Exhibit 10.17.1
AMENDMENT NO. 1
TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO AMENDED AND
RESTATED CREDIT AGREEMENT (this “Amendment”) is entered
into as of November 19, 2008, between Southwest Water Company, a
Delaware corporation (“Borrower”) and Bank of America,
N.A., as Administrative Agent with reference to the Amended and
Restated Credit Agreement dated as of February 15, 2008 (the
“Credit Agreement”), among Borrower, the Lenders
described therein, and the Administrative Agent. Capitalized terms
not otherwise defined herein are used with the meanings set forth
for those terms in the Credit Agreement.
The parties hereto hereby agree with
reference to the following facts:
A.
Borrower has publicly announced that
it will delay filing its Form 10-Q and the related financial
statements for the fiscal quarter ended September 30, 2008, and
that it is reviewing prior period financial statements based upon
its discovery that certain accounting practices are not
appropriate.
B.
Borrower’s audit committee has
concluded that the consolidated financial statements for the years
ended December 31, 2005, 2006 and 2007 and for each of the fiscal
quarters therein, as well as for the quarters ended March 31, 2008
and June 30, 2008 (the “Subject Financial Statements”),
should no longer be relied upon and will be restated.
C.
Borrower has also announced that the
accounting practices which give rise to the requirement of
restatement of the Subject Financial Statements and the delay in
the filing of its Form 10-Q for the fiscal quarter ended September
30, 2008 (the “Subject Accounting Practices”) relate
to: 1) establishment of the rate of depreciation of assets
acquired; and 2) accounting for revenues and related costs
associated with the installation of water and sewer
taps.
D.
As a result of the foregoing,
Borrower is in default of its obligations under the Credit
Agreement (collectively, the “Existing Defaults”) (i)
pursuant to Sections 8.01(c) of the Credit Agreement, as a result
Borrower’s failure to deliver financial statements prepared
in accordance with GAAP as required by Section 6.01(a) and Section
6.01(b) of the Credit Agreement for each of the fiscal quarters and
fiscal years occurring since the Closing Date, and (ii) pursuant to
Section 8.01(d) of the Credit Agreement (in each case, solely by
virtue of Borrower’s representations that the Subject
Financial Statements were prepared in accordance with GAAP as of
the date of their delivery, which have now proven to be inaccurate
as a result of the application of the Subject Accounting
Practices).
NOW, THEREFORE, Borrower and
Administrative Agent, acting with the consent of the Required
Lenders pursuant to Section 10.01 of the Credit Agreement, agree as
follows:
1.
Representations and
Warranties . Borrower
represents and warrants to Administrative Agent and the Lenders
that:
(a)
Borrower has delivered to the
Administrative Agent and the Lenders preliminary financial
statements for the fiscal quarter ended September 30, 2008 which,
to the best knowledge of Borrower as of November 10, 2008, fairly
represent the consolidated financial condition of Borrower as of
that date and for the period then ended, in all material respects,
in accordance with GAAP.
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