Exhibit 10.54

SECOND AMENDMENT TO CREDIT AGREEMENT

THIS SECOND AMENDMENT TO CREDIT AGREEMENT is made as of this 20th day of August,
2014, by and among AQUA AMERICA, INC., a Pennsylvania corporation (the
“Borrower”), the several banks which are parties to this Agreement (each a
“Bank” and collectively, the “Banks”) and PNC BANK, NATIONAL ASSOCIATION in its
capacity as agent for the Banks (in such capacity, the “Agent”).

BACKGROUND

A. The Borrower, the Agent and the Banks are parties to a Credit Agreement,
dated as of March 23, 2012 (the “Credit Agreement”), pursuant to which the Banks
agreed to make revolving credit loans to the Borrower in an aggregate
outstanding amount of up to $150,000,000 (the “Loans”).  The Loans are evidenced
by the Borrower’s Revolving Credit Notes in the aggregate principal face amount
of $150,000,000 (the “Notes”).

B. Pursuant to subsection 2.8(d) of the Credit Agreement, the Borrower has
requested an increase in the Total Commitment from $150,000,000 to $200,000,000.
Such increase is to become effective on August 20, 2014 (the “Effective Date”).

C. The Borrower, the Agent and the Banks desire to modify certain provisions of
the Credit Agreement to reflect the increase in the Total Commitment, all on the
terms and subject to the conditions herein set forth.

NOW THEREFORE, the parties hereto, intending to be legally bound hereby, agree
as follows:

AGREEMENT

1. Terms.  Capitalized terms used herein and not otherwise defined herein shall
have the meanings given to such terms in the Credit Agreement.

2. Amendment to Credit Agreement. 

(a) Effective on the Effective Date, Section 2.3(d) of the Credit Agreement
shall be amended and restated to read in full as follows:

All Borrowings, conversions and continuations of Revolving Credit Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections that, after giving effect
thereto, (A) the aggregate principal amount of the Revolving Credit Loans
comprising each Tranche of Eurodollar Loans shall be equal to $1,000,000 or a
whole multiple of $100,000 in excess thereof and (B) the Borrower

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shall not have outstanding at any one time more than in the aggregate five (5)
separate Tranches of Eurodollar Loans.

(b) Effective on the Effective Date, Schedule I of the Credit Agreement shall be
updated and replaced by the corresponding Schedule I set forth in Exhibit A
hereto. 

(c) Effective on the Effective Date, Schedule 3.13 of the Credit Agreement shall
be updated and replaced by the corresponding Schedule 3.13 set forth in Exhibit
B hereto.

3. Loan Documents.  Except where the context clearly requires otherwise, all
references to the Credit Agreement in any of the Loan Documents or any other
document delivered to the Banks or the Agent in connection therewith shall be to
the Credit Agreement as amended by this Agreement.

4. Borrower’s Ratification.  The Borrower agrees that it has no defenses or
set-offs against the Banks or the Agent or their respective officers, directors,
employees, agents or attorneys, with respect to the Loan Documents, all of which
are in full force and effect, and that all of the terms and conditions of the
Loan Documents not inconsistent herewith shall remain in full force and effect
unless and until modified or amended in writing in accordance with their terms. 
The Borrower hereby ratifies and confirms its obligations under the Loan
Documents as amended hereby and agrees that the execution and delivery of this
Agreement does not in any way diminish or invalidate any of its obligations
thereunder.

5. Representations and Warranties.  The Borrower hereby represents and warrants
to the Agent and the Banks that:

(a) The representations and warranties made in the Credit Agreement are true and
correct in all material respects as of the date hereof; provided, however, that
for purposes of the representations in Section 3.1 thereof, the annual and
quarterly financial information referred to in such Section shall be deemed to
be the most recent such information furnished to each Bank;

(b) No Default or Event of Default under the Credit Agreement exists on the date
hereof; and

(c) This Agreement has been duly authorized, executed and delivered so as to
constitute the legal, valid and binding obligations of the Borrower, enforceable
in accordance with their respective terms.

All of the above representations and warranties shall survive the making of this
Agreement.

6. Conditions Precedent.  The effectiveness of the amendment set forth herein is
subject to the fulfillment, to the satisfaction of the Agent and its counsel, of
the following conditions precedent on or before the Effective Date:

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(a) The Agent shall have received, with copies or counterparts for each Bank as
appropriate, the following, all of which shall be in form and substance
satisfactory to the Agent and shall be duly completed and executed by the
Borrower, the Agent and the Required Banks, as applicable:

(i)

This Agreement;  

(ii)

An amended and restated revolving credit note for each Bank in the face amount
of such Bank’s increased Commitment;  

(iii)

An Increased Commitment and Acceptance from each Bank; 

(iv)

Such additional documents, certificates and information as the Agent or the
Banks may require pursuant to the terms hereof or otherwise reasonably request.

(b) The Agent shall have received for the ratable account of the Banks an
upfront fee equal to 0.125% (12.5 basis points) multiplied by $50,000,000, which
amount represents the aggregate increase in the Total Commitment on the
Effective Date.    

(c) After giving effect to this Agreement, the representations and warranties
set forth in the Credit Agreement shall be true and correct in all material
respects on and as of the date hereof.

(d) No Default or Event of Default shall have occurred and be continuing as of
the date hereof.

7. Miscellaneous.

(a) All terms, conditions, provisions and covenants in the Loan Documents and
all other documents delivered to the Agent and the Banks in connection therewith
shall remain unaltered and in full force and effect except as modified or
amended hereby.  To the extent that any term or provision of this Agreement is
or may be deemed expressly inconsistent with any term or provision in any Loan
Document or any other document executed in connection therewith, the terms and
provisions hereof shall control.

(b) The execution, delivery and effectiveness of this Agreement shall neither
operate as a waiver of any right, power or remedy of the Agent or the Banks
under any of the Loan Documents nor constitute a waiver of any Default or Event
of Default thereunder.

(c) In consideration of the Agent’s and the Banks’ agreement to amend the
existing credit facility, the Borrower hereby waives and releases the Agent and
the Banks and their respective officers, attorneys, agents and employees from
any liability, suit, damage, claim,

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loss or expense of any kind or failure whatsoever and howsoever arising that it
ever had up until, or has as of, the date of this Agreement.

(d) This Agreement constitutes the entire agreement of the parties with respect
to the subject matter hereof and supersedes all prior and contemporaneous
understandings and agreements.

(e) In the event any provisions of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.

(f) This Agreement shall be governed by and construed according to the laws of
the Commonwealth of Pennsylvania.

(g) This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their respective successors and assigns and may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

(h) The headings used in this Agreement are for convenience of reference only,
do not form a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.

(i) This Agreement may be executed in one or more counterparts, each of which
counterparts when executed and delivered shall be deemed to be an original, and
all of which shall constitute one and the same instrument.  Delivery of an
executed counterpart of a signature page to this Agreement by facsimile or other
electronic transmission will be effective as delivery of a manually executed
counterpart hereof.

[signature pages follow]

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IN WITNESS WHEREOF, the Borrower, the Agent and the Required Banks have caused
this Agreement to be executed by their duly authorized officers as of the date
first above written.

 

 

 

 

 

AQUA AMERICA, INC.

By: 

/s/David Smeltzer

Name:

David Smeltzer

Title:

Executive Vice President and Chief Financial Officer

 

 

 

PNC BANK, NATIONAL ASSOCIATION,
as Agent and as a Bank

By:

/s/Domenic D’Ginto

Name:

Domenic D’Ginto

Title:

Senior Vice President

 

 

COBANK, ACB,
as a Bank

By:

/s/Bryan Ervin

Name:

Bryan Ervin

Title:

Vice President

 

 

 

 

 

THE HUNTINGTON NATIONAL BANK,
as a Bank

By:

/s/Michael Kiss

Name:

Michael Kiss

Title:

Vice President

 

 

 

 

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Exhibit A

 

 

 

Schedule I

Bank and Commitment Information

 

*

 

Bank

Swing Line

Commitment*

Commitment

 

 

 

PNC Bank, National Association

1600 Market Street

Philadelphia,  PA    19103

Attention:  Meredith Jermann

Telecopy:  (215) 585-6987

$15,000,000

$100,000,000

 

 

 

CoBank, ACB

5500 South Quebec Street

Greenwood Village,  CO 80111

Attention:  Bryan Ervin

Telecopy:  (303) 224-2609

$0

$80,000,000 

 

 

 

The Huntington National Bank

310 Grant Street, 4th Floor

Pittsburgh,  PA    15219

Attention:  W. Christopher Kohler

Telecopy:  (412) 227-6108

$0

$20,000,000

 

 

 

Total

$15,000,000

$200,000,000

 

 

 

 

*The Swing Line Commitment is a sublimit of the Commitment.

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Exhibit B

 

 

Schedule 3.13

Environmental Matters

 

Aqua acquired the South Haven IN wastewater system in 2008. The system was under
a court order to address sanitary sewer overflows. Aqua has made substantial
upgrades to the wastewater treatment plant and sewer collection system.
Additional upgrades to the collection system are budgeted for 2012 through 2014
at a total estimated cost of $1.1 million. Aqua is negotiating with the US
Department of Justice and USEPA Region 5 to close out the court order. 

Aqua has made improvements to the Utility Center wastewater collection system in
Allen County, IN that was acquired in 2003. Installation of a diversion sewer
force main and a new lift station are budgeted for 2012 through 2014 at an
estimated cost of $5.8 million. These improvements are in conformance with an
amended Compliance Plan submitted by Aqua to the Indiana Department of
Environmental Management to address wet weather sanitary sewer overflows. 

Aqua acquired the Veranda wastewater system from Gray Utilities, Inc. in 2011.
The system is under a Compliance Agreement with the Texas Commission on
Environmental Quality effective September 28, 2011, requiring construction of a
new wastewater treatment plant budgeted for 2012 and 2013 at an estimated cost
of $3.2 million. The plant has been designed and permitted and construction is
underway.

The Brittmore I&II wastewater plant is under an Agreed Order with the Texas
Commission on Environmental Quality to evaluate and upgrade the wastewater
treatment plant. The work is being done in phases, and the final phase is
budgeted for 2012 and 2013 at an estimated cost of $1.0 million.  

Aqua acquired the Treasure Lake water and wastewater systems in Pennsylvania in
2013.  The wastewater system contains two wastewater treatment plants and
collection systems.  The older of the two plants, the East Plant, received a
Notice of Violation from PADEP in September, 2013 as a result of its generally
poor condition.  Aqua is currently investigating either the rehabilitation of
the plant or abandoning it and transferring the flow to an upgraded West Plant.
Although cost estimates are preliminary and final path not determined, the total
costs to address the condition of the plant could be in excess of $1.0 million.

Aqua acquired the Presidential water and wastewater systems in Virginia in
2014.  As part of the purchase agreements, Aqua entered a Consent Order with the
Virginia DEQ to install a new wastewater treatment plant to replace the existing
plant which is in poor condition.  The new plant is budgeted at $1.3 million.

Aqua acquired the Mifflin Township Water Authority (MTWA) in Pennsylvania in
2012.  The MTWA had entered into a Consent Order with the Pennsylvania
Department of Environmental Protection (PADEP) in 2008 to address excessive
water loss estimated at approximately 85% due to leaks in the system.  The
consent order required water loss to be reduced to 30%.  Aqua

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inherited the existing consent order and its obligations as part of the purchase
in 2012.  Currently, Aqua is budgeting over $2 million in its existing 5 year
capital plan for water main replacement work in Mifflin Township to satisfy the
consent order requirements. 

 

 

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