LOAN AGREEMENT BETWEEN YORK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (THE "ISSUER") AND THE YORK WATER COMPANY (THE "COMPANY") DATED AS OF JULY 1, 2015

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EXHIBIT 10.1

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BETWEEN

YORK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

(THE "ISSUER")

AND

THE YORK WATER COMPANY

(THE "COMPANY")

DATED AS OF JULY 1, 2015

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SECTION 1.1. Definitions.

SECTION 1.2. Certain Rules of Interpretation.

SECTION 2.1. Representations and Findings of Issuer.

SECTION 2.2. Representations by the Company.

SECTION 3.1. Acquisition and Construction.

SECTION 3.2. Construction Fund.

SECTION 3.3. Establishment of Completion Date.

SECTION 4.1. Loan of Bond Proceeds.

SECTION 4.2. Repayment of Loan.

SECTION 4.3. Operation.

SECTION 4.4. Insurance.

SECTION 4.5. Maintenance and Repair.

SECTION 4.6. Right to Discontinue Operation of Project.

SECTION 4.7. Insurance and Condemnation Awards.

SECTION 4.8. Workers' Compensation Coverage.

SECTION 4.9. Taxes, Claims for Labor and Materials, Compliance with Laws.

SECTION 4.10. Issuer's Limited Liability.

SECTION 4.11. Right of Inspection.

SECTION 5.1. Issuance of Bonds.

SECTION 5.2. Security for the Bonds.

SECTION 5.3. Redemption of 2004A Bonds.

SECTION 5.4. Investment of Funds.

SECTION 6.1. Company Approval of Issuance of Bonds.

SECTION 6.2. Refunding of Bonds.

SECTION 6.3. Redemption of Bonds.

SECTION 6.4. Installment Loan Payments.

SECTION 6.5. Administrative Expenses.

SECTION 6.6. Payments to Issuer.

SECTION 6.7. Obligations of the Company Absolute and Unconditional.

SECTION 6.8. Option to Prepay Amounts Under Loan Agreement in Certain Events.

SECTION 6.9. Company's Performance Under Indenture.

SECTION 6.10. Covenants Regarding Tax Exemption.

SECTION 6.11. Bonds Purchased in Lieu of Redemption.

SECTION 6.12. Nondiscrimination – Sexual Harassment.

SECTION 7.1. Indemnified Party's Release and Indemnification Provisions.

SECTION 7.2. Maintenance of Corporate Existence.

SECTION 7.3. Financial Information.

SECTION 7.4. Agreement of Issuer Not to Assign or Pledge.

SECTION 7.5. Reference to Bonds Ineffective after Bonds Paid.

SECTION 7.6. Assignment, Sale or Lease of Project.

SECTION 7.7. Amendment of Loan Agreement or Indenture.

SECTION 7.8. Waiver of Vendor's Lien.

SECTION 7.9. Limitations on Indebtedness.

SECTION 7.10. Limitation on Liens.

SECTION 7.11. Dividends, Stock Purchases.

SECTION 7.12. Termination of Pension Plans.

SECTION 8.1. Defaults and Remedies.

SECTION 8.2. Annulment of Acceleration.

SECTION 8.3. Agreement to Pay Attorneys' Fees and Expenses.

SECTION 8.4. General Enforcement Provisions.

SECTION 8.5. Notice of Default.

SECTION 8.6. Unassigned Issuer's Rights.

SECTION 8.7. Determination of Taxability Not an Event of Default.

SECTION 9.1. Term of Loan Agreement.

SECTION 9.2. Notices.

SECTION 9.3. Benefit of Parties.

SECTION 9.4. Severability.

SECTION 9.5. Counterparts.

SECTION 9.6. Captions.

SECTION 9.7. Law Governing Construction of Loan Agreement.

SECTION 9.8. Payments on Non-Business Days.

SECTION 9.9. Payments to be Sufficient to Meet DTC Requirements.

SECTION 9.10. Reserved.

SECTION 9.11. Limitation of Liability; No Personal Liability.

EXHIBIT A – Project Description

EXHIBIT B – Nondiscrimination/Sexual Harassment Clause

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This Loan Agreement dated as of July 1, 2015, between the York County Industrial Development Authority (the "Issuer"), a public instrumentality of the Commonwealth of Pennsylvania (the "Commonwealth") and a public body corporate and politic organized and existing under the Pennsylvania Economic Development Financing Law, as amended (the "Act") of the Commonwealth, and The York Water Company, a Pennsylvania corporation (the "Company"),

WITNESSETH:

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

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

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

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

WHEREAS, the Issuer will enter into this Loan Agreement with the Company, under the terms of which the Company will agree to repay the loan of the proceeds of the Bonds by paying to the Issuer moneys sufficient to pay the principal of, and premium (if any) and interest on the Bonds as the same become due and payable and to pay certain administrative expenses in connection with the Bonds; and

WHEREAS, as security for the payment of said Bonds, the Issuer will assign and pledge to Manufacturers and Traders Trust Company, as trustee (the "Trustee") under the terms of the Trust Indenture dated as of July 1, 2015 (the "Indenture") certain rights, title and interest of the Issuer in (i) this Loan Agreement (except for the indemnification rights and expense reimbursement rights contained herein), and (ii) all amounts on deposit from time to time in the various funds created in, and subject to the conditions set forth in, the Indenture; 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

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:

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

"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 or the Company in connection with the issuance and sale of the Bonds, including without limitation (i) fees and expenses of accountants, attorneys, engineers, credit enhancers and financial advisors, (ii) 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, (vi) any underwriters' discount or fee and expenses and (vii) the Issuer's issuance fee and administrative and overhead expenses as provided in Section 6.6 of this Loan Agreement.

"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:

"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.

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

"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 the Debt Service on the Bonds, as provided for in Section 6.4(b), (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 Bonds when due.

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

"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.

"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.

"Project" means the facilities described in the recitals hereto and Exhibit A to this Loan Agreement, as amended from time to time as provided herein, and which are being financed or refinanced with the proceeds of the Bonds and an equity contribution from the Company.

Project Costs" means all costs incurred by the Company, whether before or after issuance of the Bonds, with respect to the acquisition, construction and installation of the Project, including but not limited to, the following items:

(i)	Obligations incurred or assumed for labor, materials and equipment (including obligations payable to the Company for expenditures made or costs incurred by the Company);

(ii)	Costs of any performance, payment, or surety bonds and insurance deemed necessary or appropriate by the Company;

(iii)

Costs of engineering and other services, including the costs incurred or assumed for preliminary design and development, surveys, estimates and plans and specifications, and for supervising construction and performing all other duties required by or consequent upon proper construction;

(iv)	Costs which the Company shall be required to pay under the terms of any contract or contracts in connection with the construction, acquisition and installation of the Project;

(v)	Amounts which are required to be paid for taxes, assessments and other similar charges payable during the period of construction;

(vi)	Expenses incurred in seeking to enforce any remedy against any contractor, subcontractor or other provider of labor, materials, equipment or services, in respect of any default, breach or dispute relating to the Project;

(vii)

Sums required to reimburse the Company for advances made for any of the above items, and for any other costs incurred for work done or caused to be done by the Company which are properly chargeable to the Project;

(ix)	To the extent authorized by the Act, costs of all other items related to the acquisition, construction and installation of the Project; and

"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 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).

ARTICLE II  
REPRESENTATIONS

The Issuer hereby confirms its findings and represents that:

The Company makes the following representations as the basis for the undertakings on its part herein contained:

ARTICLE III  
THE PROJECT

The Company (a) has acquired, or has the requisite legal power to acquire, all interests in land required for construction of the Project, and shall construct, install, equip and improve the Project with all reasonable dispatch and in accordance with the description thereof in Exhibit A attached hereto and applicable law, (b) shall procure or cause to be procured all permits and licenses necessary for the prosecution of the work, and (c) shall pay when due all costs and expenses incurred in connection with that acquisition, construction, installation, equipment and improvement from funds made available therefor in accordance with this Loan Agreement or otherwise.  The Company will revise Exhibit A and such supplemental information from time to time as necessary to reflect material additions to, deletions from and changes in the Project and will notify the Issuer and the Trustee in writing of such modifications so that the Issuer and the Trustee will be able to ascertain the nature, location and estimated cost of the Project.  It is understood that the Project is the property of the Company and that any contracts made by the Company with respect thereto and any work to be done on the Project is to be done by the Company in its own behalf and not as agent or contractor for the Issuer or the Trustee.

In the event that Exhibit A hereto is to be amended or supplemented in accordance with the provisions of the Indenture, the Issuer will enter into, and will instruct the Trustee to consent to, an amendment of or supplement to Exhibit A hereto upon receipt by the Issuer and Trustee of:

(i)	a certificate of an Authorized Company Representative describing in detail the proposed changes; and

(ii)	a copy of the proposed form of amendment or supplement to Exhibit A hereto and such other documents, certificates and showings as may be required by counsel rendering the opinion in clause (iii) of this paragraph; and

(iii)

an opinion of Bond Counsel to the effect that such amendment complies with the requirements of this Section 3.1, is in proper form for execution and delivery by the Issuer and will not adversely affect the validity of the Bonds or the exemption from federal income taxes of the interest thereon.

The Company recognizes that since the Project has been or will be acquired, constructed and equipped by the Company and by contractors and suppliers selected by the Company in accordance with the plans and specifications, the Issuer makes no representation or warranty, express or implied, with respect to the merchantability, condition or workmanship of any part of the Project or its suitability for the Company's purposes or the extent to which proceeds derived from the sale of the Bonds will pay the costs to be incurred in connection therewith.

The Construction Fund shall be drawn on and used to pay Project Costs when due and payable.  Moneys in the Construction Fund shall be disbursed to the Company, or such other Person as may be designated, on requisitions substantially in the form of Exhibit C to the Indenture signed by the Authorized Company Representative and delivered to the Trustee, stating with respect to each payment to be made:

(1)	The amount and general purpose of such disbursement; and

(2)	That each obligation mentioned therein (i) has been properly incurred, (ii) is a proper charge against the Construction Fund in accordance with the provisions of this Loan Agreement, the Tax Documents and the Indenture, and (iii) has not been the basis of any previous requisition.

The Trustee shall rely fully on any such requisition delivered pursuant to this Section and shall not be required to make any investigation in connection therewith.

All moneys remaining in the Construction Fund after all Project Costs have been paid or provided for shall at the written direction of the Company be used in accordance with Section 3.3 hereof.

If moneys in the Construction Fund are not sufficient to pay all Project Costs, the Company nonetheless shall complete the Project in accordance with Exhibit A attached hereto (as revised and amended in accordance with this Loan Agreement) and shall pay all such additional Project Costs.  The Company shall not be entitled to any reimbursement for any such additional Project Costs from the Issuer, the Trustee, or any Registered Owner; nor shall it be entitled to any abatement, diminution or postponement of the Installment Loan Payments or other amounts payable hereunder.

As soon as practicable after the completion of construction of the Project, the Company shall furnish to the Trustee a certificate signed by an Authorized Company Representative stating (i) that construction of the Project described in Exhibit A hereto (as revised and amended in accord with this Loan Agreement) has been completed, and (ii) any portion of the Project Costs which has not yet then been paid.  Such certificate may state that it is given without prejudice to any rights against third parties which exist at the date of such certificate or which may subsequently come into being.

Moneys (including investment proceeds) remaining in the Construction Fund on the date of such certificate may be used, at the written direction of an Authorized Company Representative for the payment, in accordance with the provisions of this Loan Agreement, of any Project Costs not then paid as specified in such certificate.  The Company agrees that any moneys (including investment proceeds) remaining in the Construction Fund on the date of the aforesaid certificate and not so set aside for the payment of such Project Costs shall be transferred or disbursed in accordance with Section 1.142-2 of the Regulations, or any successor thereto and that the Company shall give specific instructions to the Trustee as to the transfer or disbursement of such funds and certify that such transfer or disbursement complies with the provisions of Section 1.142-2 of the Regulations or any successor thereto at such time.  The Company acknowledges that these provisions generally require that a portion of the Bonds be redeemed, or defeased to the first call date (with appropriate notice to the Internal Revenue Service), within 90 days of the earlier of (i) the date on which the Company determines that the Project will not be completed or (ii) the date on which the Project is Placed-in-Service (as defined in the Tax Agreement).

ARTICLE IV  
LOAN AND REPAYMENT; OPERATION OF PROJECT

To provide funds for the financing of the Project, the Issuer will issue the 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.  The Company shall pay all Costs of completing the Project to the extent that such Costs exceed the loan proceeds, including interest earnings, available therefor.

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

The Company shall acquire, construct, install, operate and maintain the Project 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 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, including all applicable taxes.  During such period as the Project is operated in accordance with the provisions of this Loan Agreement, the Company will, within the design capabilities thereof, cause the Project 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, or the performance of the Project for its designed purposes.

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 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 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 Project site or facilities shall name the Authority and the Trustee as additional insureds as their interests may appear.

Subject to the provisions of Section 4.6 hereof, the Company agrees that it will (i) maintain, or cause to be maintained, the Project 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 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 and all of its other properties shall be paid by the Company, and the Issuer shall have no obligation or liability in this regard.

Although the Company intends to operate, or cause to be operated, the Project for its designed purposes until the date on which no 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 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.  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 in accordance with this Section 4.6, the Company shall be discharged from its obligations to insure, maintain and repair the Project or to cause the Project to be insured, maintained and repaired as set forth in Sections 4.4 and 4.5 hereof.

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 or any portion thereof shall belong to, and may be used for any lawful purpose by, the Company.

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

It is recognized that the Issuer's only source of funds with which to carry out its commitments under the Bonds or this Loan Agreement will be from the proceeds from the sale of the Bonds, 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 or the Project except to the extent of funds available from such sources.  If, for any reason, the proceeds from the sale of the Bonds are not sufficient to pay all the costs of completing the acquisition, construction and installation of the Project, the Company shall complete the acquisition, construction and installation of the Project, and the Company shall pay such costs from its own funds, but it shall not be entitled to reimbursement therefor, or to any diminution in or postponement of any payments required to be made by the Company hereunder.

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 and the books and records of the Company pertaining to the Project; provided, however, that this right is subject to federal, state and local laws and regulations applicable to the site of the Project.  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 V  
ISSUANCE OF BONDS; SECURITY; INVESTMENTS

In order to provide funds to finance the acquisition, construction and installation of the Project, the Issuer, concurrently with the execution of this Loan Agreement, will sell, issue and deliver to the initial purchasers thereof the Bonds, all in accordance with the Indenture.

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 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 Issuer hereby gives its express written authority to the Company as provided in the Indenture to direct the investment of any Fund held by the Trustee pursuant to the Indenture.

ARTICLE VI  
COMPANY OBLIGATIONS; PROVISIONS FOR PAYMENT; COVENANTS

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 Bonds.  The Company hereby approves the Indenture.  It is hereby agreed that the foregoing approval of the Indenture constitutes the acknowledgment and agreement of the Company that the 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 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 Bonds and the Indenture, become valid and binding covenants and obligations of the Company so long as the 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.

After the issuance of any Bonds, the Issuer shall not refund any of the Bonds or change or modify the 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 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.

The Issuer, upon the written request of the Company (and provided that the affected 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 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 Bonds, as specified in the Indenture.  If a redemption of 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 Bonds due on such redemption date.

The Company shall pay, or cause to be paid, an amount equal to the reasonable and documented fees and charges of the Trustee for services rendered as Trustee under the Indenture and its reasonable and documented expenses incurred as Trustee under the Indenture, including reasonable and documented fees and expenses of its 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 Bonds as provided in Section 8.11 of the Indenture.

The Company shall pay or cause to be paid all of the Issuer's Administrative Expenses, including but not limited to; reasonable, actual out-of-pocket expenses and costs in connection with the issuance of the Bonds, including, without limitation, all financing, legal, printing, and other expenses and all Costs of Issuance incurred in issuing the Bonds (including the fees and expenses of bond counsel and the Issuer's financial advisor) and the Issuer's fee of .75% of the principal amount of the Bonds for issuing the Bonds, less an application fee of $2,000.  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 for its reasonable and necessary expenses and costs attributable to the Bonds and the Project, including, but not limited to, an annual audit/service fee of $350 and any costs reasonably and necessarily incurred by the Issuer in connection with requests related to the Bonds made by the Internal Revenue Service.  Sums payable to the Issuer hereunder, if not paid within forty-five (45) days of demand, shall bear interest at the prime rate.

The obligations of the Company to make the payments required and to perform the covenants contained in Sections 6.4, 6.5, 6.6, 6.10, 7.1 and 8.3 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 payment of all amounts relating to the Bonds has been made, 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 9.1, 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, 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 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.

The Company shall have, and is hereby granted, the option to prepay the amounts required to be paid by the Company under Section 6.4(b) in whole or in part and to direct the Trustee to redeem the 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 Bonds or if any of the events described in Article V of the Indenture requiring the redemption of 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 Bonds or any portion thereof to be redeemed, or to cause the Indenture to be discharged, to the extent permitted by the Indenture.

The Company agrees 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.

It is the intention of the Company and the Issuer that the interest on the 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 or a "related person" within the meaning of Section 147(a) of the Code, and that substantially all of the proceeds of the Bonds will be 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 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 Bonds.

Pursuant to Section 5.6 of the Indenture, the Company is given the right to purchase Bonds in lieu of redemption.  Provided that, prior to the date that any such Bonds are sold by the Company, the Company shall receive a Favorable Opinion of Bond Counsel.

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

ARTICLE VII  
PARTICULAR AGREEMENTS

The Company agrees, whether or not the transactions contemplated by this Loan Agreement and the Indenture shall be consummated:

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 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 negligence of the Indemnified Party.

The Company also agrees to pay the documented expenses (including reasonable attorneys' fees) of any Indemnified Party in enforcing this Section 7.1.  The provisions of this Section shall survive the payment of the Bonds, the termination of this Loan Agreement, the termination of the Indenture, and, as to the Trustee, the removal or resignation of the Trustee.

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, which consent shall not be unreasonably withheld (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, and is duly qualified to do business in the Commonwealth, (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 7.9 hereof, and (e) the provisions of Section 7.6 are satisfied.

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 7.3 and concurred in by the independent public accountants referred to herein), and will furnish to the Trustee and upon request, to the Issuer:

all in reasonable detail and certified as complete and correct, by an authorized financial officer of the Company;

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;

To the extent not furnished pursuant to the foregoing provisions of this Section 7.3, the Company agrees to furnish to the Issuer and Trustee, copies of the annual financial statements and other information filed with MSRB pursuant to the Company's continuing disclosure undertaking.  Such statements and other information shall be filed with the Authority and the Trustee within ten (10) days of the filings made pursuant to such continuing disclosure undertaking.

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.

Upon payment of all Debt Service due relating to the 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 Bonds and the Trustee shall be ineffective and neither the Issuer, the Trustee nor the holders of any of the 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 7.1 and payment of fees under Section 8.3, which rights shall survive the payment of all Debt Service due relating to the Bonds and the termination of this Loan Agreement and the 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 and Article XI of the Indenture.

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, 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.

The Company will not, except as hereinafter provided:

(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 7.11, 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.

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 VIII  
EVENTS OF DEFAULT AND REMEDIES

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 6.4.  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.

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.

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.

Notwithstanding any other provision of this Loan Agreement to the contrary, the occurrence of a Determination of Taxability caused by any failure by the Company to observe or perform any covenant, condition or agreement on its part to be observed or performed hereunder or under the Indenture or the Tax Compliance Agreement, or caused by the failure of any representation or warranty by the Company herein or in the Tax Compliance Documents to be true and correct, shall not, by itself, be deemed an event of default under this Loan Agreement, provided that the Bonds are redeemed on account of such Determination of Taxability as soon as practicable but in no event later than ninety (90) days after the Determination of Taxability.

ARTICLE IX  
MISCELLANEOUS

Subject to all provisions hereof which expressly state that the same shall survive termination hereof, this Loan Agreement shall terminate when payment of all Debt Service relating to the Bonds shall have been made and all fees, indemnities, expenses and charges of the Issuer and the Trustee have been fully paid or provision satisfactory to such parties made for such payment.

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:

The York Water Company

▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇, ▇▇  ▇▇▇▇▇

Attention:  Chief Financial Officer

Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇

York County Industrial Development Authority

▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇

▇▇▇▇, ▇▇  ▇▇▇▇▇

Attention:  ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Assistant Secretary

Telecopy No. ( ▇▇▇) ▇▇▇-▇▇▇▇

Manufacturers and Traders Trust Company

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇▇, ▇▇  ▇▇▇▇▇

Attn:  Corporate Trust Department

Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇

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.

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.

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.

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.

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.

This Loan Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth.

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.

The Company hereby acknowledges that the 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 Bonds are in book-entry form at DTC and so long as the Company is informed of such requirements.  If, in the judgment of the Company, there are any changes in such DTC requirements that will require the Company to make payments and give notices in a manner materially different than otherwise required under this Agreement, then the Issuer and the Trustee agree to cooperate with any request by the Company to utilize another securities depository for the Bonds or terminate the book-entry only system for the Bonds.

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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.

YORK COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY

Chair

[Seal]

Attest:

  (Assistant) Secretary

Authorized Officer

[Seal]

Attest:

  (Assistant) Secretary

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The refinancing of all of the 2004A Bonds; financing a portion of the Company's 2015 Capital Budget, including, but not limited to the design, acquisition, construction, improvement, renovation, equipping and installation of (a) various structures, including booster stations, wellhouses, pumping stations, standpipes and water treatment facilities, (b) transmission and distribution mains, service lines, meters and pumping, water treatment and purification equipment, and (c) various other capital improvements and equipment for the Company's water system located throughout York and ▇▇▇▇▇ Counties, Pennsylvania; and the payment of the costs of issuance of the Bonds.

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During the term of the Loan Agreement, the Company agrees as to itself and each person controlling, controlled by or under common control with the Company (each, a "Contractor") as follows: