TRUST INDENTURE

SECTION 1.1. Definitions. 

SECTION 1.2. Certain Rules of Interpretation. 

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

SECTION 2.2. Terms of the Bonds.

SECTION 2.3. Reserved. 

SECTION 2.4. Reserved.

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

SECTION 2.6. Authentication.

SECTION 2.7. Registration, Transfer and Exchange.

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

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

SECTION 2.10. Temporary Bonds. 

SECTION 2.11. Cancellation of Surrendered Bonds. 

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

SECTION 2.13. Book Entry System.

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

SECTION 3.1. Establishment of Funds and Accounts. 

SECTION 3.2. Debt Service Fund. 

SECTION 3.3. Return of Monies from Non-Presentment of Bonds. 

SECTION 3.4. Construction Fund. 

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

SECTION 3.6. Additional Accounts and Subaccounts.

SECTION 4.1. Investment of Funds.

SECTION 4.2. Arbitrage Bond Covenant. 

SECTION 4.3. Covenants Regarding Tax Exemption.

SECTION 5.1. Bonds Subject to Redemption. 

SECTION 5.2. Selection of Bonds for Redemption. 

SECTION 5.3. Notice of Redemption.

SECTION 5.4. Effect of Redemption. 

SECTION 5.5. Redemption by the Company in the Event of Death of a Beneficial Owner.

SECTION 5.6. Purchase in Lieu of Redemption.

SECTION 6.1. General Limitation; Issuer’s Representation.

SECTION 6.2. Payment of Bonds and Performance of Covenants. 

SECTION 6.3. Enforcement of the Loan Agreement.

SECTION 6.4. No Personal Liability.

SECTION 6.5. Exemption from Federal Income Taxation. 

SECTION 6.6. Corporate Existence; Compliance with Laws.

SECTION 6.7. Filings. 

SECTION 6.8. Further Assurances.

SECTION 6.9. Inspection of Books. 

SECTION 7.1. Events of Default Defined. 

SECTION 7.2. Acceleration and Annulment Thereof.

SECTION 7.3. Legal Proceedings by Trustee.

SECTION 7.4. Discontinuance of Proceedings by Trustee. 

SECTION 7.5. Registered Owners May Direct Proceedings. 

SECTION 7.6. Limitations on Actions by Registered Owners.

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

SECTION 7.8. Remedies Not Exclusive. 

SECTION 7.9. Delays and Omissions Not to Impair Rights.

SECTION 7.10. Application of Monies. 

SECTION 7.11. Trustee’s Right to Receiver. 

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

SECTION 7.13. Waiver of Past Defaults. 

SECTION 8.1. Certain Duties and Responsibilities of Trustee.

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

SECTION 8.3. Certain Rights of Trustee. 

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

SECTION 8.5. May Hold Bonds. 

SECTION 8.6. Money Held in Trust. 

SECTION 8.7. Corporate Trustee Required; Eligibility. 

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

SECTION 8.9. Acceptance of Appointment by Successor Trustee. 

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

SECTION 8.11. Fees, Charges and Expenses of Trustee. 

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 10.1. Defeasance. 

SECTION 10.2. Effect of Defeasance. 

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

SECTION 11.2. No Rights Conferred on Others. 

SECTION 11.3. Illegal, Etc. Provisions Disregarded. 

SECTION 11.4. Substitute Publication of Notice. 

SECTION 11.5. Mailed Notice. 

SECTION 11.6. Governing Law.

SECTION 11.7. Successors and Assigns. 

SECTION 11.8. Action by Company. 

SECTION 11.9. Headings and Subheadings for Convenience Only. 

SECTION 11.10. Counterparts. 

SECTION 11.11. Additional Notices to Rating Agencies. 

Exhibit  A—Form of Bond

Exhibit  B—Letter of Representations to DTC

Exhibit  C—Form of Requisition

Exhibit  D—Form of Redemption Request

This Trust Indenture, dated as of October 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"),

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 Issuer has determined to issue $15,000,000 aggregate principal amount of its Exempt Facilities Revenue Bonds, Series 2008B (The York Water Company Project) (the "Bonds") to provide funds to loan to The York Water Company (the "Company") for the financing of (i) a portion of the Company’s 2008 Capital Budget, including, but not limited to the design, acquisition, construction, improvement, extension, renovation, equipping and installation of (a) various structures, including distribution buildings, booster stations, pumping stations, and various plant and ancillary buildings, (b) spillway upgrades, standpipes, transmission and distribution mains, service lines, meters, fire hydrants, water treatment, pumping and purification equipment, and (c) various other capital improvements, replacements and equipment for the Company’s water system located throughout York County and Adams County, Pennsylvania, and (ii) the payment of all or a portion of the costs of issuance of the Bonds (the "Project"); and

WHEREAS, the Issuer has entered into a Loan Agreement dated as of October 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 Bonds for such purpose and the repayment of such loan by the Company; and

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

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

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

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

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

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

SECTION 1.1.   Definitions .

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

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

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

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

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

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

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

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

"Beneficial Owners" means the owners of beneficial interests in the Bonds while 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 September 10, 2008, authorizing the issuance of the Bonds.

"Bonds" means the Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Bonds, Series 2008B (The York Water Company Project) authorized hereunder.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"Indenture" means this Trust Indenture dated as of October 1, 2008, as hereafter amended and supplemented by any Supplemental Indenture.

"Interest Payment Date" means, with respect to the Bonds, May 1 and November 1 of each year, commencing May 1, 2009.

"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 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 the Bonds are first authenticated and delivered to the initial purchasers against payment therefor.

"Loan Agreement" means the Loan Agreement dated as of October 1, 2008 between the Issuer and the Company, as hereafter amended and supplemented by any Supplemental Loan Agreement.

"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 and the Issuer.

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

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

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

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

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

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

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

"Rating Agency" means Moody’s or S&P.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"Underwriting Agreement" means, with respect to the Bonds, the Bond Purchase Agreement dated October __, 2008 among the Issuer, the Company and Edward D. Jones and Co., LP, as underwriter, providing for the purchase and sale of the Bonds.

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

SECTION 1.2.   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 or the Trustee is named or referred to, it shall include, and shall be deemed to include, its respective successors and assigns whether so expressed or not.  All of the covenants, stipulations, obligations and agreements by or on behalf of, and other provisions for the benefit of, the Issuer, the Company and the Trustee contained in this Indenture shall inure to the benefit of such respective successors and assigns, bind and shall, inure to the benefit of any officer, board, commission, authority, agency or instrumentality to whom or to which there shall be transferred by or in accordance with law any right, power or duty of the Issuer or of its successors or assigns, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions of this Indenture.

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

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

Upon the execution and delivery of this Indenture, the Issuer shall execute the Bonds and deliver them to the Trustee for authentication.  At the written direction of the Issuer, the Trustee shall authenticate the Bonds, and deliver them to the purchasers thereof upon receipt by the Trustee of the amount due the Issuer for the initial delivery of the Bonds pursuant to the terms of the Underwriting Agreement by wire transfer of immediately available funds.  The proceeds of the Bonds shall be deposited by the Trustee in a settlement account and disbursed or transferred as follows:  (a) transfer to the Debt Service Fund, established pursuant to Section 3.1 hereof, a sum equal to the accrued interest, if any, paid by the initial purchasers of the Bonds; (b) disburse amounts set forth in a Closing Statement executed by the Issuer and the Company to pay Costs of Issuance of the Bonds; and (c) transfer to the Construction Fund, established pursuant to Section 3.1 hereof, the balance of the proceeds received from the initial purchasers of the Bonds.  The total principal amount of the Bonds that may be issued hereunder is hereby expressly limited to $15,000,000, except as provided in Section 2.8 hereof.

SECTION 2.2.   Terms of the Bonds .

The Bonds shall be designated "Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue Bonds, Series 2008B (The York Water Company Project)" and shall be issuable only as fully registered Bonds without coupons in Authorized Denominations.  Unless the Issuer shall otherwise direct, the Bonds shall be numbered separately from 1 upward.  The Bonds shall be dated as of the Dated Date and shall mature, subject to prior redemption upon the terms and conditions hereinafter set forth, on November 1, 2038.  The Bonds shall bear interest at the rate of 6.00% per annum, from and including the date thereof until payment of the principal or redemption price thereof shall have been made or provided for in accordance with the provisions hereof, whether at maturity, upon redemption or otherwise.  Each Bond shall bear interest on overdue principal and premium, if any, and, to the extent permitted by law, on overdue interest at the rate of interest borne by the Bonds.

Optional Redemption . The Bonds shall be subject to redemption by the Issuer, at the direction of the Company, on or after November 1, 2013, in whole or in part at any time, in Authorized Denominations, at a redemption price of 100% of the principal amount redeemed plus accrued interest, if any, to the redemption date.

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

Redemption by the Company in the Event of Death of a Beneficial Owner .  The Bonds are subject to Redemption by the Company in the Event of Death of a Beneficial Owner as set forth in Section 5.5 hereof.

SECTION 2.3.   Reserved .

SECTION 2.4.   Reserved .

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

(a)   The Bonds shall be substantially in the form of Exhibit A attached to this Indenture and made a part hereof, with appropriate insertions, deletions and modifications to reflect the terms of the Bonds. The Bonds shall be executed on behalf of the Issuer with the manual or facsimile signature of its 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 Bonds shall cease to be such official before the delivery of such Bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes, the same as if such official had remained in office until delivery.

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

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

SECTION 2.6.   Authentication .

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

SECTION 2.7.   Registration, Transfer and Exchange .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 2.10.   Temporary Bonds .

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

SECTION 2.11.   Cancellation of Surrendered Bonds .

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

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

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

SECTION 2.13.   Book Entry System .

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

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

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

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

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

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

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

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

The 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.

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

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

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

SECTION 3.1.   Establishment of Funds and Accounts .

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

SECTION 3.2.   Debt Service Fund .

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

SECTION 3.3.   Return of Monies from Non-Presentment of Bonds .

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

SECTION 3.4.   Construction Fund .

The net proceeds of the sale of the Bonds, after deposit of any accrued interest thereon in the Debt Service Fund and payment of Costs of Issuance pursuant to Section 2.1 hereof, shall be deposited by the Trustee in the Construction Fund and shall be used to pay Project Costs as provided in Section 3.2 of the Loan Agreement.  The Trustee shall disburse monies from the Construction Fund upon receipt of requisitions signed by the Company substantially in the form attached to this Indenture as Exhibit C.  Any amounts remaining after delivery of the certificate of completion pursuant to Section 3.3 of the Loan Agreement shall be used by the Trustee as provided in Section 3.3 of the Loan Agreement.

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

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

SECTION 3.6.   Additional Accounts and Subaccounts .

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

SECTION 4.1.   Investment of Funds .

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

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

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

Notwithstanding the foregoing, the Company will not direct the Trustee to make investments under this Indenture that conflict with or exceed the limitations set forth in the Tax Documents.  The Trustee shall have no responsibility with respect to the compliance by the Company or the Issuer with respect to any covenant herein regarding investments made in accordance with this Article, 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 Bonds, or any other funds which may be deemed to be proceeds of the Bonds pursuant to Section 148 of the Code, which would cause the Bonds to be "arbitrage bonds" within the meaning of such Section.

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

SECTION 4.3.   Covenants Regarding Tax Exemption .

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

SECTION 5.1.      Bonds Subject to Redemption .

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

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

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

SECTION 5.2.   Selection of Bonds for Redemption .

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

SECTION 5.3.   Notice of Redemption .

The Company must deliver written notice by facsimile or first class mail to the Issuer and the Trustee of its intention to prepay the amounts due under the Loan Agreement and its request that the Bonds be called for redemption at least forty-five (45) days prior to the proposed redemption date (or such lesser period as is acceptable to the Trustee).  Unless previously delivered to the Trustee and the Issuer, any such notice from the Company relating to Special Mandatory Redemption shall be accompanied by a certificate as to the occurrence of the event or events on which any Special Mandatory Redemption is based.  The Trustee shall cause notice of any redemption of Bonds hereunder to be given to the Registered Owners of all Bonds to be redeemed at the registered addresses appearing in the registration books kept for such purpose pursuant to Article II hereof.  Each such notice shall (i) be given by facsimile or by first class mail at least thirty (30) days prior to the redemption date, (ii) identify the Bonds to be redeemed (specifying the CUSIP numbers, if any, assigned to the Bonds), (iii) specify the redemption date and the redemption price, and (iv) state that on the redemption date the Bonds called for redemption will be payable at the designated corporate trust operations office of the Trustee, that from that date interest will cease to accrue, and that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Bonds.  No defect affecting any Bond, whether in the notice of redemption or mailing thereof (including any failure to mail such notice), shall affect the validity of the redemption proceedings for any other Bonds.  The Trustee shall also send a notice of prepayment or redemption by first class mail to the Registered Owner of any Bond who has not sent such Bond in for redemption sixty (60) days after the redemption date.

In addition, the Trustee shall give notice of redemption of Bonds by facsimile or by mail, first class postage prepaid, at least thirty (30) days prior to a redemption date to each registered Securities Depository and to any national information service that disseminates redemption notices.  Any notice sent to registered securities depositories or such national information services shall be sent so that they are received at least two (2) days prior to the general mailing or publication date of such notice.  The Trustee may give such other notice or notices as may be recommended in releases, letters, pronouncements or other writings of the Securities and Exchange Commission and the Municipal Securities Rulemaking Board.  No defect in or delay or failure in giving any recommended notice described in this paragraph shall in any manner affect the notice of redemption described in the preceding paragraph of this Section 5.3 and any notice mailed as provided in the preceding paragraph of this Section 5.3 shall be conclusively presumed to have been duly given, whether or not the Registered Owner receives the notice.

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