in the other Bank Documents shall survive the delivery of this Agreement and the Letter of Credit and any advances under the Letter of Credit.
 
Section 9.04   Counterparts .
 
  Each Bank Document may be signed in any number of counterpart copies and by the parties to such Bank Document on separate counterparts, but all such copies shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to any Bank Document by facsimile transmission shall be as effective as delivery of a manually executed counterpart.  Any party executing any Bank Document by facsimile transmission shall promptly deliver a manually executed counterpart; provided that the failure to do so shall not affect the validity of the counterpart executed and delivered by facsimile transmission.
 
Section 9.05   Costs, Expenses and Taxes .
 
  The Borrower agrees to pay on demand all costs and expenses of the Bank in connection with the preparation, execution, delivery and administration of the Transaction Documents or any amendments, supplements or waivers thereto, including, without limitation, the reasonable fees and expenses of counsel for the Bank with respect thereto and with respect to advising the Bank as to its rights and responsibilities under the Transaction Documents, and all costs and expenses, if any, including without limitation reasonable counsel fees and expenses of the Bank, in connection with the enforcement of such documents.  In addition, the Borrower shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution and delivery of the Transaction Documents and any other documents which may be required by the Bank hereunder and agrees to indemnify and to hold the Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees.
 
Section 9.06   Amendments and Waivers .
 
  This Agreement and the other Bank Documents may be amended only by an instrument in writing executed by all parties to such Bank Document.  The provisions of any Bank Document may be waived only by a writing executed by the Bank.  No amendment of this Section 9.06 may be made without the prior written consent of the Trustee.  The Rating Agency (as defined in the Indenture), if it has rated and continues to rate the Bonds, shall receive prior written notice of all amendments.
 
Section 9.07   Severability; Interest Limitation .
 
  If any provision hereof is found by a court of competent jurisdiction to be prohibited or unenforceable in any jurisdiction, it shall be ineffective as to such jurisdiction only to the extent of such prohibition or unenforceability, and such prohibition or unenforceability shall not invalidate the balance of such provision as to such jurisdiction to the extent it is not prohibited or unenforceable, nor invalidate such provision in any other jurisdiction, nor invalidate the other provisions hereof, all of which shall be liberally construed in favor of the Bank in order to effect the provisions of this Agreement.  Notwithstanding anything to the contrary herein contained, the total liability of the Borrower for payment of interest pursuant hereto shall not exceed the maximum amount, if any, of such interest permitted by applicable Law to be contracted for, charged or received, and if any payments by the Borrower to the Bank include interest in excess of such a maximum amount, the Bank shall apply such excess to the reduction of the unpaid principal amount due pursuant hereto, or if none is due, such excess shall be refunded to the Borrower; provided that , to the extent permitted by applicable Law, in the event the interest is not collected, is applied to principal or is refunded pursuant to this sentence and interest thereafter payable pursuant hereto shall be less than such maximum amount, then such interest thereafter so payable shall be increased up to such maximum amount to the extent necessary to recover the amount of interest, if any, theretofore uncollected, applied to principal or refunded pursuant to this sentence.  Any such application or refund shall not cure or waive any Event of Default.  In determining whether or not any interest payable under this Agreement exceeds the highest rate permitted by law, any nonprincipal payment (except payments specifically stated in this Agreement to be " interest ") shall be deemed, to the extent permitted by applicable law, to be an expense, fee, premium or penalty rather than interest.
 
Section 9.08   Complete Agreement .
 
  Taken together with the other Bank Documents and any other instruments and documents delivered in compliance herewith, this Agreement is a complete memorandum of the agreement of the Borrower and the Bank.
 
Section 9.09   Participation .
 
  Notwithstanding any other provision of this Agreement, the Borrower understands that the Bank may at any time enter into participation agreements with one or more participating banks (" Participating Banks ") whereby the Bank will allocate to the Participating Banks certain percentages of the funding obligations of the Bank under the Letter of Credit.  The Borrower agrees to assist the Bank in obtaining Participating Banks, including, without limitation, the submission of any additional information requested by any potential Participating Bank.  Nothing contained in this Section 9.09 shall affect the Bank's obligations and liabilities under the Letter of Credit.
 
Section 9.10   Governing Law and Jurisdiction .
 
  This Agreement has been delivered to and accepted by the Bank and will be deemed to be made in the State.  This Agreement will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State, excluding its conflict of laws rules.  The Borrower hereby agrees to the jurisdiction of any state or federal court located within the county where the Bank's office indicated in Section 9.01 is situated, or such other venue as the Bank chooses, and consents that all service of process be sent by nationally recognized overnight courier service directed to the Borrower at the Borrower's address set forth herein for notices and service so made will be deemed to be completed on the Business Day after deposit with such courier; provided that nothing contained in this Agreement will prevent the Bank from bringing any action or exercising any rights against any security or against the Borrower individually, or against any property of the Borrower within any other state or nation to enforce any award or judgment obtained in the venue provided above, or such other venue as the Bank chooses.  The Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Agreement.
 
Section 9.11   Headings .
 
  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement of any other purpose.
 
Section 9.12   WAIVER OF JURY TRIAL .
 
  THE BORROWER AND THE BANK WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT OR ANY OF THE OTHER BANK DOCUMENTS OR ANY OF THE TRANSACTIONS RELATED TO ANY OF THE BANK DOCUMENTS.  THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY THE BORROWER AND THE BANK AND THE BORROWER AND THE BANK ACKNOWLEDGE THAT NEITHER THE BORROWER NOR THE BANK NOR ANY PERSON ACTING ON BEHALF OF THE BORROWER OR THE BANK HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.  THE BORROWER AND THE BANK FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.  THE BORROWER AND THE BANK FURTHER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE MEANING OF THIS WAIVER PROVISION.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 

 
 
 

[SIGNATURE PAGE TO REIMBURSEMENT, CREDIT AND SECURITY AGREEMENT]
 
IN WITNESS WHEREOF , the Borrower and the Bank have caused this Reimbursement, Credit and Security Agreement to be duly executed and delivered as of the date first above written.
 
 
THE YORK WATER COMPANY
 
ATTEST/WITNESS:
     
By: /s/Bruce C. McIntosh
B y:
/s/Jeffrey R. Hines  
Bruce C. McIntosh    Jeffrey R. Hines  
Secretary    President and CEO  
 
     
  PNC BANK, NATIONAL ASSOCIATION  
       
 
By:
/s/Mary R. Balciar    
    Mary R. Balciar  
    Vice President  
       
 
 
 
 
 
 

EXHIBIT A
 
FORM OF PNC BANK, NATIONAL ASSOCIATION
 
IRREVOCABLE LETTER OF CREDIT
 
May 7, 2008
 
Irrevocable Letter of Credit No. 18109378-00-000
 
Manufacturers and Traders Trust Company
 
213 Market Street
 
Harrisburg, Pennsylvania 17101
 
Attn:                      Corporate Trust Department
 
Re:
$12,000,000 Pennsylvania Economic Development
 
 
Financing Authority
 
 
Exempt Facilities Revenue Refunding Bonds, Series A of 2008
 
 
(The York Water Company Project) (the " Bonds ")
 
Gentlemen:
 
1.           At the request and for the account of THE YORK WATER COMPANY (the " Borrower "), we (the " Bank ") establish in your favor as Trustee under the Trust Indenture dated as of May 1, 2008 (as the same has been and may from time to time be supplemented or amended, the " Indenture ") for the benefit of the Bondholders (as defined in the Indenture) between the Pennsylvania Economic Development Financing Authority (the " Issuer ") and you, pursuant to which the Bonds are being issued for the benefit of the Borrower, this irrevocable letter of credit (this " Letter of Credit ") in the aggregate amount of $12,185,425 (as from time to time reduced and reinstated as provided in this Letter of Credit, the " Letter of Credit Amount ").  Such Letter of Credit Amount shall be available for drawing by you as set forth below in amounts not to exceed (a) $12,000,000 (as from time to time reduced and reinstated as provided in this Letter of Credit, the " Principal Component ") with respect to unpaid principal of the Bonds and (b) $185,425 (as from time to time reduced and reinstated as provided in this Letter of Credit, the " Interest Component ") with respect to accrued interest on the Bonds.
 
2.           This Letter of Credit shall expire at 5:00 p.m. local time in Pittsburgh, Pennsylvania, on the date (the " Expiration Date ") which is the earliest of: (a) May 6, 2011, unless extended by us (the " Scheduled Expiration Date ") (it being understood that we shall be under no obligation herein to grant any such extension), (b) the date of payment of a Final Payment Drawing (as defined below), (c) the date on which we receive a certificate from you on the form of Annex 7 attached hereto, appropriately completed and executed, to the effect that there are no Outstanding Bonds (as defined in the Indenture) other than Bonds secured by an Alternate Credit Facility (as defined in the Indenture) or (d) the date when you surrender this Letter of Credit to the Bank for cancellation.  You agree to surrender this Letter of Credit to us, and not to make any Drawing, after the Expiration Date.
 
3.           Subject to the provisions of this Letter of Credit, demands for payment under this Letter of Credit may be made by you from time to time prior to the Expiration Date by presentation of your certificate in the form of (a)  Annex 1   hereto, appropriately completed and executed, in the case of a drawing for interest on the Bonds under Section 2C.2 of the Indenture (an " Interest Drawing "), (b)  Annex 2 hereto, appropriately completed and executed, in the case of a drawing for principal of the Bonds under Section 2C.2 (if less than all of the Outstanding Bonds are being redeemed) of the Indenture (a " Principal Drawing "), (c)  Annex 3 hereto, appropriately completed and executed, in the case of a drawing for the purchase price of any Bonds under Section 2B.5 of the Indenture (a " Liquidity Drawing "), and (d)  Annex 4 hereto, appropriately completed and executed, in the case of a final drawing for principal of and/or interest on all Outstanding Bonds (as defined in the Indenture) due upon purchase, redemption or payment at maturity under Section 2B.5 or 2C.2 (if all of the Outstanding Bonds are being purchased upon a mandatory tender or redeemed) of the Indenture or upon acceleration of the Outstanding Bonds under Section 7.2 of the Indenture (the " Final Payment Drawing ") (each such demand and presentation, a " Drawing ").  Payment against conforming documents presented under this Letter of Credit prior to 12:00 noon on any Business Day shall be made by us at or before 10:00 a.m. on the next succeeding Business Day or, in the case of presentation after 12:00 noon, at or before 3:00 p.m. on the next succeeding Business Day; provided, however, that with respect to a Liquidity Drawing, payment against conforming documents presented under this Letter of Credit prior to 11:00 a.m. on any Business Day shall be made by us at or before 3:00 p.m. on the same Business Day.  If requested by you, payment under this Letter of Credit may be made by deposit of immediately available funds into a designated account that you maintain with us, a wire transfer of immediately available funds or by our check, all in accordance with your instructions.  Partial drawings are permitted under this Letter of Credit.  All payments by us under this Letter of Credit will be made with our own funds.
 
4.           As used in this Letter of Credit " Business Day " means any day other than (i) a Saturday or Sunday, (ii) a day on which commercial banking institutions in Pittsburgh, Pennsylvania or in any other city where either the principal corporate trust office of the Trustee or the office of the Bank at which drafts are to be presented under the Letter of Credit is located are required or authorized by law (including executive order) to close or on which any such office is closed for reasons not related to financial condition, or (iii) a day on which the New York Stock Exchange is closed.  References to any time of day shall refer to Eastern standard time or Eastern daylight savings time, as in effect in Pittsburgh, Pennsylvania on such day.
 
5.           Each Drawing honored by us under this Letter of Credit shall immediately reduce the Principal Component or the Interest Component (as the case may be) by the amount of such payment, and the Letter of Credit Amount available hereunder shall also be correspondingly reduced.  Upon such honor, our obligations in respect of such Drawing shall be discharged, and we shall have no further obligation in respect of such Drawing. The Principal Component and the Interest Component (and correspondingly the Letter of Credit Amount) so reduced shall be reinstated only as follows:
 
(a)           In the case of a reduction resulting from payment against an Interest Drawing, the Interest Component shall be reinstated automatically as of our opening of business in Pittsburgh, Pennsylvania on the tenth (10th) Business Day following the date of such payment by an amount equal to the amount of such Interest Drawing, unless you shall have received notice from us in writing not later than the close of business on the ninth (9th) Business Day following the date of such payment that such reinstatement shall not occur because an Event of Default has occurred under the Reimbursement, Credit and Security Agreement dated as of May 1, 2008 between the Borrower and us.
 
(b)           In the case of a reduction resulting from payment against a Liquidity Drawing with regard to any Bonds, the Principal Component and, if applicable, the Interest Component with respect to such Bonds shall be reinstated (i) automatically when and to the extent that both (A) we have received reimbursement for such drawing in immediately available funds from the Borrower (or you have received immediately available funds which, pursuant to Section 2B.1(g) or 2B.2(f) of the Indenture, you will immediately remit to us as reimbursement for such drawing, such funds to be remitted to the attention of our Letter of Credit Department stating that they are repayments for Liquidity Drawings drawn under PNC Bank, National Association Irrevocable Letter of Credit No. 18109378-00-000) and (B) you have delivered to us a certificate in respect of such reinstatement in the form of Annex 5 attached hereto, appropriately completed and executed, or (ii) when and to the extent that we, at our option, upon the Borrower's request, otherwise advise you in writing that such reinstatement shall occur, it being understood that we shall have no obligation to grant any such reinstatement except as provided in clause (i) of this sentence.  We will give telephonic confirmation (to be further confirmed in writing) to you of each reinstatement pursuant to clause (i) of the preceding sentence.
 
(c)           The Principal Component and the Interest Component shall otherwise be reinstated as we may from time to time notify you in writing.
 
6.           The Letter of Credit Amount and the respective Principal and Interest Components thereof shall be reduced automatically, without notice to you, upon our receipt from you of a certificate in the form of Annex 6 attached hereto appropriately completed and executed, each such reduction to be (a) in the amounts necessary to reduce the Letter of Credit Amount and the Principal and Interest Components thereof to the respective amounts specified by you in such certificate and (b) effective on the Business Day on which we receive such certificate from you.
 
7.           All documents presented to us in connection with any Drawing, and all other communications and notices to us with respect to this Letter of Credit, shall be in writing, dated the date of presentation, and delivered to us at the address set forth on the letterhead of this Letter of Credit and shall specifically refer to "PNC Bank, National Association Irrevocable Letter of Credit No. 18109378-00-000."  Any such documents, communications and notices may be made by delivery in person, first class United States mail or nationally-recognized courier services (postage prepaid) at the office of PNC Bank, National Association, Third Floor, Firstside Center, 500 First Avenue, Pittsburgh, PA  15219, Attn: Trade Services Operations, or by facsimile transmission to  (412) 705-0966 (with hard copy of any transmission to follow by overnight courier).
 
8.           No person other than you as Trustee or a successor Trustee under the Indenture may make any demand for payment under this Letter of Credit.  This Letter of Credit is transferable in its entirety only to any transferee who has succeeded you as Trustee under the Indenture and may be successively transferred to any subsequent successor Trustee under the Indenture, in each case upon presentation to us of the original of this Letter of Credit accompanied by a certificate in the form of Annex 8 hereto.
 
9.           This Letter of Credit sets forth in full the terms of our undertaking, and this undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein or in which this Letter of Credit is referred to or to which this Letter of Credit relates, except only the certificates referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement, except such certificates.  All certificates referred to herein that are presented to us from time to time shall become an integral part of this Letter of Credit and shall be binding on any transferee permitted by the terms of this Letter of Credit.
 
10.           Except as herein specifically otherwise provided, this Letter of Credit shall be subject to the ISP.  "ISP" shall mean the International Standby Practices, International Chamber of Commerce Publication No. 590, and any subsequent official revision thereof.  This Letter of Credit shall be deemed to be issued under the laws of the Commonwealth of Pennsylvania and shall, as to matters not governed by the ISP, be governed by and construed in accordance with the internal laws (as opposed to conflicts of law provisions) of said Commonwealth.
 
Very truly yours,
 

  PNC BANK, NATIONAL ASSOCIATION  
       
 
By:
/s/Mary R. Balciar    
    Mary R. Balciar  
    Vice President  
       

 
 
 
 

ANNEX 1 to PNC Bank, National Association
 
Irrevocable Letter of Credit No. 18109378-00-000
 
PNC Bank, National Association
 
3rd Floor, Firstside Center
 
500 Fifth Avenue
 
Pittsburgh, Pennsylvania 15219
 
Attention:  Trade Services Operation
 
 
Certificate for Interest Drawing of Accrued Interest on Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project) Issued by the Pennsylvania Economic Development Financing Authority
 
The undersigned, a duly authorized officer of Manufacturers and Traders Trust Company, as Trustee (the " Trustee ") under the Indenture under which the Bonds have been issued, hereby certifies, with reference to Irrevocable Letter of Credit No. 18109378-00-000 (the " Letter of Credit ") issued by PNC Bank, National Association (the " Bank ") in favor of the Trustee (the capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Letter of Credit), that:
 
1.           The Trustee is the Trustee under the Indenture securing the Bonds and is entitled to present this certificate.
 
2.           Pursuant to Section 2C.2 of the Indenture, the Trustee is drawing on you in the amount of $_______________.  Such amount represents _______________ days accrued interest on the Bonds.  Such amount does not include any amount accrued on Pledged Bonds (as defined in the Indenture) or Bonds registered in the name of the Borrower, was computed in accordance with the terms and conditions of the Indenture and does not exceed the amount available to be drawn under the Letter of Credit in respect of interest on the Bonds.
 
3.           The Trustee demands payment of the amount specified in Paragraph 2 above.
 
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the _____ day of _______________, 200_____.
 
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
 

 
By                                                                
 
Name                                                                
 
Title                                                                
 

 
 
 
 

ANNEX 2 to PNC Bank, National Association
 
Irrevocable Letter of Credit No. 18109378-00-000
 
PNC Bank, National Association
 
3rd Floor, Firstside Center
 
500 Fifth Avenue
 
Pittsburgh, Pennsylvania 15219
 
Attention:  Trade Services Operation
 
 
Certificate for Principal Drawing in Respect of Principal of Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project) Issued by the Pennsylvania Economic Development Financing Authority
 
The undersigned, a duly authorized officer of Manufacturers and Traders Trust Company, as Trustee (the " Trustee ") under the Indenture under which the Bonds have been issued, hereby certifies, with reference to Irrevocable Letter of Credit No. 18109378-00-000 (the " Letter of Credit ") issued by PNC Bank, National Association (the " Bank ") in favor of the Trustee (the capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Letter of Credit), that:
 
1.           The Trustee is the Trustee under the Indenture securing the Bonds and is entitled to present this certificate.
 
2.           Pursuant to Section 2C.2 of the Indenture, the Trustee is drawing on you in the amount of $_______________.  Such amount represents payments of principal due with respect to the Bonds on _______________ under Section 2.2 of the Indenture.  Such amount does not include any amount in respect of Pledged Bonds (as defined in the Indenture) or any Bonds registered in the name of the Borrower, is equal to the amount of principal due on the Bonds on such date in accordance with the terms and conditions of the Indenture and does not exceed the amount available to be drawn under the Letter of Credit in respect of principal of the Bonds.
 
3.           The Trustee demands payment of the amount specified in Paragraph 2 above.
 
IN WITNESS WHEREOF , the Trustee has executed and delivered this certificate this _____ day of _______________, 200_____.
 
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
 

 
By                                                             
 
Name                                                             
 
Title                                                             
 

 
 
 
 

ANNEX 3 to PNC Bank, National Association
 
Irrevocable Letter of Credit No. 18109378-00-000
 
PNC Bank, National Association
 
3rd Floor, Firstside Center
 
500 Fifth Avenue
 
Pittsburgh, Pennsylvania 15219
 
Attention:  Trade Services Operation
 
 
Certificate for Liquidity Drawing in Respect of the Purchase Price of Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project) Issued by the Pennsylvania Economic Development Financing Authority
 
The undersigned, a duly authorized officer of Manufacturers and Traders Trust Company, as Trustee (the " Trustee ") under the Indenture under which the Bonds have been issued, hereby certifies, with reference to Irrevocable Letter of Credit No. 18109378-00-000 (the " Letter of Credit ") issued by PNC Bank, National Association (the " Bank ") in favor of the Trustee (the capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Letter of Credit), that:
 
1.           The Trustee is the Trustee under the Indenture securing the Bonds and is entitled to present this certificate.
 
2.           Pursuant to Section 2B.5 of the Indenture, the Trustee is drawing on you in the amount of $_______________.  Such amount represents the principal portion in the amount of $_______________ and the accrued interest portion in the amount of $_______________ of the purchase price of Bonds, tendered to the Trustee and not successfully remarketed by the Remarketing Agent (as defined in the Indenture) or remarketed but for which the purchase price has not been received by the Trustee on the date hereof.  Such amount does not include any amount in respect of Pledged Bonds (as defined in the Indenture) or any Bonds registered in the name of the Borrower, was computed in accordance with the terms and conditions of the Indenture and does not exceed the amount available to be drawn under the Letter of Credit in respect of principal of, and interest on, such Bonds.
 
3.           The Trustee is holding as agent for the Bank, Bonds in the principal amount of $_______________, which amount represents the amount of the principal portion of the Bonds in respect of which a draw is being made on the Letter of Credit pursuant to this certificate.
 
4.           The Trustee demands payment of the amount specified in Paragraph 2 above.
 
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate this _____ day of _______________, 200_____.
 
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
 

 
By                                                             
 
Name                                                             
 
Title                                                             
 

 
 
 
 

ANNEX 4 to PNC Bank, National Association
 
Irrevocable Letter of Credit No. 18109378-00-000
 
PNC Bank, National Association
 
3rd Floor, Firstside Center
 
500 Fifth Avenue
 
Pittsburgh, Pennsylvania 15219
 
Attention:  Trade Services Operation
 
 
Certificate for Final Payment Drawing in Respect of Principal and Accrued Interest on Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project) Issued by the Pennsylvania Economic Development Financing Authority
 
The undersigned, a duly authorized officer of Manufacturers and Traders Trust Company, as Trustee (the "Trustee") under the Indenture under which the Bonds have been issued, hereby certifies, with reference to Irrevocable Letter of Credit No. 18109378-00-000 (the "Letter of Credit") issued by PNC Bank, National Association (the "Bank") in favor of the Trustee (the capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Letter of Credit), that:
 
1.           The Trustee is the Trustee under the Indenture securing the Bonds and is entitled to present this certificate.
 
2.           Pursuant to Section 2B.5 or 2C.2 of the Indenture, the Trustee is drawing on you in the amount of $_______________.  Such amount represents an unpaid principal amount of $_______________ and/or _______________ days' accrued interest in the amount of $_______________ due upon purchase (pursuant to a mandatory tender) or redemption or payment at maturity under Section 2B.5 of the Indenture or upon acceleration of the Bonds under Section 7.2 of the Indenture.  Such amount does not include any amount in respect of Pledged Bonds (as defined in the Indenture) or any Bonds registered in the name of the Borrower, was computed in accordance with the terms and conditions of the Indenture and does not exceed the amount available to be drawn under the Letter of Credit in respect of principal of, and interest on, the Bonds.
 
3.           The Trustee demands payment of the amount specified in Paragraph 2 above.
 
4.           Upon receipt of payment of the amount specified in Paragraph 2 above, the Letter of Credit will be promptly surrendered.
 
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate this _____ day of _______________, 200 _ .
 
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
 

 
By                                                             
 
Name                                                             
 
Title                                                             
 

 
 
 
 

ANNEX 5 to PNC Bank, National Association
 
Irrevocable Letter of Credit No. 18109378-00-000
 
PNC Bank, National Association
 
3rd Floor, Firstside Center
 
500 Fifth Avenue
 
Pittsburgh, Pennsylvania 15219
 
Attention:  Trade Services Operation
 
 
Liquidity Drawing Reinstatement Certificate for PNC Bank, National Association (the "Bank") Irrevocable Letter of Credit No. 18109378-00-000 (the "Letter of Credit") Supporting Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project) Issued by the Pennsylvania Economic Development Financing Authority
 
The undersigned, a duly authorized officer of Manufacturers and Traders Trust Company, as Trustee (the " Trustee ") under the Indenture under which the Bonds have been issued,  hereby certifies, with reference to the Letter of Credit issued by the Bank in favor of the Trustee (the capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Letter of Credit), that:
 
1.           The Trustee is the Trustee under the Indenture securing the Bonds and is entitled to present this Certificate.
 
2.           On the date of this Certificate $_______________ aggregate principal amount of Bonds are being purchased upon a remarketing thereof by the Remarketing Agent (as defined in the Indenture).  All of such Bonds were heretofore purchased (or anticipated to be purchased) with the proceeds of one or more Liquidity Drawings in the total drawing amount, with respect to such Bonds, of $_______________, of which proceeds $_______________ was drawn in respect of principal of such Bonds and $_______________ was drawn in respect of accrued interest on such Bonds.  Prior to the date of this Certificate there has been no reinstatement of the Letter of Credit Amount with respect to amounts drawn by such Liquidity Drawings to purchase such Bonds.
 
3.           The Trustee has received for immediate payment (or repayment) to the Bank in respect of the Bonds described in Paragraph 2 of this Certificate the total amount of $_______________, consisting of $_______________ from the Remarketing Agent, $_______________ from the Borrower and $_______________ from the Bank.  Such total amount is being paid to the Bank with reference to this Letter of Credit pursuant to Section 2B.1(g) or 2B.2(f) of the Indenture, as reimbursement for amounts drawn under the Letter of Credit by the Liquidity Drawings described in Paragraph 2 of this Certificate; provided that, unless such reimbursement is being made on the same day that payment of such Liquidity Drawings was received by the Trustee from the Bank, the Bonds described in Paragraph 2 of this Certificate will be released for remarketing and such payment to the Bank will be made only upon receipt of telephonic confirmation by the Bank of the reinstatement described in Paragraph 6 below to the Trustee at (_____) _____-__________, Attention:  _______________ (which confirmation shall thereafter be sent in writing to the Trustee at its address on file with you).
 
4.           Of the total amount referred to in Paragraph 3 of this Certificate, $_______________ represents the aggregate principal amount of Bonds described in Paragraph 2 of this Certificate and $_______________ represents accrued interest on such Bonds.
 
5.           Payment of the total amount referred to in Paragraph 3 of this Certificate, together with other amounts heretofore paid to the Bank by or on behalf of the Borrower, represents reimbursement for the entire outstanding balance of all amounts drawn in respect of the Bonds described in Paragraph 2 of this Certificate.  The foregoing certification is made in reliance upon representations by the Borrower or the Bank to the Trustee that, upon payment of such amounts, the Bank will be fully reimbursed for all Liquidity Drawings (or allocable portions thereof) made to purchase such Bonds.  No certification is made by the Trustee as to the payment of interest accrued pursuant to the Reimbursement Agreement described in the Letter of Credit on the amounts drawn by such Liquidity Drawings.
 
6.           Pursuant to Paragraph 5(b) of the Letter of Credit, the Letter of Credit Amount shall be automatically reinstated by an amount equal to $_______________ (which does not exceed the aggregate amount of the Liquidity Drawings, or allocable portions thereof, paid by the Bank to purchase such Bonds), of which $_______________ (which does not exceed the aggregate amount of such Liquidity Drawings, or allocable portions thereof, drawn against the Principal Component) shall be applied to the Principal Component and $_______________ (which does not exceed the aggregate amount of such Liquidity Drawings, or allocable portions thereof, drawn against the Interest Component) shall be applied to the Interest Component.
 
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate this _____ day of _______________, 200_____.
 
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
 

 
By                                                             
 
Name                                                             
 
Title                                                             
 

 
 
 
 

ANNEX 6 to PNC Bank, National Association
 
Irrevocable Letter of Credit No. 18109378-00-000
 
PNC Bank, National Association
 
3rd Floor, Firstside Center
 
500 Fifth Avenue
 
Pittsburgh, Pennsylvania 15219
 
Attention:  Trade Services Operation
 
 
Certificate for Reducing PNC Bank, National Association (the "Bank") Irrevocable Letter of Credit No. 18109378-00-000 (the "Letter of Credit") Supporting Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project) Issued by the Pennsylvania Economic Development Financing Authority
 
The undersigned, a duly authorized officer of Manufactures and Traders Trust Company, as Trustee (the " Trustee ") under the Indenture under which the Bonds have been issued, hereby certifies (the capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Letter of Credit), that:
 
1.           The Trustee is the Trustee under the Indenture securing the Bonds and is entitled to present this certificate.
 
2.           The Trustee hereby notifies you that on or prior to the date of this certificate, $_______________ in principal amount of the Bonds have been redeemed, defeased or otherwise are no longer outstanding pursuant to the Indenture.
 
3.           Pursuant to the terms of the Letter of Credit, the Bank is hereby directed to reduce the Letter of Credit Amount and the Principal and Interest Components thereof, effective on the Business Day on which you receive this certificate, so that after such reduction, the Letter of Credit Amount shall be $_______________, of which $_______________ shall be the Principal Component and $_______________ shall be the Interest Component, (calculated on the basis of 47 days' accrued interest at a rate of 12% per annum), less the amount, if any, drawn with Liquidity Drawings to purchase Outstanding Bonds in respect of which the Letter of Credit has not been reinstated.
 
4.           The foregoing amounts were computed in accordance with the terms and conditions of the Indenture.
 
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate this _____ day of _______________, 200_____.
 
MANUFACTURES AND TRADERS TRUST COMPANY, as Trustee
 

 
By                                                             
 
Name                                                             
 
Title                                                             
 

 
 
 
 

ANNEX 7 to PNC Bank, National Association
 
Irrevocable Letter of Credit No. 18109378-00-000
 
PNC Bank, National Association
 
3rd Floor, Firstside Center
 
500 Fifth Avenue
 
Pittsburgh, Pennsylvania 15219
 
Attention:  Trade Services Operation
 
 
Certificate for Terminating PNC Bank, National Association (the "Bank") Irrevocable Letter of Credit No. 18109378-00-000 (the "Letter of Credit") Supporting Exempt Facilities Revenue Refunding Bonds, Series A of 2008 (The York Water Company Project) Issued by the Pennsylvania Economic Development Financing Authority
 
The undersigned, a duly authorized officer of Manufacturers and Traders Trust Company, as Trustee (the " Trustee ") under the Indenture under which the Bonds have been issued, hereby certifies (the capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Letter of Credit) that:
 
1.           The Trustee is the Trustee under the Indenture for the holders of the Bonds.
 
2.           Pursuant to the Indenture and the Letter of Credit, the Letter of Credit shall be terminated on the date the Bank receives this Certificate, and the Trustee is herewith surrendering the Letter of Credit for cancellation, because no Bonds remain outstanding other than Bonds secured by an Alternate Credit Facility.
 
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate this _____ day of _______________, 200_____.
 
MANUFACTURERS AND TRADERS TRUST COMPANY, as Trustee
 

 
By                                                             
 
Name                                                             
 
Title                                                             
 

 
 
 
 

ANNEX 8 to PNC Bank, National Association
 
Irrevocable Letter of Credit No. 18109378-00-000
 
PNC Bank, National Association
 
3rd Floor, Firstside Center
 
500 Fifth Avenue
 
Pittsburgh, Pennsylvania 15219
 
Attention:  Trade Services Operation
 
 
Re:
PNC Bank, National Association
 
 
Irrevocable Letter of Credit No. 18109378-00-000
 
Ladies and Gentlemen:
 
For value received, the undersigned beneficiary hereby irrevocably transfers to:
 
(Name of Transferee)
 
(Address)
 
all rights of the undersigned beneficiary to draw under the above Letter of Credit in its entirety.  Said transferee has succeeded to the undersigned as Trustee under the Indenture which incorporated the Indenture.  The capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Letter of Credit.
 
By this transfer, all rights of the undersigned beneficiary in such Letter of Credit are transferred to the transferee and the transferee shall have the sole rights as beneficiary thereof, including sole rights relating to any amendments whether increases or extensions or other amendments and whether now existing or hereafter made.  All amendments are to be advised direct to the transferee without necessity of any consent of or notice to the undersigned beneficiary.
 
The original of such Letter of Credit is returned herewith, and in accordance therewith we ask you to transfer the Letter of Credit to the transferee and forward it directly to the transferee with your customary notice of transfer, or that, at your option, you issue a new irrevocable letter of credit in favor of the transferee with provisions consistent with the Letter of Credit.
 
Very truly yours,
 

 
SIGNATURE AUTHENTICATED MANUFACTURES AND TRADERS TRUST COMPANY, as Trustee
 

 
By:                                                             
 
Name                                                             
 
Title                                                             
 

 
 
 
 

EXHIBIT B
 
REQUIREMENTS FOR OPINION OF BORROWER'S COUNSEL
 
1.  
The Company is a corporation, validly subsisting and authorized to transact business under the laws of the Commonwealth of Pennsylvania, with full corporate power to own its properties and conduct its business as described in the Official Statement.
 
2.  
The Company has full corporate power and authority to enter into the Reimbursement Agreement and the Loan Agreement, and the Reimbursement Agreement and the Loan Agreement have been duly authorized, executed and delivered by the Company and are valid and binding agreements of the Company, enforceable against the Company in accordance with their terms.
 
3.  
The Company has obtained all requisite approvals, licenses and permits (collectively, “Approvals”) to enter into and perform its obligations under the Reimbursement Agreement and the Loan Agreement, including, but not limited to, any Approvals required by the Pennsylvania Public Utility Commission, but excluding any state Blue Sky or related state security clearances or approvals, as to which no opinion is expressed.
 
4.  
To our knowledge, except as may be disclosed in the Official Statement, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or threatened against or affecting the Company or to which the Company is a party or to which property of the Company is subject, wherein an unfavorable decision, ruling or finding would materially and adversely affect the Company, or which would materially and adversely affect the transactions contemplated by the Reimbursement Agreement or the Loan Agreement, or affect in any way the validity of the Reimbursement Agreement or the Loan Agreement.
 
5.  
The execution and delivery by the Company of the Reimbursement Agreement and the Loan Agreement, and compliance by the Company with the provisions thereof, do not and will not (i) result in a violation of the Articles of Incorporation or Bylaws of the Company, or (ii) in any material respect conflict with or constitute, on the part of the Company, a breach of or default under any existing law or ordinance, or any material agreement or material instrument known to us to which the Company is a party, or any administrative regulation, court order or consent decree known to us to which the Company is subject.
 
The above opinions are subject standard qualifications, limitations, assumptions and exceptions, including, without limitation, bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other laws affecting the rights of creditors generally and general principles of equity.