Exhibit 10.11 I
EIGHTH AMENDMENT TO
CREDIT AGREEMENT
THIS EIGHTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated for
reference purposes only as of March 14, 2003, is entered into between BANK OF
AMERICA, N.A., a national association ("Bank"), and SOUTHWEST WATER COMPANY, a
Delaware corporation ("Borrower").
RECITALS
A. Borrower and Bank have previously entered into that certain Credit
Agreement dated as of July 30, 1999, as amended by that certain First Amendment
to Credit Agreement dated as of June 30, 2000, that certain Second Amendment to
Credit Agreement dated as of September 29, 2000, that certain Third Amendment to
Credit Agreement dated as of March 9, 2001, that certain Fourth Amendment to
Credit Agreement dated as of July 13, 2001, that certain Fifth Amendment to
Credit Agreement dated as of October 22, 2001, that certain Sixth Amendment to
Credit Agreement dated as of November 9, 2001, and that certain Seventh
Amendment to Credit Agreement dated as of November 1, 2002, (collectively, the
"Credit Agreement"), pursuant to which Bank has made certain loans and financial
accommodations available to Borrower. Terms used herein without definition shall
have the meanings ascribed to them in the Credit Agreement.
B. Bank and Borrower wish to amend the Credit Agreement under the terms and
conditions set forth in this Amendment. Borrower is entering into this Amendment
with the understanding and agreement that, except as specifically provided
herein, none of Bank's rights or remedies as set forth in the Credit Agreement
is being waived or modified by the terms of this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Amendments to Credit Agreement.
(a) The definition of "Revolving Commitment" set forth in Section 1.01
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows:
"`Revolving Commitment': The amount of $10,000,000 from the date
hereof to December 31, 2003, and $6,000,000 thereafter as such
amount may be reduced pursuant to Section 2.01 (c)."
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(b) Section 6.02 (a) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"(a) Leverage Ratio. Permit the ratio of the amount of Consolidated
Liabilities less the outstanding principal amount of the Debentures
to Consolidated Tangible Net Worth to be more than 2.10:1.00 between
the date hereof and December 31, 2003, and 2.00:1.00 thereafter."
(c) Section 6.02 (f) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
"Debt. Create, incur, assume or permit to exist, or permit any
Subsidiary to create, incur, assume or permit to exist, any
indebtedness or liabilities resulting from borrowings, loans or
advances, whether matured or unmatured, liquidated or unliquidated,
joint or several, secured or unsecured, except for (i) Debt incurred
pursuant to the Agreement and the other Loan Documents, (ii) Debt
incurred pursuant to the Suburban Loan Documents; (iii) Debts,
revolving lines of credit and lease obligations of Borrower existing
as of, and disclosed to Bank prior to, the date of the Agreement
(including $6,000,000 of unsecured debt of the Borrower to Mellon,
$4,000,000 of unsecured debt of Suburban to Mellon, and $4,000,000
of unsecured debt of NMUI to First Security Bank (or successors),
(iv) secured indebtedness for purchase money financing of equipment
which is permitted under Section 6.02 (e)(iii) not to exceed an
aggregate of $500,000, (v) unsecured funded bank debt not to exceed
aggregate of $28,000,000 between the date hereof and December 31,
2003, and $24,000,000 thereafter (including, without limitation,
unsecured funded bank debt incurred pursuant to the Loan Documents
and the Suburban Loan Documents and unsecured funded bank debt to
Mellon as described in clause (iii) above), (vi) Debt incurred
pursuant to the Debentures not to exceed $20,000,000, (vii) secured
term Debt incurred by Windermere Utility Company not to exceed
$10,000,000 and Borrower's guaranty of such Debt, (viii) obligations
owing to Bank by Borrower in respect of a standby letter of credit
issued for the benefit of Capistrano Valley Water District, and (ix)
intercompany Debt between Borrower and its majority-owned
Subsidiaries."
2. Effectiveness of this Amendment. Bank must have received the following
items, in form and content acceptable to Bank, before this Amendment is
effective and before Bank is required to extend any credit to Borrower as
provided for by this Amendment.
(a) Amendment. This Amendment fully executed in a sufficient number of
counterparts for distribution to Bank and Borrower.
(b) Amendment Fee. Receipt by Bank of the amendment fee set forth in
Paragraph 3 below.
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(c) Note. The Fifth Amended and Restated Revolving Note, the form of
which is attached hereto as Exhibit A, fully executed by the Borrower.
(d) Authorizations. Evidence that the execution, delivery and
performance by Borrower and each guarantor or subordinating creditor of this
Amendment and any instrument or agreement required under this Amendment have
been duly authorized.
(e) Representations and Warranties. The representations and warranties
set forth in the Credit Agreement must be true and correct.
(f) Other Required Documentation. All other documents and legal matters
in connection with the transactions contemplated by this Amendment shall have
been delivered or executed or recorded and shall be in form and substance
satisfactory to Bank.
3. Amendment Fee. Borrower shall pay to Bank an amendment fee in the amount
of _________ for the processing and approval of this Amendment, which fee will
be fully earned on the date of this Amendment.
4. Representations and Warranties. The Borrower represents and warrants as
follows:
(a) Authority. The Borrower has the requisite corporate power and
authority to execute and deliver this Amendment and to perform its obligations
hereunder and under the Loan Documents (as amended or modified hereby) to which
it is a party. The execution, delivery and performance by the Borrower of this
Amendment and the performance by Borrower of each Loan Document (as amended or
modified hereby) to which it is a party have been duly approved by all necessary
corporate action of Borrower and no other corporate proceedings on the part of
Borrower are necessary to consummate such transactions.
(b) Enforceability. This Amendment has been duly executed and delivered
by the Borrower. This Amendment and each Loan Document (as amended or modified
hereby) is the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, and is in full force and effect.
(c) Representations and Warranties. The representations and warranties
contained in each Loan Document (other than any such representations or
warranties that, by their terms, are specifically made as of a date other than
the date hereof) are correct on and as of the date hereof as though made on and
as of the date hereof.
(d) No Default. No event has occurred and is continuing that constitutes
an Event of Default.
5. Choice of Law. The validity of this Amendment, its construction,
interpretation and enforcement, the rights of the parties hereunder, shall be
determined under, governed by, and construed in accordance with the internal
laws of the State of California governing contracts only to be performed in that
State.
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6. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed and delivered, shall be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Amendment by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment.
7. Due Execution. The execution, delivery and performance of this
Amendment are within the power of Borrower, have been duly authorized by all
necessary corporate action, have received all necessary governmental approvals,
if any, and do not contravene any law or any contractual restrictions binding on
Borrower.
8. Reference to and Effect on the Loan Documents.
(a) Upon and after the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words of
like import referring to the Credit Agreement, and each reference in the other
Loan Documents to "the Credit Agreement", "thereof" or words of like import
referring to the Credit Agreement, shall mean and be a reference to the Credit
Agreement as modified and amended hereby.
(b) Except as specifically amended above, the Credit Agreement and all
other Loan Documents, are and shall continue to be in full force and effect and
are hereby in all respects ratified and confirmed and shall constitute the
legal, valid, binding and enforceable obligations of Borrower to Bank.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of Bank under any of the Loan Documents, nor constitute a waiver
of any provision of any of the Loan Documents.
(d) To the extent that any terms and conditions in any of the Loan
Documents shall contradict or be in conflict with any terms or conditions of the
Credit Agreement, after giving effect to this Amendment, such terms and
conditions are hereby deemed modified or amended accordingly to reflect the
terms and conditions of the Credit Agreement as modified or amended hereby.
9. Ratification. Borrower hereby restates, ratifies and reaffirms each and
every term and condition set forth in the Credit Agreement, as amended hereby,
and the Loan Documents effective as of the date hereof.
10. Estoppel. To induce Bank to enter into this Amendment and to continue
to make advances to Borrower under the Credit Agreement, Borrower hereby
acknowledges and agrees that, after giving effect to this Amendment, as of the
date hereof, there exists no Event of Default and no right of offset, defense,
counterclaim or objection in favor of Borrower as against Bank with respect to
the Obligations.
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(SIGNATURES ON NEXT PAGE)
IN WITNESS WHEREOF, the parties have entered into this Amendment as of the
date first above written.
"Bank" "Borrower"
BANK OF AMERICA, N.A. SOUTHWEST WATER COMPANY,
a national association a Delaware corporation
By: /s/ XXXXX XXXXXX By: /s/ XXXXXX X. XXXXXXX
--------------------- --------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Vice President Title: Vice President - Finance
By: /s/ XXXXX X. XXXXXXX
-------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
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FIFTH AMENDED AND RESTATED REVOLVING NOTE
$10,000,000 Costa Mesa, California
March 14, 2003
FOR VALUE RECEIVED, the undersigned SOUTHWEST WATER COMPANY, a Delaware
corporation ("Borrower") promises to pay to the order of BANK OF AMERICA, N.A.
("Bank") at its office at 000 Xxxxx Xxxx., Xxxxx Xxxx, Xxxxxxxxxx, or at such
other place as the holder hereof may designate, in lawful money of the United
States of America and in immediately available funds, the principal sum of Ten
Million Dollars ($10,000,000), or so much thereof as may be advanced and be
outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement (computed on the basis of a 360-day year and actual days
elapsed, which results in more interest than if a 365-day year were used) at a
rate per annum equal to the applicable IBOR Rate plus the Applicable Margin or
Prime Rate plus the Applicable Margin. When interest is determined in relation
to the Prime Rate, each change in the rate of interest hereunder shall become
effective on the opening of business on the day specified in the public
announcement of a change in Bank's Prime Rate. With respect to each IBOR option
selected hereunder, Bank is hereby authorized to note the date, principal
amount, interest rate and applicable IBOR Rate Term thereto and any payments
made thereon on Bank's books and records (either manually or by electronic
entry) and/or on any schedule attached to this Note, which notations shall be
prima facie evidence of the accuracy of the information noted. This Note amends,
restates in its entirety, and replaces that certain Fourth Amended and Restated
Revolving Note dated as of September 30, 2001 in the original amount of Six
Million Dollars ($6,000,000), made by Borrower payable to the order of Bank,
pursuant to that certain Credit Agreement (as defined in Section D below).
A. DEFINITIONS:
As used herein, the following terms shall have the meanings set forth after
each:
1. "Applicable Margin" means the following amounts per annum, based upon
the Leverage Ratio as set forth in the certificate received pursuant
to Section 6.01 (a) (iv) of the Credit Agreement ("Compliance
Certificate"):
--------------------------------------------------------------------------------------
(in basis points per (in basis points per
annum) annum)
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Pricing Leverage Ratio Applicable Margin for Applicable Margin for
Level IBOR Rate loans Prime Rate loans
--------------------------------------------------------------------------------------
1 *1.50x 125.0 bps (25) bps
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2 ****1.50x but *1.75x 150.0 bps 00 bps
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3 ****1.75x 200.0 bps 25 bps
--------------------------------------------------------------------------------------
During the period from the date of this Note to the date on which the
Bank receives the first Compliance Certificate after the date of this
Note, the Applicable Margin shall be based on a pricing level 1 set
forth in the above table. Thereafter, the Applicable Margin shall be
in effect from the date the most recent Compliance Certificate is
received by the Bank, provided however, that if the
* Less than
**** Greater than or equal to
Exhibit A
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Borrower fails to timely deliver the next certificate, the Applicable
Margin from the date such Compliance Certificate was due shall be that
indicated for the pricing level 3 set forth in the above table, and
thereafter, the pricing level indicated by such Compliance Certificate
when received.
2. "Business Day" means any day except a Saturday, Sunday or any other
day designated as a holiday under Federal or California statute or
regulation, or for amounts bearing interest at an offshore rate, a
Business Day is any day except a Saturday, Sunday or any other day
designated as a holiday under Federal or California statute or
regulation on which Bank is open for business in California and
dealing in offshore dollars.
3. "IBOR Rate Portion" means a portion of the principal amount
outstanding under this Note which is bearing interest at a rate
related to IBOR. No IBOR Rate Portion shall be less than Two Hundred
Fifty Thousand Dollars ($250,000).
4. "IBOR Rate Term" means a period commencing on a Business Day and
continuing for no shorter than one (1) month and no longer than six
(6) months, as designated by Borrower, during which all or a portion
of the outstanding principal balance of this Note bears interest
determined in relation to Bank's IBOR; provided however, that no IBOR
Rate Term shall extend beyond the scheduled maturity date hereof. The
last day of the interest period will be determined by Bank using the
offshore dollar inter-bank market. If any IBOR Rate Term would end on
a day which is not a Business Day, then such IBOR Rate Term shall be
extended to the next succeeding Business Day.
5. "IBOR Rate" means the interest rate determined by the following
formula, rounded upward, if necessary, to the nearest 1/100 of one
percent. (All amounts in the calculation will be determined by Bank as
of the first day of the interest period.)
IBOR Rate = IBOR Base Rate
-----------------------------------------------------
(1.00 - Reserve Percentage)
(a) "IBOR Base Rate" means the interest rate at which Bank's Grand
Cayman Branch, Grand Cayman, British West Indies, would offer U.S.
dollar deposits for the applicable interest period to other major
banks in the offshore dollar inter-bank market.
(b) "Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained by member
banks of the Federal Reserve System for Eurocurrency Liabilities, as
defined in Federal Reserve Board Regulation D, rounded upward to the
nearest 1/100 of one percent. The percentage will be expressed as a
decimal, and will include, but not be limited to, marginal, emergency,
supplemental, special, and other reserve percentages.
6. "Prime Rate" means the rate of interest publicly announced from time
to time by Bank in San Francisco, California, as its Prime Rate. The
Prime Rate is set by Bank based on various factors, including Bank's
costs and desired return,
Exhibit A
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general economic conditions and other factors, and is used as a
reference point for pricing some loans. Bank may price loans to its
customers at, above or below the Prime Rate.
B. INTEREST:
1. Payment of Interest. Interest accrued on this Note shall be payable on the
first day of each month, commencing April 1, 2003.
2. Selection of Interest Rate Options. At any time any portion of this Note
bears interest determined in relation to Bank's IBOR, it may be continued
by Borrower at the end of the IBOR Rate Term applicable thereto so that all
or a portion thereof bears interest determined in relation to the Prime
Rate or in relation to Bank's IBOR for a new IBOR Rate Term designated by
Borrower. At any time any portion of this Note bears interest determined in
relation to the Prime Rate, Borrower may convert all or a portion thereof
so that it bears interest determined in relation to Bank's IBOR for an IBOR
Rate Term designated by Borrower. At the time each advance is requested
hereunder or Borrower wishes to select the IBOR option for all or a portion
of the outstanding principal balance hereof, and at the end of each IBOR
Rate Term, Borrower shall give Bank notice specifying (a) the interest rate
option selected by Borrower, (b) the principal amount subject thereto, and
(c) if the IBOR option is selected, the length of the applicable IBOR Rate
Term. Any such notice may be given by telephone so long as, with respect to
each IBOR selection, such notice is given to Bank prior to 10:00 a.m.,
California time, on the first day of the IBOR Rate Term. For each IBOR
option requested hereunder, Bank will quote the applicable IBOR Rate to
Borrower at approximately 10:00 a.m., California time, on the first day of
the IBOR Rate Term. If Borrower does not immediately accept the rate quoted
by Bank, any subsequent acceptance by Borrower shall be subject to a
re-determination by Bank of the applicable IBOR Rate; provided however,
that if Borrower fails to accept any such rate by 11:00 a.m., California
time, on the Business Day such quotation is given, then the quoted rate
shall expire and Bank shall have no obligation to permit a IBOR option to
be selected on such day. If no specific designation of interest is made at
the time any advance is requested hereunder or at the end of any IBOR Rate
Term, Borrower shall be deemed to have made a Prime Rate interest selection
for such advance or the principal amount to which such IBOR Rate Term
applied.
3. Additional IBOR Provisions.
(a) If Bank at any time shall determine that for any reason adequate
and reasonable means do not exist for ascertaining Bank's IBOR, then
Bank shall promptly give notice thereof to Borrower. If such notice is
given and until such notice has been withdrawn by Bank, than (i) no
new IBOR option may be selected by Borrower, and (ii) any portion of
the outstanding principal balance hereof which bears interest
determined in relation to Bank's IBOR, subsequent to the end of the
IBOR Rate Term applicable thereto, shall bear interest determined in
relation to the Prime Rate.
(b) If any law, treaty, rule, regulation or determination of a court
or governmental authority or any change therein or in the
interpretation or application thereof (each, a "Change in Law") shall
make it unlawful for Bank (i)
Exhibit A
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to make IBOR options available hereunder, or (ii) to maintain interest
rates based on Bank's IBOR, then in the former event, any obligation
of Bank to make available such unlawful IBOR options shall immediately
be cancelled, and in the latter event, any such unlawful IBOR-based
interest rates then outstanding shall be converted, at Bank's option,
so that interest on the portion of the outstanding principal balance
subject thereto is determined in relation to the Prime Rate; provided
however, that if any such Change in Law shall permit any IBOR-based
interest rates to remain in effect until the expiration of the IBOR
Rate Term applicable thereto, then such permitted IBOR-based interest
rates shall continue in effect until the expiration of such IBOR Rate
Term. Upon the occurrence of any of the foregoing events, Borrower
shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any fines, fees, charges, penalties
or other costs incurred or payable by Bank as a result thereof and
which are attributable to any IBOR options made available to Borrower
hereunder, and any reasonable allocation made by Bank among its
operations shall be conclusive and binding upon Borrower.
(c) If any Change in Law or compliance by Bank with any request or
directive (whether or not having the force of law) from any central
bank or other governmental authority shall:
(i) subject Bank to any tax, duty or other charge with respect
to any IBOR options, or change the basis of taxation of
payments to Bank of principal, interest, fees or any other
amount payable hereunder (except for changes in the rate of
tax on the overall net income of Bank); or
(ii) impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the
account of advances or loans by, or any other acquisition of
funds by any office of Bank; or
(iii) impose on Bank any other condition;
and the result of any of the foregoing is to increase the cost to Bank
of making, renewing or maintaining any IBOR options hereunder and/or
to reduce any amount receivable by Bank in connection therewith, then
in any such case, Borrower shall pay to Bank immediately upon demand
such amounts as may be necessary to compensate Bank for any additional
costs incurred by Bank and/or reductions in amounts received by Bank
which are attributable to such IBOR options. In determining which
costs incurred by Bank and/or reductions in amounts received by Bank
are attributable to any IBOR options made available to Borrower
hereunder, any reasonable allocation made by Bank among its operations
shall be conclusive and binding upon Borrower.
4. Default Interest. During the continuance of an Event of Default, the
outstanding principal balance of this Note shall bear interest until paid
in full at an increased rate per annum (computed on the basis of a 360-day
year and actual days elapsed, which
Exhibit A
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results in more interest than if a 365-day year were used) equal to two
percent (2%) above the rate of interest from time to time applicable to
this Note.
C. BORROWING AND REPAYMENT:
1. Borrowing and Repayment. Borrower may from time to time during the term
of this Note borrow, partially or wholly repay its outstanding borrowings, and
re-borrow, subject to all of the limitations, terms and conditions of this Note
and of any document executed in connection with or governing this Note; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon by or for
Borrower, which balance may be endorsed hereon from time to time by the holder.
The outstanding principal balance of this Note shall be due and payable in full
on the "Maturity Date" (as defined in the Credit Agreement).
2. Advances. Advances hereunder, to the total amount of the principal sum
stated above, may be made by the holder at the oral or written request of (a)
Xxxxxx X. Xxxxxxx, Xxxx Xxxxxx, Xxxxxx-Xxxx Xxxxx, any one acting alone, who are
authorized to request advances and direct the disposition of any advances until
written notice of the revocation of such authority is received by the holder at
the office designated above, or (b) any person, with respect to advances
deposited to the credit of any account of Borrower with the holder, which
advances, when so deposited, shall be conclusively presumed to have been made to
or for the benefit of Borrower regardless of the fact that persons other than
those authorized to request advances may have authority to draw against such
account. The holder shall have no obligation to determine whether any person
requesting an advance is or has been authorized by Borrower.
3. Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. Unless instructed otherwise by Borrower, all payments
credited to principal shall be applied first, to the outstanding principal
balance of this Note which bears interest determined in relation to the Prime
Rate, if any, and second, to the outstanding principal balance of this Note
which bears interest determined in relation to Bank's IBOR, with such payments
applied to the oldest IBOR Rate Term first.
4. Prepayment.
(a) Prime Rate. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to the Prime Rate at any time,
in any amount and without penalty.
(b) IBOR. Each prepayment of an IBOR Rate Portion, whether voluntary, by
reason of acceleration or otherwise, will be accompanied by the amount of
accrued interest on the amount prepaid, and a prepayment fee as described
below. A "prepayment" is a payment of an amount on a date earlier than the
scheduled payment date for such amount as required by this Agreement. The
prepayment fee shall be equal to the amount (if any) by which:
Exhibit A
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(i) the additional interest which would have been payable during
the interest period on the amount prepaid had it not been prepaid,
exceeds
(ii) the interest which would have been recoverable by Bank by
placing the amount prepaid on deposit in the domestic certificate of
deposit market, the eurodollar deposit market, or other appropriate
money market selected by Bank for a period starting on the date on
which it was prepaid and ending on the last day of the interest period
for such Portion (or the scheduled payment date for the amount
prepaid, if earlier).
Bank will have no obligation to accept an election of an IBOR Rate
Portion if any of the following described events has occurred and is
continuing:
(i) Dollar deposits in the principal amount, and for periods
equal to the IBOR Rate Term, of an IBOR Rate Portion are not available
in the offshore dollar inter-bank market; or
(ii) the IBOR Rate does not accurately reflect the cost of an
IBOR Rate Portion.
Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Borrower, therefore, agrees to pay the above-described prepayment
fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay
any prepayment fee when due, the amount of such prepayment fee shall thereafter
bear interest until paid at a rate per annum two percent (2%) above the Prime
Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed).
D. EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and conditions of
that certain Credit Agreement between Borrower and Bank dated as of July 30,
1999, as amended from time to time, including, without limitation, those terms
relating to arbitration of Disputes (the "Credit Agreement"). Any default in the
payment or performance of any obligation under this Note, or any defined event
of default under the Credit Agreement, shall constitute an "Event of Default"
under this Note.
E. MISCELLANEOUS:
1. Remedies. Upon the occurrence of any Event of Default, the holder of
this Note, at the holder's option, without notice upon the occurrence of an
Event of Default pursuant to Section 7.01(g) of the Credit Agreement, and with
notice upon the occurrence of any other Event of Default, may declare all sums
of principal and interest outstanding hereunder to be immediately due and
payable without presentment, demand, protest or notice of dishonor, all of which
are expressly waived by Borrower, and the obligation, if any, of the holder to
extend any further credit hereunder shall immediately cease and terminate.
Borrower shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys'
fees (to include outside counsel fees and all allocated costs of the holder's
in-house counsel), incurred by the holder in connection with the
Exhibit A
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enforcement of the holder's rights and/or the collection of any amounts
which become due to the holder under this Note, and the prosecution or defense
of any action in any way related to this Note, including without limitation, any
action for declaratory relief, and including any of the foregoing incurred in
connection with any bankruptcy proceeding relating to Borrower.
2. Obligations Joint and Several. Should more than one person or entity
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.
3. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of California, except to the extent Bank
has greater rights or remedies under Federal law, whether as a national bank or
otherwise, in which case such choice of California law shall not be deemed to
deprive Bank of any such rights and remedies as may be available under Federal
law.
4. Defined Terms. All capitalized terms not herein defined shall have
the meanings given to them in the Credit Agreement.
"Borrower"
SOUTHWEST WATER COMPANY,
a Delaware corporation
By:__________________________
Title: ____________________
By:__________________________
Title:_______________________
Exhibit A
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