Document:

Exhibit 4.38

Exhibit 4.38

Prepared by and Return to:

Mary T. Tomich, Esq.

Dilworth Paxson LLP

1500 Market Street

Suite 3500E

Philadelphia, PA 19102

215-575-7000

 

 

FORTY-FOURTH SUPPLEMENTAL

INDENTURE

DATED AS OF JULY 1, 2009

TO

INDENTURE OF MORTGAGE

DATED AS OF JANUARY 1, 1941

AQUA PENNSYLVANIA, INC.

TO

THE BANK OF NEW YORK MELLON TRUST COMPANY, N. A.

 

 

 

 

 

THIS FORTY-FOURTH SUPPLEMENTAL INDENTURE dated as of July 1, 2009, by and between AQUA
PENNSYLVANIA, INC. (f/k/a Pennsylvania Suburban Water Company), a corporation duly organized and
existing under the laws of the Commonwealth of Pennsylvania (the “Company”) as successor by merger
to the Philadelphia Suburban Water Company (the “Original Company”), party of the first part, and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N. A., a national banking association (the “Trustee”),
party of the second part.

WHEREAS, the Original Company heretofore duly executed and delivered to The Pennsylvania
Company for Insurances on Lives and Granting Annuities, as trustee, an Indenture of Mortgage dated
as of January 1, 1941 (the “Original Indenture”), which by reference is hereby made a part hereof,
and in and by the Original Indenture the Original Company conveyed and mortgaged to such trustee
certain property therein described, to secure the payment of its bonds to be generally known as its
“First Mortgage Bonds” and to be issued under the Original Indenture in one or more series as
therein provided; and

WHEREAS, through a series of mergers, changes of names and successions, The Bank of New York
Mellon Trust Company, N. A. became the successor trustee; such mergers, changes of name and
successions not involving any change in the title, powers, rights or duties of the trustee, as
trustee under the Original Indenture as supplemented at the respective dates thereof; and

WHEREAS, the Original Company duly executed and delivered to the Trustee thirty-four
supplemental indentures supplemental to the Original Indenture, and the Company duly executed and
delivered to the Trustee eight supplemental indentures to the Original Indenture so as to subject
certain additional property to the lien of the Original Indenture and to provide for the creation
of additional series of bonds; and

WHEREAS, pursuant to an Agreement and Plan of Merger and Reorganization dated December 20,
2001, and effective on January 1, 2002, the Original Company agreed to merge, in conjunction with
its affiliated corporations, Consumers Pennsylvania Water Company — Shenango Valley Division,
Consumers Pennsylvania Water Company — Roaring Creek Division, Consumers Pennsylvania Water
Company — Susquehanna Division, Waymart Water Company, Fawn Lake Forrest Water Company, Western
Utilities, Inc., and Northeastern Utilities, Inc. (such affiliates referred to hereinafter as the
“Merging Entities”) with and into the Company; and

WHEREAS, pursuant to the Thirty-Fifth Supplemental Indenture dated as of January 1, 2002 (the
“Thirty-Fifth Supplemental Indenture”), the Company agreed to assume the obligations of the
Original Company under the Original Indenture and all supplements thereto; and

WHEREAS, the Company and its predecessor have issued under the Original Indenture, as
supplemented at the respective dates of issue, fifty-four series of First Mortgage Bonds
designated, respectively, as set forth in the following table, the Original or Supplemental
Indenture creating each series and the principal amount of bonds thereof issued being indicated
opposite the designation of such series:

 

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	Designation	 	Indenture	 	Amount
	3 1/4% Series due 1971

	 	Original
	 	$	16,375,000	 
	9 5/8% Series due 1975

	 	Thirteenth Supplemental
	 	 	10,000,000	 
	9.15% Series due 1977

	 	Fourteenth Supplemental
	 	 	10,000,000	 
	3% Series due 1978

	 	First Supplemental
	 	 	2,000,000	 
	3 3/8% Series due 1982

	 	Second Supplemental
	 	 	4,000,000	 
	3.90% Series due 1983

	 	Third Supplemental
	 	 	5,000,000	 
	3 1/2% Series due 1986

	 	Fourth Supplemental
	 	 	6,000,000	 
	4 1/2% Series due 1987

	 	Fifth Supplemental
	 	 	4,000,000	 
	4 1/8% Series due 1988

	 	Sixth Supplemental
	 	 	4,000,000	 
	5% Series due 1989

	 	Seventh Supplemental
	 	 	4,000,000	 
	4 5/8% Series due 1991

	 	Eighth Supplemental
	 	 	3,000,000	 
	4.70% Series due 1992

	 	Ninth Supplemental
	 	 	3,000,000	 
	6 7/8% Series due 1993

	 	Twelfth Supplemental
	 	 	4,500,000	 
	4.55% Series due 1994

	 	Tenth Supplemental
	 	 	4,000,000	 
	10 1/8% Series due 1995

	 	Sixteenth Supplemental
	 	 	10,000,000	 
	5 1/2% Series due 1996

	 	Eleventh Supplemental
	 	 	4,000,000	 
	7 7/8% Series due 1997

	 	Fifteenth Supplemental
	 	 	5,000,000	 
	8.44% Series due 1997

	 	Twenty-Third Supplemental
	 	 	12,000,000	 
	9.20% Series due 2001

	 	Seventeenth Supplemental
	 	 	7,000,000	 
	8.40% Series due 2002

	 	Eighteenth Supplemental
	 	 	10,000,000	 
	5.95% Series due 2002

	 	Twenty-Seventh Supplemental
	 	 	4,000,000	 
	12.45% Series due 2003

	 	Twentieth Supplemental
	 	 	10,000,000	 
	13% Series due 2005

	 	Twenty-First Supplemental
	 	 	8,000,000	 
	10.65% Series due 2006

	 	Twenty-Second Supplemental
	 	 	10,000,000	 
	9.89% Series due 2008

	 	Twenty-Fourth Supplemental
	 	 	5,000,000	 
	7.15% Series due 2008

	 	Twenty-Eighth Supplemental
	 	 	22,000,000	 
	9.12% Series due 2010

	 	Twenty-Fifth Supplemental
	 	 	20,000,000	 
	8 7/8% Series due 2010

	 	Nineteenth Supplemental
	 	 	8,000,000	 
	6.50% Series due 2010

	 	Twenty-Seventh Supplemental
	 	 	3,200,000	 
	9.17% Series due 2011

	 	Twenty-Sixth Supplemental
	 	 	5,000,000	 
	9.93% Series due 2013

	 	Twenty-Fourth Supplemental
	 	 	5,000,000	 
	9.97% Series due 2018

	 	Twenty-Fourth Supplemental
	 	 	5,000,000	 
	9.17% Series due 2021

	 	Twenty-Sixth Supplemental
	 	 	8,000,000	 
	9.29% Series due 2026

	 	Twenty-Sixth Supplemental
	 	 	12,000,000	 
	1995 Medium Term Note Series

	 	Twenty-Ninth Supplemental
	 	 	77,000,000	 
	6.35% Series due 2025

	 	Thirtieth Supplemental
	 	 	22,000,000	 
	1997 Medium Term Note Series

	 	Thirty-First Supplemental
	 	 	65,000,000	 
	6.75% Subseries A due 2007

	 	 	10,000,000	 	 	 	 	 
	6.30% Subseries B due 2002

	 	 	10,000,000	 	 	 	 	 
	6.14% Subseries C due 2008

	 	 	10,000,000	 	 	 	 	 
	5.80% Subseries D due 2003

	 	 	10,000,000	 	 	 	 	 
	5.85% Subseries E due 2004

	 	 	10,000,000	 	 	 	 	 

 

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	Designation	 	Indenture	 	Amount
	6.00% Subseries F due 2004

	 	 	15,000,000	 	 	 	 	 
	6.00% Series due 2029

	 	Thirty-Second Supplemental
	 	 	25,000,000	 
	1999 Medium Term Note Series

	 	Thirty-Third Supplemental
	 	 	222,334,480	 
	7.40% Subseries A due 2005

	 	 	15,000,000	 	 	 	 	 
	7.40% Subseries B due 2005

	 	 	11,000,000	 	 	 	 	 
	6.21% Subseries C due 2011

	 	 	15,000,000	 	 	 	 	 
	9.53% Subseries D due 2019

	 	 	4,000,000	 	 	 	 	 
	6.375% Subseries E due 2023

	 	 	14,000,000	 	 	 	 	 
	8.26% Subseries F due 2022

	 	 	1,500,000	 	 	 	 	 
	9.50% Subseries G due 2006

	 	 	1,440,000	 	 	 	 	 
	9.22% Subseries H due 2019

	 	 	2,534,480	 	 	 	 	 
	8.32% Subseries I due 2022

	 	 	3,500,000	 	 	 	 	 
	8.14% Subseries J due 2025

	 	 	4,000,000	 	 	 	 	 
	6.00% Subseries K due 2030

	 	 	18,360,000	 	 	 	 	 
	5.93% Subseries L due 2012

	 	 	25,000,000	 	 	 	 	 
	2.65% Subseries M due 2006

	 	 	5,000,000	 	 	 	 	 
	3.461% Subseries N due 2007

	 	 	12,000,000	 	 	 	 	 
	5.08% Subseries O due 2015

	 	 	20,000,000	 	 	 	 	 
	5.17% Subseries P due 2017

	 	 	7,000,000	 	 	 	 	 
	5.751% Subseries Q due 2019

	 	 	15,000,000	 	 	 	 	 
	5.751% Subseries R due 2019

	 	 	5,000,000	 	 	 	 	 
	6.06% Subseries S due 2027

	 	 	15,000,000	 	 	 	 	 
	6.06% Subseries T due 2027

	 	 	5,000,000	 	 	 	 	 
	5.98% Subseries U due 2028

	 	 	3,000,000	 	 	 	 	 
	5.35% Series due 2031

	 	Thirty-Fourth Supplemental
	 	 	30,000,000	 
	5.55% Series due 2032

	 	Thirty-Sixth Supplemental
	 	 	25,000,000	 
	3.75% Series due 2010

	 	Thirty-Seventh Supplemental
	 	 	3,200,000	 
	5.15% Series due 2032

	 	Thirty Seventh Supplemental
	 	 	25,000,000	 
	5.05% Series due 2039

	 	Thirty-Eighth Supplemental
	 	 	14,000,000	 
	5.00% Series due 2036

	 	Thirty-Ninth Supplemental
	 	 	21,770,000	 
	5.00% Series due 2037

	 	Thirty-Ninth Supplemental
	 	 	24,165,000	 
	5.00% Series due 2038

	 	Thirty-Ninth Supplemental
	 	 	25,375,000	 
	5.00% Series due 2035

	 	Fortieth Supplemental
	 	 	24,675,000	 
	5.00% Series due 2040

	 	Forty-first Supplemental
	 	 	23,915,000	 
	5.00% Series due 2041

	 	Forty-first Supplemental
	 	 	23,915,000	 
	5.25% Series due 2042

	 	Forty-second Supplemental
	 	 	24,830,000	 
	5.25% Series due 2043

	 	Forty-second Supplemental
	 	 	24,830,000	 
	6.25% Series due 2017

	 	Forty-third Supplemental
	 	 	9,000,000	 
	6.75% Series due 2018

	 	Forty-third Supplemental
	 	 	13,000,000	 

WHEREAS, the bonds of each of said series that are presently outstanding are listed on
Exhibit A attached hereto and made a part hereof; and

WHEREAS, in order to secure the lien of the Original Indenture on the properties of the
Original Company and the Company, the Original Indenture and the first forty-three supplemental
indentures supplemental to the Original Indenture were duly recorded in the

 

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Commonwealth of Pennsylvania on the dates and in the office for the Recording of Deeds for the
counties and in the Mortgage Books at the pages indicated in Exhibit B hereto; and

WHEREAS, in addition to the property described in the Original Indenture and the First through
Forty-third Supplemental Indentures thereto, the Company has acquired certain other property and
desires to confirm the lien of the Original Indenture thereon and in order to confirm such lien
shall cause this Forty-fourth supplemental Indenture, with a true and correct copy of the Original
Indenture attached hereto as Exhibit D (redacted to delete property descriptions for
counties in which such Original Indenture has already been recorded), to be recorded in the office
for the Recording of Deeds for the counties of Clarion, Venango and Warren; and

WHEREAS, the lien of the Original Indenture, as supplemented, has been perfected as a security
interest under the Pennsylvania Uniform Commercial Code by filing a financing statement in the
office of the Secretary of the Commonwealth; and

WHEREAS, the Company proposes to create under the Original Indenture, as supplemented by this
Forty-fourth Supplemental Indenture, a series of bonds to be designated “First Mortgage Bonds,
5.00% Series due 2039” (herein referred to as the “5.00% Series due 2039” or the “Bonds”) to be
limited in aggregate principal amount to $58,000,000 to bear interest at the rate of 5.00% per
annum, and to mature on October 1, 2039, such series to be issued only as registered bonds without
coupons and to be dated the date of delivery thereof; and

WHEREAS, in order to finance the costs of numerous acquisitions, constructions, modifications,
expansions, installations and replacements of the Company’s water distribution, treatment and
related operating systems located in the Counties of Chester, Delaware and Montgomery in
Pennsylvania and that are part of the Company’s system for the distribution of water to its
customers and related financing costs, which are to be financed under a Financing Agreement dated
as of July 1, 2009 (the “Financing Agreement”) between the Company and the Pennsylvania Economic
Development Financing Authority, a Pennsylvania body politic and corporate (the “Authority”), and
which are described in Exhibit A thereto (which facilities, less any deletions therefrom
and together with any additions, improvements and modifications thereto and substitutions therefore
made in accordance with the provisions of the Financing Agreement are referred to as the
“Facilities”), the Company has requested the Authority to issue a new series of bonds to be known
as the Authority’s Water Facilities Revenue Bonds (Aqua Pennsylvania, Inc. Project), Series A of
2009 the aggregate principal amount of $58,000,000 (the “Authority Bonds”); and

WHEREAS, the Company proposes to issue the Bonds under the provisions of Article IV of the
Original Indenture, and will comply with the provisions thereof as well as with other provisions of
the Original Indenture and indentures supplemental thereto in connection with the issuance of
additional bonds so that it will be entitled to procure the authentication and delivery of the
Bonds; and

WHEREAS, the Authority Bonds are to be issued under a Trust Indenture, dated as of July 1,
2009 (the “Authority Indenture”), between the Authority and U.S. Bank National Association, as
trustee (the “Authority Trustee”); and

 

5

 

WHEREAS, the proceeds of the Authority Bonds are to be loaned to the Company pursuant to the
terms of the Financing Agreement and the Bonds are to be issued by the Company to secure the
obligation of the Company to pay to or for the account of the Authority an amount equal to the
principal of, redemption premium, if any, and interest on the Authority Bonds pursuant to the
Financing Agreement; and

WHEREAS, the right, title and interest of the Authority in and to the Financing Agreement and
the payments thereunder and the security for such payments are to be assigned by the Authority to
the Authority Trustee, and the Bonds are to be delivered by the Company on behalf of the Authority
directly to the Authority Trustee, as assignee of the Authority, as security for the payment of the
principal of, redemption premium, if any, and interest on, the Authority Bonds; and

WHEREAS, Article XVIII of the Original Indenture provides that the Company, when authorized by
resolution of its Board of Directors, may with the Trustee enter into an indenture supplemental to
the Original Indenture, which thereafter shall form a part of the Original Indenture, for the
purposes, inter alia, of subjecting to the lien of the Original Indenture additional property, of
defining the covenants and provisions applicable to any bonds of any series other than the 3 1/4%
Series due 1971, of adding to the covenants and agreements of the Company contained in the Original
Indenture other covenants and agreements thereafter to be observed by the Company, of surrendering
any right or power in the Original Indenture reserved to or conferred upon the Company, and of
making such provisions in regard to matters or questions arising under the Original Indenture as
may be necessary or desirable and not inconsistent therewith; and

WHEREAS, the Company, by proper corporate action, has duly authorized the creation of the
5.00% Series due 2039 (to be issued in accordance with the terms and provisions of the Original
Indenture and indentures supplemental thereto, including this Forty-fourth Supplemental Indenture,
and to be secured by said Original Indenture and indentures supplemental thereto, including this
Forty-fourth Supplemental Indenture) and has further duly authorized the execution, delivery and
recording of this Forty-fourth Supplemental Indenture setting forth the terms and provisions of the
5.00% Series due 2039 insofar as said terms and provisions are not set forth in said Original
Indenture; and

WHEREAS, the Bonds and the Trustee’s certificate upon said Bonds are to be substantially in
the following form, the proper amount, names of registered owners and numbers to be inserted
therein, and such appropriate insertions, omissions and changes to be made therein as may be
required or permitted by this Indenture to conform to any pertinent law or usage:

[Form of 5.00% Series due 2039]

			
	 	 	 
	No. R-1
	 	$                                        

AQUA PENNSYLVANIA, INC.

(Incorporated under the Laws of the Commonwealth

of Pennsylvania)

First Mortgage Bond, 5.00% Series due 2039

 

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Aqua Pennsylvania, Inc. (f/k/a known as Pennsylvania Suburban Water Company, successor by
merger to Philadelphia Suburban Water Company), a corporation organized and existing under the laws
of the Commonwealth of Pennsylvania (hereinafter called the “Company”, which term shall include any
successor corporation as defined in the Indenture hereinafter referred to), for value received,
hereby promises to pay to Pennsylvania Economic Development Financing Authority or its registered
assigns, on the 1st day of October, 2039, at the designated office of The Bank of New York Mellon
Trust Company, N. A. (hereinafter called the “Trustee”) in Philadelphia, Pennsylvania, the sum of
Fifty-eight Million Dollars in such coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts and to pay interest thereon
to the registered owner hereof by draft or check of the Trustee mailed to such registered owner
from the interest payment date next preceding the date of the authentication of this Bond (or if
this Bond is authenticated after a Record Date as defined below and on or before the succeeding
interest payment date, from such succeeding interest payment date, or if this Bond is authenticated
on or prior to October 1, 2009 from the date hereof) until the principal hereof shall become due
and payable, at the rate of 5.00% per annum, payable semiannually in like coin or currency on the
first day of April and the first day of October in each year, commencing October 1, 2009 and to pay
interest on overdue principal (including any overdue required or optional prepayment of principal)
and premium, if any, and, to the extent legally enforceable, on any overdue installment of interest
at a rate of 5.00% per annum after maturity whether by acceleration or otherwise until paid.

The interest so payable will (except as otherwise provided in the Forty-fourth Supplemental
Indenture referred to herein) be calculated on the basis of a 360-day year of twelve 30-day months
and be paid to the person in whose name this Bond (or a Bond or Bonds in exchange for which this
Bond was issued) is registered at the close of business on the fifteenth day of the calendar month
next preceding the month in which the interest payment date occurs whether or not such day is a
business day (a “Record Date”) and principal, premium, if any, and interest on this Bond shall be
paid in accordance with written payment instructions of the registered owner delivered to the
Trustee on or before such record date.

This Bond is one of a duly authorized issue of bonds of the Company known as its First
Mortgage Bonds, issued and to be issued without limitation as to aggregate principal amount except
as set forth in the Indenture hereinafter mentioned in one or more series and equally secured
(except insofar as a sinking fund or other similar fund established in accordance with the
provisions of the Indenture may afford additional security for the bonds of any specific series) by
an Indenture of Mortgage (herein called the “Indenture”) dated as of January 1, 1941, executed by
the Philadelphia Suburban Water Company (now Aqua Pennsylvania, Inc., f/k/a Pennsylvania Suburban
Water Company, as successor by merger) to The Pennsylvania Company for Insurances on Lives and
Granting Annuities (succeeded as trustee by The Bank of New York Mellon Trust Company, N.A.), as
Trustee (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is
hereby made for a description of the property mortgaged and pledged, the nature and extent of the
security, the rights of the holders and registered owners of the bonds and of the Trustee in
respect of such security, and the terms and conditions under which the bonds are and are to be
secured and may be issued under the Indenture; but neither the foregoing reference to the Indenture
nor any provision of this Bond or of the Indenture or of any

 

7

 

indenture supplemental thereto shall affect or impair the obligation of the Company, which is
absolute and unconditional, to pay at the stated or accelerated maturity herein and in the
Indenture provided, the principal of and premium, if any, and interest on this Bond as herein
provided. As provided in the Indenture, the bonds may be issued in series for various principal
amounts, may bear different dates and mature at different times, may bear interest at different
rates and may otherwise vary as in the Indenture provided or permitted. This Bond is one of the
Bonds described in an indenture supplemental to said Indenture known as the “Forty-fourth
Supplemental Indenture” dated as of July 1, 2009, and designated therein as “First Mortgage Bonds,
5.00% Series due 2039” (the “Bonds”).

To the extent permitted by and as provided in the Indenture, modifications or alterations of
the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the
Company and of the holders and registered owners of bonds issued and to be issued thereunder may be
made with the consent of the Company by an affirmative vote of the holders and registered owners of
not less than 75% in principal amount of bonds then outstanding under the Indenture and entitled to
vote, at a meeting of the bondholders called and held as provided in the Indenture, and, in case
one or more but less than all of the series of bonds then outstanding under the Indenture are so
affected, by an affirmative vote of the holders and registered owners of not less than 75% in
principal amount of bonds of any series then outstanding under the Indenture and entitled to vote
on and affected by such modification or alteration, or by the written consent of the holders and
registered owners of such percentages of bonds; provided, however, that no such modification or
alteration shall be made which shall reduce the percentage of bonds the consent of the holders or
registered owners of which is required for any such modification or alteration or which shall
affect the terms of payment of the principal of or interest on the bonds, or permit the creation by
the Company of any lien prior to or on a parity with the lien of the Indenture with respect to any
property subject to the lien of the Indenture as a first mortgage lien thereon, or which shall
affect the rights of the holders or registered owners of less than all of the bonds of any series
affected thereby.

The Bonds have been issued by the Company to secure the obligation of the Company to pay to or
for the account of the Authority (defined below) an amount equal to the principal, premium, if any,
of, and interest on, the Authority Bonds (defined below) pursuant to the Financing Agreement (the
“Financing Agreement”) dated as of July 1, 2009 between the Pennsylvania Economic Development
Financing Authority, a Pennsylvania body politic and corporate (the “Authority”), and the Company,
which Authority Bonds are being issued to finance the costs of numerous constructions,
modifications, expansions, installations and replacements of the Company’s water distribution,
treatment and related operating systems located in the Counties of Chester, Delaware and Montgomery
in Pennsylvania and that are part of the Company’s system for the distribution of water to its
customers and related financing costs which are to be financed under the Financing Agreement and
which are described in Exhibit A thereto (which facilities, less any deletions therefrom
and together with any additions, improvements and modifications thereto and substitutions therefor
made in accordance with the provisions of the Financing Agreement are referred to as the
“Facilities”). The Facilities are to be financed through the sale of the Authority’s Water
Facilities Revenue Bonds (Aqua Pennsylvania, Inc. Project), Series A of 2009, in the aggregate
principal amount of $58,000,000 (the “Authority Bonds”).

 

8

 

The Authority Bonds are to be issued under a Trust Indenture, dated as of July 1, 2009 (the
“Authority Indenture”) between the Authority and U.S. Bank National Association, as trustee (the
“Authority Trustee”). The right, title and interest of the Authority in and to the Financing
Agreement and the payments thereunder and the security for such payments have been assigned by the
Authority to the Authority Trustee, and the Bonds have been delivered by the Company on behalf of
the Authority directly to the Authority Trustee, as assignee, as security for the payment of the
principal of, and premium, if any, and interest on, the Authority Bonds. The Authority Trustee may
not sell, assign or otherwise transfer the Bonds except for a transfer of the entire outstanding
principal amount thereof to its successor as trustee under the Authority Indenture, which successor
and each subsequent successor shall hold such Authority Bonds subject to the same restriction on
transfer.

In the event any Authority Bonds shall be purchased by the Company and cancelled pursuant to
the Authority Indenture, Bonds corresponding in principal amount to the Authority Bonds so
purchased and cancelled shall be deemed to be paid in full, and in the event and to the extent the
principal of, and premium, if any, or interest on, any Authority Bonds is paid out of funds held by
the Authority Trustee other than payments on Bonds, the corresponding payment of the principal of
and premium, if any, or interest on, an aggregate principal amount of Bonds shall be deemed to have
been satisfied.

In the event this Bond shall be deemed to have been paid in full, this Bond shall be
surrendered to the Trustee for cancellation. In the event this Bond shall be deemed to have been
paid in part, this Bond shall be presented to the Trustee for notation hereon of the payment of the
portion of the principal hereof so deemed to have been paid.

The Bonds are redeemable only as follows:

(a) The Bonds are subject to redemption prior to maturity, at the option of the Company, on or
after October 1, 2019 in whole or in part, at a redemption price of 100% of the principal amount of
the Bonds to be redeemed, plus interest accrued thereon to the date fixed for redemption.

(b) The Bonds are also subject to redemption at the direction of the Company, in whole, at any
time prior to maturity, at a redemption price of 100% of the principal amount of the bonds to be
redeemed, plus interest accrued thereon to the date fixed for redemption, at any time the Authority
Bonds are subject to extraordinary optional redemption pursuant to Section 7.01(a)(ii) of the
Authority Indenture.

(c) The Bonds are also subject to special mandatory redemption at the direction of the
Company, in part, prior to maturity, at a redemption price of 100% of the principal amount of the
bonds to be redeemed, plus interest accrued thereon to the date fixed for redemption, at such time
and in such amount as the Authority Bonds are subject to special mandatory redemption pursuant to
Section 7.01(a)(iii) of the Authority Indenture.

(d) The Bonds are also subject to mandatory redemption by the Company in whole if the Trustee
shall receive a written demand from the Authority Trustee for redemption of all such Bonds held by
the Authority Trustee stating that an “Event of Default” as defined in Section

 

9

 

9.01(a) of the Authority Indenture has occurred and is continuing and that payment of the
principal of the Authority Bonds has been accelerated pursuant to Section 9.01(b) of the Authority
Indenture, provided that at the time of notice of such redemption as provided in Section 2 of
Article V of the Original Indenture (i) said written demand shall not have been withdrawn by the
Authority Trustee, and (ii) no event of default under Section 1 of Article XI of the Original
Indenture shall have occurred and be continuing.

If this Bond or any portion hereof is called for redemption and payment thereof is duly
provided for as specified in the Indenture, interest shall cease to accrue hereon or on such
portion, as the case may be, from and after the date fixed for redemption.

The principal hereof may be declared or may become due prior to its maturity date on the
conditions, in the manner and with the effect set forth in the Indenture upon the happening of an
event of default, as in the Indenture provided; subject, however, to the right, under certain
circumstances, of the registered owners of a majority in principal amount of Bonds outstanding to
annul such declaration.

This Bond is transferable by the registered owner hereof in person or by attorney duly
authorized in writing, on books of the Company to be kept for that purpose at the designated
office of the Trustee in Philadelphia, Pennsylvania upon surrender hereof for cancellation at such
office and upon presentation of a written instrument of transfer duly executed, and thereupon the
Company shall issue in the name of the transferee or transferees, and the Trustee shall
authenticate and deliver, a new Bond or Bonds in authorized denominations, of equal aggregate
unpaid principal amount. Any such transfer or exchange shall be subject to the terms and conditions
and to the payment of the charges specified in the Indenture.

The Company and the Trustee may deem and treat the registered owner of this Bond as the
absolute owner hereof for the purpose of receiving payment of or on account of the principal hereof
and the interest hereon, and for all other purposes, and shall not be affected by any notice to the
contrary.

No recourse shall be had for the payment of the principal of or interest on this Bond or for
any claim based hereon or otherwise in respect hereof or of the Indenture or of any indenture
supplemental thereto against any incorporator or any past, present or future stockholder, officer
or director of the Company or of any predecessor or successor corporation, as such, either directly
or through the Company or through any such predecessor or successor corporation or through any
receiver or trustee in bankruptcy, by virtue of any constitutional provision, statute or rule of
law or equity, or by the enforcement of any assessment or penalty or otherwise; all such liability
being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly
waived and released by every holder or registered owner hereof, as more fully provided in the
Indenture.

This Bond shall not be entitled to any benefit under the Indenture or any indenture
supplemental thereto, or become valid or obligatory for any purpose, until The Bank of New York
Mellon Trust Company, N. A., as Trustee under the Indenture, or a successor trustee thereunder,
shall have signed the certificate of authentication endorsed hereon.

 

10

 

IN WITNESS WHEREOF, Aqua Pennsylvania, Inc. has caused this Bond to be signed by its President
or a Vice President and its corporate seal to be hereto affixed and attested by its Secretary or an
Assistant Secretary, and this Bond to be dated
 _____ 
, 2009.

	 	 	 
	Attest:

	 	AQUA PENNSYLVANIA, INC.
	 
	 	 
	                                                            

	 	By:                                                                            
     
	(Assistant) Secretary

	 	       Vice President

(Form of Trustee’s Certificate)

This Bond is one of the Bonds, of the series designated therein, referred to in the
within-mentioned Forty-fourth Supplemental Indenture.

	 	 	 	 	 
	 	THE BANK OF NEW YORK

MELLON TRUST COMPANY, N. A.,

as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signer 	 
	 	 	 	 
	 

and;

WHEREAS, all acts and things necessary to make the Bonds, when executed by the Company and
authenticated and delivered by the Trustee as in this Forty-fourth Supplemental Indenture provided
and issued by the Company, valid, binding and legal obligations of the Company, and this
Forty-fourth Supplemental Indenture a valid and enforceable supplement to said Original Indenture,
have been done, performed and fulfilled, and the execution of this Forty-fourth Supplemental
Indenture has been in all respects duly authorized; and

NOW, THEREFORE, THIS FORTY-FOURTH SUPPLEMENTAL INDENTURE WITNESSETH: That, in order to secure
the payment of the principal and interest of all bonds issued under the Original Indenture and all
indentures supplemental thereto, according to their tenor and effect, and according to the terms of
the Original Indenture and of any indenture supplemental thereto, and to secure the performance of
the covenants and obligations in said bonds and in the Original Indenture and any indenture
supplemental thereto respectively contained, and to provide for the proper issuing, conveying and
confirming unto the Trustee, its successors in said trust and its and their assigns forever, upon
the trusts and for the purposes expressed in the Original Indenture and in any indenture
supplemental thereto, all and singular the estates, property and franchises of the Company thereby
mortgaged or intended so to be, the Company, for and in consideration of the premises and of the
sum of One Dollar ($1.00) in hand paid by the Trustee to the Company upon the execution and
delivery of this Forty-fourth

 

11

 

Supplemental Indenture, receipt whereof is hereby acknowledged, and of other good and valuable
consideration, and intending to be legally bound, has granted, bargained, sold, aliened, enfeoffed,
released and confirmed and by these presents does grant, bargain, sell, alien, enfeoff, release and
confirm unto The Bank of New York Mellon Trust Company, N. A., as Trustee, and to its successors in
said trust and its and their assigns forever:

All and singular the premises, property, assets, rights and franchises of the Company, whether
now or hereafter owned, constructed or acquired, of whatever character and wherever situated
(except as herein expressly excepted), including among other things the following, but reference to
or enumeration of any particular kinds, classes, or items of property shall not be deemed to
exclude from the operation and effect of the Original Indenture or any indenture supplemental
thereto any kind, class or item not so referred to or enumerated:

I.

REAL ESTATE AND WATER RIGHTS.

The real estate, if any, described in the deeds from the grantors named in Exhibit C
hereto, dated and recorded as therein set forth, and any other real estate and water rights
acquired since the date of the Forty-third Supplemental Indenture.

II.

BUILDINGS AND EQUIPMENT.

All mains, pipes, pipe lines, service pipes, buildings, improvements, standpipes, reservoirs,
wells, flumes, sluices, canals, basins, cribs, machinery, conduits, hydrants, water works, plants
and systems, tanks, shops, structures, purification systems, pumping stations, fixtures, engines,
boilers, pumps, meters and equipment which are now owned or may hereafter be acquired by the
Company (except as herein expressly excepted), including all improvements, additions and extensions
appurtenant to any real or fixed property now or hereafter subject to the lien of the Original
Indenture or any indenture supplemental thereto which are used or useful in connection with the
business of the Company as a water company or as a water utility, whether any of the foregoing
property is now owned or may hereafter be acquired by the Company.

It is hereby declared by the Company that all property of the kinds described in the next
preceding paragraph, whether now owned or hereafter acquired, has been or is or will be owned or
acquired with the intention of using the same in carrying on the business or branches of the
business of the Company, and it is hereby declared that it is the intention of the Company that all
thereof (except property hereinafter specifically excepted) shall be subject to the lien of the
Original Indenture.

It is agreed by the Company that so far as may be permitted by law, tangible personal property
now owned or hereafter acquired by the Company, except such as is hereafter expressly excepted from
the lien hereof, shall be deemed to be and construed as fixtures and appurtenances to the real
property of the Company.

 

12

 

III.

FRANCHISES AND RIGHTS OF WAY.

All the corporate and other franchises of the Company, all water and flowage rights, riparian
rights, easements and rights of way, and all permits, licenses, rights, grants, privileges and
immunities, and all renewals, extensions, additions or modifications of any of the foregoing,
whether the same or any thereof, or any renewals, extensions, additions or modifications thereof,
are now owned or may hereafter be acquired, owned, held, or enjoyed by the Company.

IV.

AFTER ACQUIRED PROPERTY.

All real and fixed property and all other property of the character hereinabove described
which the Company may hereafter acquire.

TOGETHER WITH all and singular the tenements, hereditaments and appurtenances belonging or in
any way appertaining to the aforesaid property or any part thereof, with the reversion and
reversions, remainder and remainders, tolls, rents, revenues, issues, income, product and profits
thereof, and all the estate, right, title, interest and claim whatsoever, at law as well as in
equity, which the Company now has or may hereafter acquire in and to the aforesaid premises,
property, rights and franchises and every part and parcel thereof.

EXCEPTING AND RESERVING, HOWEVER, certain premises, not used or useful in the supplying of
water by the Company, expressly excepted and reserved from the lien of the Original Indenture and
not subject to the terms thereof.

AND ALSO SAVING AND EXCEPTING from the property hereby mortgaged and pledged, all of the
following property (whether now owned by the Company or hereafter acquired by it): All bills, notes
and accounts receivable, cash on hand and in banks, contracts, choses in action and leases to
others (as distinct from the property leased and without limiting any rights of the Trustee with
respect thereto under any of the provisions of the Original Indenture or of any indenture
supplemental thereto), all bonds, obligations, evidences of indebtedness, shares of stock and other
securities, and certificates or evidences of interest therein, all automobiles, motor trucks, and
other like automobile equipment and all furniture, and all equipment, materials, goods, merchandise
and supplies acquired for the purpose of sale in the ordinary course of business or for consumption
in the operation of any properties of the Company other than any of the foregoing which may be
specifically transferred or assigned to or pledged or deposited with the Trustee hereunder or
required by the provisions of the Original Indenture or any indenture supplemental thereto so to
be; provided, however, that if, upon the happening of a completed default, as specified in Section
1 of Article XI of the Original Indenture, the Trustee or any receiver appointed hereunder shall
enter upon and take possession of the mortgaged property, the Trustee or any such receiver may, to
the extent permitted by law, at the same time likewise take possession of any and all of the
property described in this paragraph then on hand and any and all other property of the Company
then on hand, not described or referred to in the foregoing granting clauses, which is used or
useful in connection with the business of the Company as a water company or as a water utility, and
use and

 

13

 

administer the same to the same extent as if such property were part of the mortgaged
property, unless and until such completed default shall be remedied or waived and possession of the
mortgaged property restored to the Company, its successors or assigns.

SUBJECT, HOWEVER, to the exceptions, reservations and matters hereinabove and in the Original
Indenture recited, to releases executed since the date of the Original Indenture in accordance with
the provisions thereof, to existing leases, to easements and rights of way for pole lines and
electric transmission lines and other similar encumbrances and restrictions which the Company
hereby certifies, in its judgment, do not impair the use of said property by the Company in its
business, to liens existing on or claims against, and rights in and relating to, real estate
acquired for right-of-way purposes, to taxes and assessments not delinquent, to alleys, streets and
highways that may run across or encroach upon said lands, to liens, if any, incidental to
construction, and to Permitted Liens, as defined in the Original Indenture; and, with respect to
any property which the Company may hereafter acquire, to all terms, conditions, agreements,
covenants, exceptions and reservations expressed or provided in such deeds and other instruments,
respectively, under and by virtue of which the Company shall hereafter acquire the same and to any
and all liens existing thereon at the time of such acquisition.

TO HAVE AND TO HOLD, all and singular the property, rights, privileges and franchises hereby
conveyed, transferred or pledged or intended so to be unto the Trustee and its successors in the
trust heretofore and hereby created, and its and their assigns forever.

IN TRUST NEVERTHELESS, for the equal pro rata benefit and security of each and every entity
who may be or become the holders of bonds and coupons secured by the Original Indenture or by any
indenture supplemental thereto, or both, without preference, priority or distinction as to lien or
otherwise of any bond or coupon over or from any other bond or coupon, so that each and every of
said bonds and coupons issued or to be issued, of whatsoever series, shall have the same right,
lien and privilege under the Original Indenture and all indentures supplemental thereto and shall
be equally secured hereby and thereby, with the same effect as if said bonds and coupons had all
been made, issued and negotiated simultaneously on the date thereof; subject, however, to the
provisions with reference to extended, transferred or pledged coupons and claims for interest
contained in the Original Indenture and subject to any sinking or improvement fund or maintenance
deposit provisions, or both, for the benefit of any particular series of bonds.

IT IS HEREBY COVENANTED, DECLARED AND AGREED, by and between the parties hereto, that all such
bonds and coupons are to be authenticated, delivered and issued, and that all property subject or
to become subject hereto is to be held subject to the further covenants, conditions, uses and
trusts hereinafter set forth, and the Company, for itself and its successors and assigns, does
hereby covenant and agree to and with the Trustee and its successor or successors in said trust,
for the benefit of those who shall hold said bonds and coupons, or any of them, issued under this
Indenture or any indenture supplemental hereto, or both, as follows:

 

14

 

ARTICLE I.

Form, Authentication and Delivery of the Bonds; Redemption Provisions

SECTION 1. There shall be a fifty-fifth series of bonds, limited in aggregate principal amount
to $58,000,000 designated as “Aqua Pennsylvania, Inc., First Mortgage Bonds, 5.00% Series due
2039”.

Interest on the Bonds shall be payable semiannually on April 1 and October 1 of each year
(each an “interest payment date”), commencing October 1, 2009. Each Bond shall be dated the date of
its authentication and shall bear interest from the interest payment date next preceding the date
of the authentication of such Bond (or if such Bond is authenticated after a Record Date as defined
below and on or before the succeeding interest payment date, from such succeeding interest payment
date, or if such Bond is authenticated on or prior to the record date for the first interest
payment date for the Bonds, in which case it shall bear interest from the date of original issuance
of the Bonds); provided, however, that, if at the time of authentication of any Bond, interest on
the predecessor Bond of such Bond is in default, such Bond shall bear interest from the date to
which interest has been paid, or, if no interest has been paid, from the date of original issuance
thereof. The 5.00% Series due 2039 shall be stated to mature (subject to the right of earlier
redemption at the prices and dates and upon the terms and conditions hereinafter set forth) on
October 1, 2039 and shall bear interest at the rate of 5.00%. In any case where the date of payment
of the principal of or interest on the Bonds, or the date fixed for redemption of any Bond, is not
a Business Day, then payment of the principal or Redemption Price of and interest on such Bond need
not be made on such date but may be made on the next succeeding Business Day with the same force
and effect as if made on the due date of such payment or the date fixed for redemption, and no
interest shall accrue for the period after such date.

The Bonds of each series shall be issuable only as registered bonds without coupons, shall be
in the form hereinabove recited, in the denomination of Five Thousand Dollars ($5,000) or any
integral multiple thereof, shall be lettered “R-1” and shall bear such numbers as the Company may
reasonably require.

The principal of, and interest on the Bonds shall be payable at the designated office of the
trustee in Philadelphia, Pennsylvania, and shall be payable, along with interest on the Bonds, in
such coin or currency of the United States of America as at the time of payment is legal tender for
the payment of public and private debts; each installment of interest shall be paid by check to the
order of the person entitled thereto, mailed to such person’s address as the same appears on the
books maintained for such purpose by or on behalf of the Company, or by bank wire transfer of
immediately available funds pursuant to instructions and conditions incorporated in an agreement
between such person and the Trustee or the Company.

The person in whose name any Bond is registered at the close of business on any Record Date
(as hereinafter defined) with respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date notwithstanding the cancellation of such Bond upon
any transfer or exchange subsequent to the Record Date and prior to such interest payment date;
provided, however, that if and to the extent the Company shall default in

 

15

 

the payment of the interest due on such interest payment date, such defaulted interest shall
be paid to the persons in whose names outstanding Bonds are registered at the close of business on
a subsequent Record Date established by notice given by mail by or on behalf of the Company to the
holders of Bonds not less than fifteen days preceding such subsequent Record Date, such Record Date
to be not less than ten days preceding the date of payment of such defaulted interest. The term
“Record Date” with respect to any regular interest payment date shall mean the fifteenth day of the
calendar month next preceding the month in which such interest payment date occurs.

The Bonds are being issued by the Company to secure the obligation of the Company to pay to or
for the account of the Authority an amount equal to the principal of, at maturity or earlier
redemption, and interest on, the Authority Bonds pursuant to the Financing Agreement. The Authority
Bonds are being sold to finance the Facilities.

The Authority Bonds are to be issued under the Authority Indenture and the right, title and
interest of the Authority in and to the Financing Agreement and the payments thereunder and the
security for such payments have been assigned by the Authority to the Authority Trustee, and the
Bonds are to be delivered by the Company on behalf of the Authority directly to the Authority
Trustee, as assignee, as security for the payment of the principal of, at maturity or earlier
redemption, and premium, if any, and interest on, the Authority Bonds. The Authority Trustee may
not sell, assign or otherwise transfer the Bonds except for a transfer of the entire outstanding
principal amount thereof to its successor as Trustee under the Authority Indenture, which successor
and each subsequent successor shall hold the Bonds subject to the same restriction on transfer.

The text of the Bonds and of the certificate of the Trustee upon such Bonds shall be,
respectively, substantially of the tenor and effect hereinbefore recited.

Exchange of any Bonds shall be effected in accordance with the applicable provisions of
Sections 7, 8 and 9 of Article II of the Original Indenture.

SECTION 2. The Bonds are redeemable only as follows:

(a) The Bonds are subject to redemption prior to maturity on or after October 1, 2019 by the
Company, to the extent that the Authority Bonds are called for redemption under Section 7.01(a)(i)
of the Authority Indenture, and then out of moneys deposited with or held by the Trustee for such
purpose, as a whole or in part, at any time in the manner described below, at the redemption price
of one hundred percent (100%) of the principal amount to be redeemed, plus interest accrued thereon
to the date fixed for redemption;

(b) The Bonds are subject to redemption at the direction of the Company, in whole, at any time
prior to maturity, at a redemption price of 100% of the principal amount to be redeemed, plus
interest accrued thereon to the date fixed for redemption, at any time the Authority Bonds maturing
October 1, 2039 are subject to extraordinary optional redemption pursuant to Section 7.01(a)(ii) of
the Authority Indenture;

(c) The Bonds are also subject to special mandatory redemption at the direction of the
Company, in part, prior to maturity, at a redemption price of 100% of the principal amount of the

 

16

 

bonds to be redeemed, plus interest accrued thereon to the date fixed for redemption, at such
time and in such amount as the Authority Bonds maturing October 1, 2039 are subject to special
mandatory redemption pursuant to Section 7.01(a)(iii) of the Authority Indenture.

(d) The Bonds are also subject to mandatory redemption by the Company in whole if the Trustee
shall receive a written demand from the Authority Trustee for redemption of all such Bonds held by
the Authority Trustee stating that an “Event of Default” as defined in Section 9.01(a) of the
Authority Indenture has occurred and is continuing and that payment of the principal of the
Authority Bonds has been accelerated pursuant to Section 9.01(b) of the Authority Indenture,
provided that at the time of notice of such redemption as provided in Section 2 of Article V of the
Original Indenture (i) said written demand shall not have been withdrawn by the Authority Trustee,
and (ii) no event of default under Section 1 of Article XI of the Original Indenture shall have
occurred and be continuing.

SECTION 3. Any redemption of the Bonds shall be effected in accordance with the provisions of
Article V of the Original Indenture.

SECTION 4. In the event any Authority Bonds shall be purchased by the Company, surrendered by
the Company to the Authority Trustee for cancellation and cancelled by the Authority Trustee, Bonds
corresponding in principal amount to the Authority Bonds so purchased, surrendered and cancelled
shall be deemed to have been paid in full.

SECTION 5. In the event and to the extent the principal of and premium, if any, or interest
on, any Authority Bonds is paid out of funds held by the Authority Trustee other than payments of
Bonds, the corresponding payment of the principal of, and premium, if any, or interest on, an
aggregate principal amount of Bonds equal to the aggregate principal amount of such Authority Bonds
shall be deemed to have been satisfied.

SECTION 6. All Bonds deemed to have been paid in full as provided in Section 4 and 5 of this
Article I of this Forty-fourth Supplemental Indenture shall be surrendered to the Trustee for
cancellation, and the Trustee shall forthwith cancel the same and, in accordance with applicable
laws and regulations and the Trustee’s policies and procedures, and on the written request of the
Company, deliver the same to the Company. In case part of an outstanding Bond shall be deemed to
have been partially paid as provided in said Section 4 or Section 5, upon presentation of such Bond
at the designated office of the Trustee, the Trustee shall make a notation thereon of the payment
of the portion of the principal amount of such Bond so deemed to have been paid unless the
registered owner shall elect to surrender such Bond to the Trustee, in which case the Company shall
execute and the Trustee shall authenticate and deliver, without charge to the registered owner,
Bonds in such authorized denominations as shall be specified by the registered owner for the unpaid
balance of the principal amount of such outstanding Bond.

SECTION 7. The 5.00% Series due 2039 in the aggregate principal amount of $58,000,000 may be
issued under the provisions of Article IV of the Original Indenture and may forthwith be executed
by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered
to or upon the order of the Company, upon receipt by the Trustee of the resolutions, certificates,
opinions or other instruments or all of the foregoing required to be delivered upon the issue of
bonds pursuant to the provisions of the Original Indenture.

 

17

 

ARTICLE II.

Maintenance or Improvement Deposit.

SECTION 1. The Company covenants that it will deposit with the Trustee on or before the March
1 next occurring after the bonds of the bonds of the 9.93% Series due 2013 cease to be outstanding,
or on or before the next March 1 next occurring after the bonds of the 9.97% Series due 2018 cease
to be outstanding, or on or before the March 1 next occurring after the bonds of the 9.12% Series
due 2010 cease to be outstanding, or on or before the March 1 next occurring after the bonds of the
9.29% Series due 2026 cease to be outstanding, or on or before the March 1 next occurring after the
bonds of the 9.17% Series due 2021 cease to be outstanding, or on or before the next March 1 next
occurring after the bonds of the 9.17% Series due 2011 cease to be outstanding, or on or before the
March 1 next occurring after the bonds of any of the Subseries of the 1995 Medium Term Note Series
issued under the Twenty-Ninth Supplemental Indenture (consisting of the 7.72% Subseries A due 2025
and the 6.89% Subseries C due 2015) shall cease to be outstanding, or on or before March 1 next
occurring after the bonds of 6.00% Series due 2029 cease to be outstanding, or on or before March 1
next occurring after the bonds of any of the Subseries of the 1999 Medium Term Note Series issued
under the Thirty-Third Supplemental Indenture (consisting of the 6.21% Series due 2011, the 9.53%
Subseries D due 2019, the 8.26% Subseries F due 2022, the 8.32% Subseries I due 2022, the 8.14%
Subseries J due 2025, the 6.00% Subseries K due 2030, the 5.93% Subseries L due 2012, the 5.08%
Subseries O due 2015, the 5.17% Subseries P due 2017, the 5.751% Subseries Q due 2019, the 5.751%
Subseries R due 2019, the 6.06% Subseries S due 2027, the 6.06% Subseries T due 2027 and the 5.98%
Subseries U due 2028) cease to be outstanding, or on or before March 1 next occurring after the
bonds of the 5.35% Series due 2031 cease to be outstanding, or on or before March 1 next occurring
after the bonds of the 5.55% Series due 2032 cease to be outstanding, or on or before March 1 next
occurring after the bonds of the 3.75% Series due 2010 cease to be outstanding, or on or before
March 1 next occurring after the bonds of the 5.15% Series due 2032 cease to be outstanding, or on
or before March 1 next occurring after the bonds of the 5.05% Series due 2039 cease to be
outstanding, or on or before March 1 next occurring after the bonds of the 5.00% Series due 2036
cease to be outstanding, or on or before March 1 next occurring after the bonds of the 5.00% Series
due 2037 cease to be outstanding, or on or before March 1 next occurring after the bonds of the
5.00% Series due 2038 cease to be outstanding, or on or before March 1 next occurring after the
bonds of the 5.00% Series due 2035 cease to be outstanding, or on or before March 1 next occurring
after the bonds of the 5.00% Series due 2040 cease to be outstanding, or on or before March 1 next
occurring after the bonds of the 5.00% Series due 2041 cease to be outstanding, or on or before
March 1 next occurring after the bonds of the 5.25% Series due 2042 cease to be outstanding, or on
or before March 1 next occurring after the bonds of the 5.25% Series due 2043 cease to be
outstanding, or on or before March 1 next occurring after the bonds of the 6.25% Series due 2017
cease to be outstanding, or on or before March 1 next occurring after the bonds of the 6.75% Series
due 2018 cease to be outstanding whichever is latest, an amount in cash (the “Maintenance or
Improvement Deposit”) equal to 9% of the Gross Operating Revenues of the Company during the
preceding calendar year less, to the extent that the Company desires to take such credits, the
following:

(a) the amount actually expended for maintenance during such calendar year; and

 

18

 

(b) the Cost or Fair Value, whichever is less, of Permanent Additions acquired during such
calendar year which at the time of taking such credit constitute Available Permanent Additions; and

(c) the unapplied balance, or any part thereof, of the Cost or Fair Value, whichever is less,
of Available Permanent Additions acquired by the Company during the five calendar years preceding
such calendar year and specified in the Officers’ Certificates delivered to the Trustee pursuant to
Section 2 of this Article, but only to the extent that the Permanent Additions with respect to
which such Cost or Fair Value was determined shall at the time of taking such credit constitute
Available Permanent Additions.

SECTION 2. The Company covenants that it will on or before March 1 in each year, beginning
with the first deposit made with the Trustee under the provisions of Section 1 of this Article, as
long as any of the Bonds are outstanding, deliver to the Trustee the following:

(a) An Officers’ Certificate, which shall state:

(i) The amount of the Gross Operating Revenues for the preceding calendar year;

(ii) 9% of such Gross Operating Revenues;

(iii) The amount actually expended by the Company for maintenance during such calendar
year;

(iv) The amount set forth in subparagraph (xii) of each Officers’ Certificate delivered
to the Trustee pursuant to the provisions of this Section during the preceding five calendar
years (specifying each such Officers’ Certificate), after deducting from each such amount
the aggregate of (a) the Cost or Fair Value, whichever is less, of all Permanent Additions
represented by such amount which have ceased to be Available Permanent Additions; and (b)
any part of such amount for which the Company has previously taken credit against any
Maintenance or Improvement Deposit (specifying the Officers’ Certificate in which such
credit was taken); and (c) any part of such amount for which the Company then desires to
take credit against the Maintenance or Improvement Deposit;

(v) An amount which shall be the aggregate of all amounts set forth pursuant to the
provisions of clause (c) of the foregoing subparagraph (iv);

(vi) The Cost or Fair Value, whichever is less, of Available Permanent Additions
acquired by the Company during the preceding calendar year;

(vii) That part of the amount set forth in subparagraph (vi) which the Company desires
to use as a credit against the Maintenance or Improvement Deposit;

(viii) The amount of cash payable to the Trustee under the provisions of Section 1 of
this Article, which shall be the amount by which the amount set forth in

 

19

 

subparagraph (ii) hereof exceeds the sum of the amounts set forth in subparagraphs
(iii), (v) and (vii) hereof;

(ix) The sum of all amounts charged on the books of the Company against any reserve for
retirement or depreciation during the preceding calendar year representing the aggregate of
the Cost when acquired of any part of the Company’s plants and property of the character
described in the granting clauses hereof which has been permanently retired or abandoned;

(x) The aggregate of the amounts set forth in subparagraphs (v) and (vii) hereof;

(xi) The amount by which the amount set forth in subparagraph (x) exceeds the amount
set forth in subparagraph (ix), being the amount required to be deducted from the Cost or
Fair Value of Available Permanent Additions in order to determine a Net Amount of Available
Permanent Additions pursuant to the provisions of Section 9 of Article I of the Original
Indenture;

(xii) The amount set forth in subparagraph (vi) after deducting the amount, if any, set
forth in subparagraph (vii); and

(xiii) That all conditions precedent to the taking of the credit or credits so
requested by the Company have been complied with.

(b) In the event that the Officers’ Certificate delivered to the Trustee pursuant to the
provisions of paragraph (a) of this Section shall state, pursuant to the requirements of
subparagraph (vi), the Cost or Fair Value of Available Permanent Additions acquired by the Company
during the preceding calendar year, the documents specified in paragraphs 2, 3, 5, 6 and 7 of
subdivision (B) of Section 3 of Article IV of the Original Indenture.

(c) An amount in cash equal to the sum set forth in subparagraph (viii) of the Officers’
Certificate provided for in paragraph (a) hereof.

SECTION 3. All cash deposited with the Trustee as part of any Maintenance or Improvement
Deposit provided for in Section 1 of this Article, may, at the option of the Company, be applied to
the purchase of bonds under the provisions of Section 2 of Article X of the Original Indenture or
to the redemption of bonds under the provisions of Section 3 of Article X of the Original Indenture
or may be withdrawn by the Company at any time to reimburse the Company for the cost of a Net
Amount of Available Permanent Additions (excluding, however, from any such Available Permanent
Additions all Permanent Additions included in any certificate delivered to the Trustee for the
purpose of obtaining a credit against any Maintenance or Improvement Deposit provided for in
Section 1 of this Article to the extent that such Permanent Additions have been used for any such
credit). The Trustee shall pay to or upon the written order of the Company all or any part of such
cash upon the receipt by the Trustee of:

(a) A Resolution requesting such payment; and

 

20

 

(b) The documents specified in paragraphs 2, 5, 6 and 7 of subdivision (B) of Section 3 of
Article IV of the Original Indenture, with such modifications, additions and omissions as may be
appropriate in the light of the purposes for which they are used.

ARTICLE III.

Covenants of the Company.

SECTION 1. The Company hereby covenants and agrees with the Trustee, for the benefit of the
Trustee and all the present and future holders of the Bonds, that the Company will pay the
principal of, and premium, if any, and interest on, all bonds issued or to be issued as aforesaid
under and secured by the Original Indenture as hereby supplemented, as well as all bonds which may
be hereafter issued in exchange or substitution therefor, and will perform and fulfill all of the
terms, covenants and conditions of the Original Indenture and of this Forty-fourth Supplemental
Indenture with respect to the additional bonds to be issued under the Original Indenture as hereby
supplemented.

SECTION 2. The Company covenants and agrees that so long as any of the Bonds are outstanding
(a) the Company will not make any Stock Payment if, after giving effect thereto, its retained
earnings, computed in accordance with generally accepted accounting principles consistently
applied, will be less than the sum of (i) Excluded Earnings, if any, since December 31, 2008, and
(ii) $20,000,000; (b) Stock Payments made more than 40 days after the commencement, and prior to
the expiration, of any Restricted Period shall not exceed 65% of the Company’s Net Income during
such Restricted Period; and (c) the Company will not authorize a Stock Payment if there has
occurred and is continuing an event of default under subsections (a) and (b) of Section 1 of
Article XI of the Original Indenture.

For the purposes of this Section 2 the following terms shall have the following meanings:

“Capitalization” shall mean the sum of (i) the aggregate principal amount of all Debt at the
time outstanding, (ii) the aggregate par or stated value of all capital stock of the Company of all
classes at the time outstanding, (iii) premium on capital stock, (iv) capital surplus, and (v)
retained earnings.

“Debt” means (i) all indebtedness, whether or not represented by bonds, debentures, notes or
other securities, for the repayment of money borrowed, (ii) all deferred indebtedness for the
payment of the purchase price of property or assets purchased (but Debt shall not be deemed to
include customer advances for construction or any bonds issued under the Indenture which are not
Outstanding Bonds), (iii) leases which have been or, in accordance with generally accepted
accounting principles, should be recorded as capital leases and (iv) guarantees of the obligations
of another of the nature described in clauses (i), (ii) or (iii) which have been or, in accordance
with generally accepted accounting principles, should be recorded as debt.

“Determination Date” shall mean the last day of each calendar quarter. Any calculation with
respect to any Determination Date shall be based on the Company’s balance sheet as of such date.

 

21

 

“Excluded Earnings” shall mean 35% of the Company’s Net Income during any Restricted Period.

“Net Income” for any particular Restricted Period shall mean the amount of net income properly
attributable to the conduct of the business of the Company for such period, as determined in
accordance with generally accepted accounting principles consistently applied, after payment of or
provision for taxes on income for such period.

“Outstanding Bonds” shall mean bonds which are outstanding within the meaning indicated in
Section 20 of Article I of the Original Indenture except that, in addition to the bonds referred to
in clauses (a), (b) and (c) of said Section 20, said term shall not include bonds for the
retirement of which sufficient funds have been deposited with the Trustee with irrevocable
instructions to apply such funds to the retirement of such bonds at a specified time, which may be
either the maturity thereof or a specified redemption date, whether or not notice of redemption
shall have been given.

“Restricted Period” shall mean a period commencing on any Determination Date on which the
total Debt of the Company is, or as the result of any Stock Payment then declared or set aside and
to be made thereafter will be, more than 70% of Capitalization, and continuing until the third
consecutive Determination Date on which the total Debt of the Company does not exceed 70% of
Capitalization.

“Stock Payment” shall mean any payment in cash or property (other than stock of the Company)
to any holder of shares of any class of capital stock of the Company as such holder, whether by
dividend or upon the purchase, redemption, conversion or other acquisition of such shares, or
otherwise.

SECTION 3. The Company covenants and agrees that so long as any of the Bonds are outstanding,
neither the Company nor any subsidiary of the Company will, directly or indirectly, lend or in any
manner extend its credit to, or indemnify, or make any donation or capital contribution to, or
purchase any security of, any corporation which directly or indirectly controls the Company, or any
subsidiary or affiliate (other than an affiliate which is a subsidiary of the Company) of any such
corporation.

ARTICLE IV.

The Trustee.

SECTION 1. The Trustee hereby accepts the trust hereby declared and provided, and agrees to
perform the same upon the terms and conditions in the Original Indenture, as supplemented by this
Forty-fourth Supplemental Indenture.

SECTION 2. Subject to the provisions of Article XIII of the Original Indenture, the Trustee
may execute any of the trusts or powers hereof and perform any of its duties by or through and
consult with attorneys, agents, officers or employees selected by the Trustee in its sole
discretion. The Trustee shall be entitled to advice of counsel concerning all matters of trusts
hereof and the duties hereunder and may in all cases pay such reasonable compensation to all such
attorneys, agents, officers and employees as may reasonably be employed in connection with the
trusts hereof. The Trustee may act or refrain from acting and rely upon and be free from

 

22

 

all liability for so relying upon the opinion or advice of any attorney (who may be the
attorney or attorneys for the Company). The Trustee may act and rely on written opinions of experts
employed by the Trustee and such advice shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by the Trustee hereunder in good faith and in
reliance thereon. The Trustee shall not be responsible for any loss or damage resulting from any
action or non-action in good faith taken in reliance upon such opinion or advice. The Trustee shall
not be bound to confirm, verify or make any investigation into the facts or matters stated in any
financial or other statements, resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order or other paper or document furnished pursuant to the
terms hereof.

SECTION 3. Before the Trustee shall be required to foreclose on, or to take control or
possession of, the real property or leasehold interest (the “Premises”) which may be the subject of
any mortgage or mortgages for which the Trustee is mortgagee in connection with the issuance of the
Bonds, the Trustee shall be indemnified and held harmless by the holders and/or beneficial owners
of the Bonds from and against any and all expense, loss, or liability that may be suffered by the
Trustee in connection with any spill, leak or release which may have occurred on or invaded the
Premises or any contamination by any Hazardous Substance (hereinafter defined), whether caused by
the Company or any other person or entity, including, but not limited to, (1) any and all
reasonable expenses that the Trustee may incur in complying with any of the Environmental Statutes
(hereinafter defined), (2) any and all reasonable costs that the Trustee may incur in studying or
remedying any spill, leak or release which may have occurred on or invaded the Premises or any
contamination, (3) any and all fines or penalties assessed upon the Trustee by reason of such
contamination, (4) any and all loss of value of the Premises or the improvements thereon by reason
of such contamination, and (5) any and all legal fees and costs reasonably incurred by the Trustee
in connection with any of the foregoing. As used in this Section, contamination by any Hazardous
Substance shall include contamination, arising from the presence, creation, production, collection,
treatment, disposal, discharge, release, storage, transport or transfer of any Hazardous Substance
at or from the Premises or any improvements thereon. As used in this Section, the term “Hazardous
Substance” shall mean petroleum hydrocarbons or any substance which (a) constitutes a hazardous
waste or substance under any applicable federal, state or local law, rule, order or regulation now
or hereafter adopted; (b) constitutes a “hazardous substance” as such term is defined under the
Comprehensive Environmental Response, Compensation and Liability Act, as amended (42 U.S.C. §9601
et seq.) and the regulations issued thereunder and any comparable state or local law or
regulation; (c) constitutes a “hazardous waste” under the Resource Conservation and Recovery Act,
(42 U.S.C. §6991) and the regulations issued thereunder and any comparable state or local law or
regulation; (d) constitutes a pollutant, contaminant, chemical or industrial, toxic or hazardous
substance or waste as such terms are defined under Federal Clean Water Act, as amended (33 U.S.C.
§1251 et seq.), the Toxic Substances Control Act, as amended (15 U.S.C. §2601 et seq.), or any
comparable state or local laws or regulations; (e) exhibits any of the characteristics enumerated
in 40 C.F.R. Sections 261.20 — 261.24, inclusive; (f) those extremely hazardous substances listed
in Section 302 of the Superfund Amendments and Reauthorization Act of 1986 (Public Law 99-499, 100
Stat. 1613) which are present in threshold planning or reportable quantities as defined under such
act; (g) toxic or hazardous chemical substances which are present in quantities which exceed
exposure standards as those terms are defined under Sections 6 and 8 of the Occupational Safety and
Health Act, as amended (29 U.S.C. §§655 and

 

23

 

657 and 29 C.F.R. Part 1910, subpart 2); and (h) any asbestos, petroleum-based products or any
Hazardous Substance contained within or release from any underground or aboveground storage tanks.
As used in this Section, the term “Environmental Statutes” shall mean the statutes, laws, rules,
orders and regulations referred to in (a) through (g) inclusive in the preceding sentence.

ARTICLE V.

Miscellaneous.

SECTION 1. This instrument is executed and shall be construed as an indenture supplemental to
the Original Indenture, and shall form a part thereof, and except as hereby supplemented, the
Original Indenture and the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth,
Tenth, Eleventh, Twelfth, Thirteenth, Fourteenth, Fifteenth, Sixteenth, Seventeenth, Eighteenth,
Nineteenth, Twentieth, Twenty-First, Twenty-Second, Twenty-Third, Twenty-Fourth, Twenty-Fifth,
Twenty-Sixth, Twenty-Seventh, Twenty-Eighth, Twenty-Ninth, Thirtieth, Thirty-First, Thirty-Second,
Thirty-Third, Thirty-Fourth, Thirty-Fifth, Thirty-Sixth, Thirty-Seventh, Thirty-Eighth,
Thirty-Ninth, Fortieth, Forty-first, Forty-second and Forty-third Supplemental Indentures are
hereby confirmed. All references in this Forty-fourth Supplemental Indenture to the Original
Indenture shall be deemed to refer to the Original Indenture as heretofore amended and
supplemented, and all terms used herein and not specifically defined herein shall be taken to have
the same meaning as in the Original Indenture, as so amended, except in the cases where the context
clearly indicates otherwise.

SECTION 2. Any notices to the Trustee under this Forty-fourth Supplemental Indenture shall be
delivered to the Trustee by registered or certified mail, hand delivery or other courier or express
delivery service (with receipt confirmed) or by telecopy (with receipt confirmed) at the following
address:

The Bank of New York Mellon Trust Company, N. A.

Global Corporate Trust

1600 Market Street, Suite 1500

Philadelphia, PA 19103

Attention: Philip Newmuis

Phone: 215-640-8455

Fax: 215-9981-0316/0352

Any change in such address or telecopy number may be made by notice to the Company delivered in the
manner set forth above.

SECTION 3. All recitals in this Forty-fourth Supplemental Indenture are made by the Company
only and not by the Trustee; and all of the provisions contained in the Original Indenture in
respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable
in respect hereof as fully and with like effect as if set forth herein in full.

SECTION 4. Although this Forty-fourth Supplemental Indenture is dated as of July 1, 2009 for
convenience and for the purpose of reference, the actual date or dates of execution hereof by the
Company and the Trustee are as indicated by their respective acknowledgments annexed hereto.

 

24

 

SECTION 5. In order to facilitate the recording or filing of this Forty-fourth Supplemental
Indenture, the same may be simultaneously executed in several counterparts, each of which shall be
deemed to be an original and such counterparts shall together constitute but one and the same
instrument.

SECTION 6. This Forty-fourth Supplemental Indenture shall become effective upon delivery to
the Trustee by the Company of the certificates required by Articles IV, VI and VII of the Original
Indenture, which shall occur concurrently with the issuance of the 5.00% Series due 2039 on July
16, 2009

 

25

 

IN WITNESS WHEREOF the parties hereto have caused their corporate seals to be hereunto affixed
and their authorized officers have hereto affixed their signatures, and their authorized officers
have duly attested the execution hereof, as of the day first above written.

	 	 	 	 	 	 	 
	[CORPORATE SEAL]	 	 	 	AQUA PENNSYLVANIA, INC.,
	 

	 	 	 	 	 	as successor by merger to
	 

	 	 	 	 	 	Philadelphia Suburban Water Company
	 
	 	 	 	 	 	 
	Attest:

	 	Robert A. Rubin
	 	By:
	 	Stephen Anzaldo
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Treasurer
	 
	 	 	 	 	 	 
	[CORPORATE SEAL]	 	 	 	THE BANK OF NEW YORK
	 

	 	 	 	 	 	MELLON TRUST COMPANY, N. A.,
	 

	 	 	 	 	 	as Trustee
	 
	 	 	 	 	 	 
	Attest:

	 	Michael L. Shelton
	 	By:
	 	Philip S. Newmuis
	 

	 	 	 	 	 	 
	 

	 	Authorized Officer
	 	 	 	Name: Philip S. Newmuis
	 

	 	 	 	 	 	Title:   Authorized Signer

 

26

 

EXHIBIT A

OUTSTANDING FIRST MORTGAGE BONDS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Interest	 	 	Issue	 	 	Maturity	 	 	Original	 	 	Balance (incl. CP)	 
	Division	 	Structure	 	Rate	 	 	Date	 	 	Date	 	 	Amount	 	 	@ 06/01/09	 
	Aqua Pa
	 	Tax Exempt	 	 	5.35	%	 	 	11/01/01	 	 	 	10/01/31	 	 	 	30,000,000	 	 	 	30,000,000	 
	Aqua Pa
	 	Tax Exempt	 	 	5.55	%	 	 	06/01/02	 	 	 	09/01/32	 	 	 	25,000,000	 	 	 	25,000,000	 
	Shenango
	 	Tax Exempt	 	 	6.00	%	 	 	10/01/99	 	 	 	06/01/29	 	 	 	25,000,000	 	 	 	25,000,000	 
	Aqua Pa
	 	Tax Exempt	 	 	6.00	%	 	 	06/28/00	 	 	 	07/01/30	 	 	 	18,360,000	 	 	 	18,360,000	 
	Roaring Creek
	 	Tax Exempt	 	 	5.05	%	 	 	11/30/04	 	 	 	10/01/39	 	 	 	14,000,000	 	 	 	14,000,000	 
	Aqua Pa
	 	Tax Exempt	 	 	3.75	%	 	 	12/31/02	 	 	 	06/01/10	 	 	 	3,200,000	 	 	 	400,000	 
	Aqua Pa
	 	Tax Exempt	 	 	5.15	%	 	 	06/26/02	 	 	 	09/01/32	 	 	 	25,000,000	 	 	 	25,000,000	 
	Aqua Pa
	 	Tax Exempt	 	 	5.00	%	 	 	05/19/05	 	 	 	11/01/36	 	 	 	21,770,000	 	 	 	21,770,000	 
	Aqua Pa
	 	Tax Exempt	 	 	5.00	%	 	 	05/19/05	 	 	 	11/01/37	 	 	 	24,165,000	 	 	 	24,165,000	 
	Aqua Pa
	 	Tax Exempt	 	 	5.00	%	 	 	05/19/05	 	 	 	11/01/38	 	 	 	25,375,000	 	 	 	25,375,000	 
	Aqua Pa
	 	Tax Exempt	 	 	5.00	%	 	 	12/28/06	 	 	 	02/01/35	 	 	 	24,675,000	 	 	 	24,675,000	 
	Aqua Pa
	 	Tax Exempt	 	 	5.00	%	 	 	01/16/07	 	 	 	02/01/40	 	 	 	23,915,000	 	 	 	23,915,000	 
	Aqua Pa
	 	Tax Exempt	 	 	5.00	%	 	 	01/16/07	 	 	 	02/01/41	 	 	 	23,915,000	 	 	 	23,915,000	 
	Aqua Pa
	 	Tax Exempt	 	 	5.25	%	 	 	12/20/07	 	 	 	07/01/42	 	 	 	24,830,000	 	 	 	24,830,000	 
	Aqua Pa
	 	Tax Exempt	 	 	5.25	%	 	 	12/20/07	 	 	 	07/01/43	 	 	 	24,830,000	 	 	 	24,830,000	 
	Aqua Pa
	 	Tax Exempt	 	 	6.25	%	 	 	12/18/08	 	 	 	10/01/17	 	 	 	9,000,000	 	 	 	9,000,000	 
	Aqua Pa
	 	Tax Exempt	 	 	6.75	%	 	 	12/18/08	 	 	 	10/01/18	 	 	 	13,000,000	 	 	 	13,000,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	356,035,000	 	 	 	353,235,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Aqua Pa
	 	Taxable	 	 	5.93	%	 	 	06/26/02	 	 	 	07/01/12	 	 	 	25,000,000	 	 	 	25,000,000	 
	Aqua Pa
	 	Taxable	 	 	6.21	%	 	 	10/25/01	 	 	 	11/01/11	 	 	 	15,000,000	 	 	 	15,000,000	 
	Aqua Pa
	 	Taxable	 	 	6.89	%	 	 	12/19/95	 	 	 	12/15/15	 	 	 	12,000,000	 	 	 	12,000,000	 
	Aqua Pa
	 	Taxable	 	 	7.72	%	 	 	05/19/95	 	 	 	05/15/25	 	 	 	15,000,000	 	 	 	15,000,000	 
	Shenango
	 	Taxable	 	 	8.14	%	 	 	11/01/95	 	 	 	11/01/25	 	 	 	4,000,000	 	 	 	4,000,000	 
	Susquehanna
	 	Taxable	 	 	8.26	%	 	 	11/01/92	 	 	 	11/01/22	 	 	 	1,500,000	 	 	 	1,500,000	 
	Shenango
	 	Taxable	 	 	8.32	%	 	 	11/01/92	 	 	 	11/01/22	 	 	 	3,500,000	 	 	 	3,500,000	 
	Aqua Pa
	 	Taxable	 	 	9.12	%	 	 	01/12/90	 	 	 	01/15/10	 	 	 	20,000,000	 	 	 	20,000,000	 
	Aqua Pa
	 	Taxable	 	 	9.17	%	 	 	11/01/91	 	 	 	09/15/21	 	 	 	8,000,000	 	 	 	5,200,000	 
	Aqua Pa
	 	Taxable	 	 	9.17	%	 	 	11/01/91	 	 	 	09/15/11	 	 	 	5,000,000	 	 	 	5,000,000	 
	Aqua Pa
	 	Taxable	 	 	9.29	%	 	 	11/01/91	 	 	 	09/15/26	 	 	 	12,000,000	 	 	 	12,000,000	 
	Roaring Creek
	 	Taxable	 	 	9.53	%	 	 	12/15/89	 	 	 	12/15/19	 	 	 	4,000,000	 	 	 	4,000,000	 
	Aqua Pa
	 	Taxable	 	 	9.93	%	 	 	06/01/88	 	 	 	06/01/13	 	 	 	5,000,000	 	 	 	5,000,000	 
	Aqua Pa
	 	Taxable	 	 	9.97	%	 	 	06/01/88	 	 	 	06/01/18	 	 	 	5,000,000	 	 	 	5,000,000	 
	Aqua Pa
	 	Taxable	 	 	5.08	%	 	 	05/10/04	 	 	 	05/15/15	 	 	 	20,000,000	 	 	 	20,000,000	 
	Aqua Pa
	 	Taxable	 	 	5.17	%	 	 	05/10/04	 	 	 	05/10/17	 	 	 	7,000,000	 	 	 	7,000,000	 
	Aqua Pa
	 	Taxable	 	 	5.751	%	 	 	05/10/04	 	 	 	05/15/19	 	 	 	15,000,000	 	 	 	15,000,000	 
	Aqua Pa
	 	Taxable	 	 	5.751	%	 	 	05/10/04	 	 	 	05/15/19	 	 	 	5,000,000	 	 	 	5,000,000	 
	Aqua Pa
	 	Taxable	 	 	6.06	%	 	 	05/10/04	 	 	 	05/10/27	 	 	 	15,000,000	 	 	 	15,000,000	 
	Aqua Pa
	 	Taxable	 	 	6.06	%	 	 	05/10/04	 	 	 	05/15/27	 	 	 	5,000,000	 	 	 	5,000,000	 
	Aqua Pa
	 	Taxable	 	 	5.98	%	 	 	05/10/04	 	 	 	05/15/28	 	 	 	3,000,000	 	 	 	3,000,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	205,000,000	 	 	 	202,200,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	TOTAL FIRST MORTGAGE BONDS	 	 	 	 	 	 	561,035,000	 	 	 	555,435,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

27

 

EXHIBIT B

RECORDING INFORMATION

BUCKS, CHESTER, DELAWARE AND MONTGOMERY COUNTIES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Bucks	 	Chester	 	Delaware	 	Montgomery
	Indenture	 	Date
of
 Recording	 	Book	 	Page	 	Book	 	Page	 	Book	 	Page	 	Book	 	Page
	Original
	 	2/20/41	 	496	 	1	 	 H-13.Vol.307 	 	20	 	1034	 	1	 	1625	 	1
	First Supplemental
	 	8/26/48	 	632	 	1	 	F-16.Vol.380	 	200	 	1668	 	169	 	2031	 	257
	Second Supplemental
	 	7/1/52	 	768	 	438	 	18.Vol.425	 	186	 	1962	 	376	 	2360	 	517
	Third Supplemental
	 	11/25/53	 	895	 	1	 	18.Vol.442	 	325	 	2052	 	1	 	2493	 	1
	Fourth Supplemental
	 	1/9/56	 	1089	 	155	 	Z-20.Vol.499	 	1	 	2199	 	1	 	2722	 	425
	Fifth Supplemental
	 	3/20/57	 	1181	 	316	 	B-22.Vol.536	 	601	 	2294	 	50	 	2850	 	335
	Sixth Supplemental
	 	5/9/58	 	1254	 	1	 	G-23	 	201	 	2380	 	039	 	2952	 	289
	Seventh Supplemental
	 	9/25/59	 	1332	 	509	 	B-25	 	109	 	2442	 	1	 	3090	 	249
	Eighth Supplemental
	 	5/9/61	 	—	 	—	 	Z-26	 	17	 	2526	 	312	 	—	 	—
	Eighth Supplemental
	 	5/10/61	 	1409	 	225	 	—	 	—	 	—	 	—	 	3249	 	289
	Ninth Supplemental
	 	4/10/62	 	1458	 	372	 	G-28	 	126	 	2581	 	463	 	3307	 	169
	Tenth Supplemental
	 	3/19/64	 	1568	 	1	 	M-30	 	967	 	2976	 	1043	 	3310	 	237
	Eleventh Supplemental
	 	11/4/66	 	1655	 	695	 	Q-32	 	6682	 	762	 	223	 	3549	 	129
	Twelfth Supplemental
	 	1/23/68	 	1691	 	531	 	N-33	 	219	 	2792	 	708	 	3542	 	315
	Thirteenth
Supplemental
	 	7/2/70	 	1763	 	1167	 	D-35	 	80	 	2850	 	301	 	3687	 	23
	Fourteenth
Supplemental
	 	11/5/70	 	1774	 	331	 	K-35	 	713	 	2858	 	3113	 	700	 	548
	Fifteenth Supplemental
	 	12/11/72	 	1869	 	196	 	O-37	 	998	 	2926	 	550	 	3786	 	96
	Sixteenth Supplemental
	 	5/28/75	 	1979	 	14	 	E-44	 	77	 	3005	 	511	 	4010	 	307
	Seventeenth
Supplemental       
	 	12/18/77	 	2072	 	683	 	L-51	 	1	 	3072	 	43	 	5002	 	436

 

28

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Bucks	 	Chester	 	Delaware	 	Montgomery
	Indenture	 	Date
of 
Recording	 	Book	 	Page	 	Book	 	Page	 	Book	 	Page	 	Book	 	Page
	Eighteenth
Supplemental
	 	4/29/77	 	2082	 	567	 	B-52	 	344	 	3078	 	728	 	5003	 	291
	Nineteenth
Supplemental
	 	6/23/80	 	2303	 	714	 	J-62	 	92	 	3261	 	293	 	5030	 	502
	Twentieth Supplemental
	 	8/2/83	 	2487	 	370	 	D-72	 	1	 	96	 	810	 	5662	 	1045
	Twenty-First
Supplemental
	 	8/27/85	 	2690	 	806	 	54	 	550	 	—	 	—	 	5864	 	1347
	Twenty-First
Supplemental
	 	8/28/85	 	—	 	—	 	—	 	—	 	264	 	159	 	—	 	—
	Twenty-Second
Supplemental
	 	4/22/86	 	2774	 	160	 	263	 	275	 	326	 	592	 	5944	 	360
	Twenty-Third
Supplemental
	 	4/1/87	 	2960	 	693	 	—	 	—	 	—	 	—	 	—	 	—
	Twenty-Third
Supplemental
	 	4/2/87	 	—	 	—	 	680	 	337	 	447	 	1807	 	6115	 	602
	Twenty-Fourth
Supplemental
	 	7/25/88	 	3199	 	1095	 	1224	 	389	 	0593	 	0585	 	6324	 	143
	Twenty-Fifth
Supplemental
	 	1/12/90	 	0136	 	0250	 	1848	 	205	 	731	 	1571	 	6538	 	376
	Twenty-Sixth
Supplemental
	 	11/8/91	 	369	 	2190	 	2660	 	205	 	894	 	2241	 	6780	 	891
	Twenty-Seventh
Supplemental
	 	6/29/92	 	0487	 	1829	 	3055	 	182	 	0969	 	2023	 	6918	 	302
	Twenty-Eighth
Supplemental
	 	4/22/93	 	0652	 	1335	 	3542	 	1542	 	1081	 	0852	 	7112	 	0539
	Twenty-Ninth
Supplemental
	 	3/30/95	 	1045	 	1872	 	3875	 	1368	 	1349	 	0829	 	7561	 	1155
	Thirtieth Supplemental
	 	8/30/95	 	1111	 	0798	 	3932	 	0471	 	1393	 	2255	 	7631	 	0689
	Thirty-First
Supplemental
	 	7/11/97	 	1421	 	2196	 	4201	 	2133	 	1607	 	138	 	7968	 	779
	Thirty-Second
Supplemental
	 	10/6/99	 	1939	 	421	 	4646	 	642	 	1936	 	1207	 	8548	 	1067
	Thirty-Third
Supplemental
	 	11/30/99	 	1970	 	1573	 	4675	 	1272	 	1936	 	1207	 	85898	 	317
	Thirty-Fourth
Supplemental      
	 	10/31/01	 	2471	 	1207	 	5101	 	2142	 	2288	 	0174	 	9225	 	761

 

29

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Bucks	 	Chester	 	Delaware	 	Montgomery
	Indenture	 	Date
of 
Recording	 	Book	 	Page	 	Book	 	Page	 	Book	 	Page	 	Book	 	Page
	Thirty-Fifth
Supplemental       
	 	1/10/02	 	2541	 	765	 	5152	 	818	 	2329	 	1019	 	9314	 	1079
	Thirty-Sixth
Supplemental
	 	6/5/02	 	2731	 	1881	 	5296	 	356	 	2448	 	1862	 	9593	 	1416
	Thirty-Seventh
	 	 	 	 	 	 	 	12/31/02	 	 	 	12/31/02	 	 	 	12/30/02	 	 
	Supplemental
	 	12/27/02	 	3036	 	1425	 	B-5514	 	1552	 	02631	 	0294	 	10018	 	0204
	Thirty-Eighth
	 	 	 	 	 	 	 	11/23/04	 	 	 	11/22/04	 	 	 	11/22/04	 	 
	Supplemental
	 	11/9/04	 	4196	 	1557	 	B-6342	 	800	 	B-3348	 	1698	 	B-00020	 	0237
	Thirty-Ninth
	 	 	 	 	 	1471	 	5/19/05	 	1375	 	 	 	0939	 	 	 	0688
	Supplemental
	 	5/18/05	 	4441	 	#2005066104	 	6496	 	#10534807	 	03487	 	32005044507	 	0020	 	2005069126
	Fortieth
	 	 	 	 	 	 	 	12/23/05	 	897	 	12/23/05	 	2206	 	12/29/05	 	 
	Supplemental
	 	12/27/05	 	4768	 	1853	 	6720	 	#10608829	 	03687	 	#2005123053	 	11689	 	1156
	Forty-first
	 	 	 	 	 	1290	 	1/12/07	 	820	 	1/11/07	 	 	 	1/30/07	 	00329
	Supplemental
	 	1/11/07	 	5250	 	#2007004610	 	7058	 	#10720615	 	04002	 	2257	 	0225	 	#2007005061
	Forty-second
	 	 	 	 	 	 	 	12/13/07	 	2091	 	12/13/07	 	1166	 	12/17/07	 	02498-02544
	Supplemental
	 	12/13/07	 	 	 	#2007119080	 	7326	 	#10809606	 	04262	 	#2007105884	 	12287	 	#2007147147
	Forty-third
	 	 	 	 	 	2131	 	12/08/08	 	1527	 	12/08/08	 	 	 	12/08/08	 	2585
	Supplemental
	 	12/08/08	 	5961	 	#2008099812	 	7556	 	#10889672	 	4466	 	1185	 	12504	 	#2008115955

 

30

 

BERKS COUNTY

	 	 	 	 	 	 	 
	Indenture	 	Date of Recording	 	Book	 	Page
	Original
	 	8/16/99	 	3113	 	707
	Thirty-Second Supplemental
	 	10/6/99	 	3132	 	1510
	Thirty-Third Supplemental
	 	11/30/99	 	3149	 	1260
	Thirty-Fourth Supplemental
	 	10/31/01	 	3421	 	896
	Thirty-Fifth Supplemental
	 	1/10/02	 	3461	 	417
	Thirty-Sixth Supplemental
	 	6/4/02	 	3544	 	1357
	Thirty-Seventh
Supplemental
	 	12/30/02	 	3664	 	0001
	Thirty-Eighth Supplemental
	 	11/30/04	 	4197	 	988
	Thirty-Ninth Supplemental
	 	5/18/05	 	04583	 	1017
	Fortieth Supplemental
	 	02/09/06	 	04782	 	1916
	Forty-first
Supplemental
	 	1/11/07	 	05054	 	0013
	Forty-second
	 	 	 	 	 	1398
	Supplemental
	 	12/13/07	 	05272	 	#2007073573
	Forty-third
Supplemental
	 	12/09/08	 	 	 	#200805825

 

31

 

BRADFORD, COLUMBIA, LAWRENCE, MERCER, NORTHUMBERLAND, PIKE, SCHUYLKILL AND WAYNE COUNTIES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	BRADFORD	 	COLUMBIA	 	LAWRENCE	 	MERCER
	 	 	Date of	 	 	 	Date of	 	 	 	Date of	 	 	 	 	 	Date of	 	 
	Indenture	 	Recording	 	Instrument No.	 	Recording	 	Instrument No.	 	Recording	 	Book	 	Page	 	Recording	 	Instrument No.
	Thirty-Fifth
Supplemental     
	 	12/21/01	 	200115497	 	 	 	 	 	 	 	1688	 	744	 	 	 	 
	Thirty-Sixth
Supplemental
	 	07/04/02	 	200207151	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Thirty-Seventh
Supplemental
	 	12/30/02	 	200216472	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Thirty-Eighth
Supplemental
	 	11/22/04	 	200415112	 	11/30/04	 	200413567	 	11/24/04	 	1992	 	0291	 	11/24/04	 	2004020435
	Thirty-Ninth
	 	 	 	 	 	 	 	 	 	 	 	 	 	200	 	 	 	 
	Supplemental
	 	5/16/05	 	200504827	 	5/18/05	 	200505042	 	5/16/2005	 	2032	 	#005488	 	5/13/05	 	2005-7340
	Fortieth
	 	 	 	 	 	 	 	 	 	 	 	 	 	0934	 	 	 	2005-
	Supplemental
	 	12/23/05	 	200594992	 	12/23/05	 	200513981	 	12/27/05	 	2088	 	#015325	 	12/27/05	 	00020320
	Forty-first
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2007-
	Supplemental
	 	1/12/07	 	200700440	 	1/17/07	 	200700636	 	1/11/07	 	2007	 	000466	 	1/12/07	 	00000583
	Forty-second
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2007
	Supplemental
	 	12/18/07	 	200714762	 	12/20/07	 	200712896	 	12/17/07	 	2007	 	013275	 	12/14/07	 	00016849
	Forty-third
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2008
	Supplemental
	 	12/10/08	 	200821178	 	12/11/08	 	200812596	 	12/12/08	 	2008	 	00014552	 	12/12/08	 	00014552

 

32

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	NORTHUMBERLAND	 	PIKE	 	SCHUYLKILL	 	WAYNE
	 	 	Date of	 	 	 	 	 	Date of	 	 	 	 	 	Date of	 	 	 	 	 	Date of	 	 	 	 
	Indenture	 	Rec.	 	Book	 	Page	 	Rec.	 	Book	 	Page	 	Rec.	 	Book	 	Page	 	Rec.	 	Book	 	Page
	Thirty-Fifth
Supplemental
	 	 	 	1404	 	246	 	 	 	1909	 	2328	 	 	 	1413	 	1	 	 	 	1911	 	1
	Thirty-Sixth
Supplemental       
	 	 	 	1445	 	028	 	 	 	 	 	 	 	 	 	1584	 	0259	 	 	 	 	 	 
	Thirty-Seventh
Supplemental
	 	12/30/02	 	1500	 	911	 	12/30/02	 	1959	 	2447	 	12/27/02	 	2022	 	1006	 	12/30/02	 	2136	 	148
	Thirty-Eighth
Supplemental
	 	11/22/04	 	1714	 	748	 	11/23/04	 	2081	 	1757	 	11/24/04	 	2126	 	569	 	11/23/04	 	2658	 	252
	Thirty-Ninth
	 	 	 	 	 	50	 	 	 	 	 	2201	 	 	 	 	 	1871-1919	 	 	 	Vol.	 	1
	Supplemental
	 	5/18/05	 	1761	 	#200509076	 	5/17/05	 	2109	 	#200500008491	 	5/18/05	 	2150	 	#200500010263	 	5/16/05	 	 2769	 	#200500004960
	Fortieth
Supplemental
	 	12/2705	 	1828	 	571	 	12/27/05	 	2151	 	1334	 	12/23/05	 	2184	 	875	 	12/27/05	 	2944	 	243
	Forty-first
	 	 	 	 	 	634	 	 	 	 	 	472-515	 	 	 	 	 	798-840	 	 	 	 	 	229-272
	Supplemental
	 	1/11/07	 	1933	 	#200700696	 	1/12/07	 	2214	 	#200700000749	 	1/11/07	 	2238	 	#200700000686	 	1/16/07	 	3216	 	#200700000492
	Forty-second
	 	 	 	 	 	953	 	 	 	 	 	175	 	 	 	 	 	473	 	 	 	 	 	1
	Supplemental
	 	12/17/07	 	2024	 	#200721572	 	12/19/07	 	2261	 	#200700018937	 	12/18/07	 	2285	 	#200700022991	 	12/18/07	 	3433	 	#200700013194
	Forty-third
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1
	Supplemental
	 	12/10/08	 	 	 	#200819618	 	12/18/08	 	2296	 	268	 	12/10/08	 	2324	 	2159	 	12/09/08	 	3633	 	1-45

 

33

 

ADAMS, CARBON, CUMBERLAND, FOREST, JUNIATA, LACKAWANNA, LUZERNE, MONROE, NORTHAMPTION, SNYDER, SUSQUEHANNA AND WYOMING COUNTIES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	ADAMS	 	CARBON	 	CUMBERLAND	 	FOREST
	Indenture	 	Date of
 Rec.	 	Book	 	Page	 	Date of
 Rec.	 	Book	 	Page	 	Date of
 Rec.	 	Book	 	Page	 	Date of
 Rec.	 	Book	 	Page
	Thirty-Eighth Supplemental
	 	11/23/04	 	3781	 	1	 	11/30/04	 	200416309	 	 	 	11/22/04	 	2004047145	 	 	 	11/29/04	 	231	 	306
	Thirty-Ninth Supplemental
	 	5/19/05	 	3970	 	54	 	5/18/05	 	1330	 	689 #200505926	 	5/13/05	 	1907	 	0247	 	5/16/05	 	234	 	345 #478
	Fortieth Supplemental
	 	12/28/05	 	4261	 	162	 	12/27/05	 	1408	 	576	 	12/27/05	 	1935	 	3233	 	12/27/05	 	0238	 	0304
	 
	Forty-first Supplemental
	 	1/11/07	 	4707	 	2081 #2007000007	 	1/12/07	 	1540	 	548 #200700596	 	1/11/07	 	1979	 	0482	 	1/09/07	 	0244	 	0362 #2007000022
	 
	Forty-second
	 	 	 	 	 	223	 	 	 	 	 	261	 	 	 	 	 	 	 	 	 	 	 	219
	Supplemental
	 	12/17/07	 	5062	 	200700023048	 	12/18/07	 	1650	 	#200715671	 	12/14/07	 	200746336	 	 	 	12/18/07	 	250	 	#2007-1339
	 
	Forty-third
	 	 	 	 	 	110	 	 	 	 	 	864	 	 	 	 	 	 	 	 	 	 	 	548
	Supplemental
	 	12/10/08	 	5312	 	200800020691	 	12/11/08	 	1735	 	#7520A3.03	 	12/11/08	 	200839447	 	 	 	12/08/08	 	255	 	#200800142

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	JUNIATA	 	LACKAWANNA	 	LUZERNE	 	MONROE
	Indenture	 	Date of
 Rec.	 	Book	 	Page	 	Date of
 Rec.	 	Book	 	Page	 	Date of
 Rec.	 	Book	 	Page	 	Date of
 Rec.	 	Book	 	Page
	Thirty-Eighth Supplemental
	 	11/22/04	 	345	 	1047	 	11/29/04	 	#200441665	 	 	 	11/23/04	 	3004	 	294775	 	11/24/04	 	2208	 	7674
	Thirty-Ninth Supplemental
	 	5/13/05	 	354	 	0049 #2005-1512	 	5/16/05	 	117727 #200512642	 	 	 	5/17/05	 	3005	 	#5637329	 	5/18/05	 	2225	 	8444 #200521128
	Fortieth Supplemental
	 	12/22/05	 	0365	 	1028	 	12/23/05	 	#20536270	 	 	 	12/28/05	 	3005	 	349088 #5677739	 	12/27/05	 	2252	 	9105 #200560314
	Forty-first
Supplemental
	 	1/09/07	 	385	 	0188	 	1/12/07	 	#200701277	 	 	 	1/16/07	 	3007	 	13425	 	11/06/07	 	2320	 	4708
	Forty-second
Supplemental
	 	12/13/07	 	401	 	0847 #20073981	 	12/17/07	 	#200734133	 	 	 	12/17/07	 	3007	 	328532 #5799531	 	12/17/07	 	2323	 	4362 #200745976
	Forty-third
Supplemental
	 	12/08/08	 	418	 	356 #2008004757	 	12/11/08	 	#200829528	 	 	 	12/11/08	 	3008	 	262977 #5850129	 	12/08/08	 	2346	 	263 #200834800

 

34

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	NORTHAMPTON	 	SNYDER	 	SUSQUEHANNA	 	WYOMING
	Indenture	 	Date of
Rec.	 	Book	 	Page	 	Date of
Rec.	 	Book	 	Page	 	Date of
Rec.	 	Book	 	Page	 	Date of
Rec.	 	Book	 	Page
	Thirty-Eighth Supplemental
	 	11/22/04	 	2004-1	 	452932	 	11/24/04	 	631	 	0001	 	11/24/04	 	200411624	 	 	 	11/24/04	 	0513	 	0774
	 
	 	 	 	 	 	182906	 	 	 	 	 	135	 	 	 	 	 	 	 	 	 	 	 	 
	Thirty-Ninth Supplemental
	 	5/17/05	 	2005-1	 	#2005026917	 	5/17/05	 	650	 	#2005028880	 	5/16/05	 	#200504384	 	 	 	5/18/05	 	0522	 	1289
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Instrument	 	 	 	 	 	0536	 	 
	Fortieth Supplemental
	 	12/23/05	 	2005-1	 	521563	 	12/27/05	 	677	 	684	 	12/22/05	 	#200512620	 	n/a	 	12/22/05	 	#2005004922	 	0748
	Forty-first
	 	 	 	 	 	25009	 	 	 	 	 	734	 	 	 	 	 	 	 	 	 	 	 	 
	Supplemental
	 	1/19/07	 	2007-1	 	#2007003204	 	1/11/07	 	724	 	#200700240	 	1/10/07	 	#200700387	 	 	 	1/10/07	 	0558	 	0959
	Forty-second
	 	 	 	 	 	446608	 	 	 	 	 	178	 	 	 	 	 	 	 	 	 	 	 	 
	Supplemental
	 	12/17/07	 	2007-1	 	#2007057981	 	12/18/07	 	763	 	#200707447	 	12/17/07	 	#200713519	 	 	 	12/18/07	 	#2007-5154	 	 
	Forty-third
	 	 	 	 	 	 	 	 	 	 	 	217	 	 	 	 	 	 	 	 	 	 	 	 
	Supplemental
	 	12/09/08	 	2008-1	 	320419	 	12/12/08	 	803	 	#220807546	 	12/09/08	 	#200818392	 	 	 	12/10/08	 	#2008-6990	 	 

LEHIGH AND CRAWFORD COUNTIES

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LEHIGH	 	CRAWFORD
	Indenture	 	Date of Rec.	 	Book	 	Page	 	Date of Rec.	 	Book	 	Page
	Forty-first
	 	1/10/07	 	7390692	 	 	 	1/11/07	 	856	 	177
	Supplemental
	 	 	 	 	 	 	 	 	 	 	 	#200700000444
	Forty-second
	 	12/14/07	 	7455854	 	 	 	12/14/07	 	905	 	577
	Supplemental
	 	 	 	 	 	 	 	 	 	 	 	#200700015228
	Forty-third
	 	12/09/08	 	2008001239	 	 	 	12/10/08	 	948	 	860
	Supplemental
	 	 	 	 	 	 	 	 	 	 	 	#200800012935

CLARION, VENANGO AND WARREN COUNTIES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	CLARION	 	 	VENANGO	 	 	WARREN	 
	Indenture	 	Date of Rec.	 	 	Book	 	 	Page	 	 	Date of Rec.	 	 	Book	 	 	Page	 	 	Date of Rec.	 	 	Book Page	 
	Forty-third
Supplemental
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

35

 

EXHIBIT C

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Date of	 	 	 	 	 	 	Recorded	 	 	 	 
	County and Grantor	 	Deed	 	 	Book	 	 	Page	 	 	Tax Parcel I.D. Number	 
	Clarion Co.
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Venango Co.
	 	 	12/30/08	 	 	 	525	 	 	 	396	 	 	Map #09-004-56
	Emlenton Water Company
	 	 	 	 	 	 	 	 	 	 	 	 	 	Map #09-005-005
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	Map #23-007-017
	Warren Co.
	 	 	04/29/09	 	 	 	1903	 	 	 	326	 	 	WN-008-649700
	 
	 	 	 	 	 	 	1903	 	 	 	334	 	 	WN-868-679800
	 
	 	 	 	 	 	 	1903	 	 	 	326	 	 	WN-868-835500
	 
	 	 	 	 	 	 	1903	 	 	 	341	 	 	WN-868-911300
	 
	 	 	 	 	 	 	1904	 	 	 	1	 	 	WN-869-442100

 

36

 

EXHIBIT D

Copy of Indenture of Mortgage dated as of January 1, 1941

 

37

 

The Bank of New York Mellon Trust Company, N. A., Mortgagee and Trustee named in the foregoing
Forty-fourth Supplemental Indenture, hereby certifies that its precise name and the post office
address are as follows:

The Bank of New York Mellon Trust Company, N. A.

Global Corporate Trust

1600 Market Street, Suite 1500

Philadelphia, PA 19103

Attention: Philip Newmuis

Telephone: 215-640-8455

Fax: 215-981-0316/0352

	 	 	 	 	 
	 	THE BANK OF NEW YORK

MELLON TRUST COMPANY, N. A.,

as Trustee

 	 
	 	By:  	Philip S. Newmuis
 	 
	 	 	Name:  	Philip S. Newmuis 	 
	 	 	Title:  	Authorized Signer 	 

 

38

 

	 	 	 	 	 

COMMONWEALTH OF PENNSYLVANIA

COUNTY OF MONTGOMERY

On the 1st day of July, 2009 before me, the Subscriber, a Notary Public for the Commonwealth
of Pennsylvania, personally appeared Stephen Anzaldo, who acknowledged himself to be the Treasurer
of Aqua Pennsylvania, Inc., a corporation, and that he as such Treasurer, being authorized to do
so, executed the foregoing Forty-fourth Supplemental Indenture as and for the act and deed of said
corporation and for the uses and purposes therein mentioned, by signing the name of the corporation
by himself as such officer.

In Witness Whereof I hereunto set my hand and official seal.

[NOTARIAL SEAL]

	 	 	 	 	 
	 	 	 
	 	     Lisa S. Piotrowski
 	 
	 	 	 
	 	 	 

 

39

 

	 	 	 	 	 

COMMONWEALTH OF PENNSYLVANIA

COUNTY OF PHILADELPHIA

On the 1st day of July, 2009 before me, the Subscriber, a Notary Public for the Commonwealth
of Pennsylvania, personally appeared Philip Newmuis, who acknowledged himself to be an Authorized
Signer of The Bank of New York Mellon Trust Company, N.A., a national banking association, and that
he as such Authorized Signer, being authorized to do so, executed the foregoing Forty-fourth
Supplemental Indenture as and for the act and deed of said national banking association and for the
uses and purposes therein mentioned by signing the name of said national banking association by
himself as such officer.

In Witness Whereof I hereunto set my hand and official seal.

[NOTARIAL SEAL]

	 	 	 	 	 
	 	 	 
	 	     Sandra M. Abrahams
 	 
	 	 	 
	 	 	 
	 

 

40Exhibit 10.52

Exhibit 10.52

BOND PURCHASE AGREEMENT

$58,000,000

PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY

Water Facilities Revenue Bonds

(Aqua Pennsylvania, Inc. Project)

Series A of 2009

Bond Purchase Agreement dated June 30, 2009, (this “Bond Purchase Agreement”) among the
PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY (the “Authority”), AQUA PENNSYLVANIA, INC., a
Pennsylvania corporation (the “Company”), and JEFFERIES & COMPANY, Inc., a Delaware Corporation, as
representative of itself and of Janney Montgomery Scott LLC (the “Underwriters”).

Section 1. Background.

(a) The Authority proposes to enter into a Financing Agreement (the “Financing Agreement”)
dated as of July 1, 2009 with the Company, under which the Authority will agree to loan to the
Company funds to (i) finance certain capital costs of the construction, acquisition and
installation of modifications, expansions and replacements of water distribution, treatment and
related operating systems located in the counties of Chester, Delaware and Montgomery in
Pennsylvania (the “Facilities”) that are part of the Company’s system (the “System”) for the
distribution of water to its customers, and (ii) pay related financing costs (collectively, the
“Project”). To finance the loan under the Financing Agreement, the Authority proposes to issue and
sell $58,000,000 aggregate principal amount of its Water Facilities Revenue Bonds (Aqua
Pennsylvania, Inc. Project), Series A of 2009 (the “Bonds”) to the Underwriters, who will in turn
reoffer the Bonds for sale to the public.

(b) The Bonds will be issued pursuant to the Pennsylvania Economic Development Financing Law,
Act of August 23, 1967, P.L. 251, as amended and supplemented (the “Act”), a resolution adopted by
the Authority on January 21, 2009 (the “Authority Resolution”) and a Trust Indenture, dated as of
July 1, 2009 (the “Trust Indenture”), between the Authority and U.S. Bank National Association, as
trustee (the “Trustee”). The Bonds will have such terms as are set forth in Schedule I attached
hereto.

The Bonds will be payable out of payments by the Company under the Financing Agreement,
including payments under its First Mortgage Bond, 5 % Series due October 1, 2039 in the principal
amount of $58,000,000 (the “First Mortgage Bond”) issued with respect to the Bonds. The First
Mortgage Bond will be issued under and secured by the Company’s Indenture of Mortgage dated as of
January 1, 1941 (the “Indenture of Mortgage”), from the Company to The Bank of New York Mellon
Trust Company, N.A., as trustee (successor to The Pennsylvania Company for Insurance on Lives and
Granting Annuities, The Pennsylvania Company for Banking and Trusts, The First Pennsylvania Banking
and Trust Company, First Pennsylvania

 

1

 

Bank, N.A., CoreStates Bank, N.A., Mellon Bank, N.A., Chase Manhattan Trust Company, National
Association and J.P. Morgan Trust Company, National Association) (the “Mortgage Trustee”), as
presently amended and supplemented and as to be further supplemented by a Forty-fourth Supplemental
Indenture of Mortgage to be dated as of July 1, 2009 (the “Forty-fourth Supplemental Mortgage”,
which together with the Indenture of Mortgage, as amended and supplemented, is referred to
hereinafter as the “Mortgage”). The First Mortgage Bond will be issued in the same aggregate
principal amount, and will mature on the same date and bear interest at the same rate as the Bonds.
All of the Authority’s rights under the Financing Agreement to receive and enforce repayment of its
loan to the Company and to enforce payment of the Bonds, including all of the Authority’s rights to
the First Mortgage Bond, and all of the Authority’s rights to moneys and securities in the Project
Funds, the Revenue Funds and the Debt Service Funds (and the accounts within all such Funds
applicable to the Bonds) established by the Trust Indenture, except for the Authority’s rights to
certain fees and reimbursements for expenses, indemnification and notice thereunder and rights
relating to amendments of and notices under the Financing Agreement, will be assigned to the
Trustee as security for the Bonds pursuant to the Trust Indenture.

(c) The Project will finance the acquisition, construction, installation and equipping of
facilities for the furnishing of water for purposes of Section 142(a)(4) of the Internal Revenue
Code of 1986, as amended (the “Code”), so that the interest on the Bonds will not be includable in
gross income for federal income tax purposes under the Code and the Underwriters may offer the
Bonds for sale without registration under the Securities Act of 1933, as amended (the “1933 Act”),
or qualification of the Trust Indenture under the Trust Indenture Act of 1939, as amended (the
“1939 Act”).

(d) A Preliminary Official Statement dated June 25, 2009 including the Appendices thereto and
all documents incorporated therein by reference (the “Preliminary Official Statement”), has been
supplied to the parties hereto, and a final Official Statement to be dated the date hereof,
including the Appendices thereto and all documents incorporated therein by reference, prepared for
use in such offerings will be supplied to the parties hereto as soon as it is available, subject to
Section 10 hereof (such final Official Statement, as it may be amended or supplemented with the
consent of the Authority, the Underwriters and the Company, is hereinafter referred to as the
“Official Statement”).

Section 2. Purchase, Sale and Closing. On the terms and conditions herein set forth, the
Underwriters will buy from the Authority, and the Authority will sell to the Underwriters, all (but
not less than all) of the Bonds at a purchase price equal to $55,110,440.00 which is equal to the
$58,000,000 aggregate principal amount of the Bonds, less original issue discount of $2,019,560,
less the underwriting discount of $870,000. Payment for the Bonds shall be made in immediately
available funds to the Trustee for the account of the Authority. Closing (the “Closing”) will be at
the offices of Ballard Spahr Andrews & Ingersoll, LLP, Philadelphia, Pennsylvania (“Bond Counsel”),
at 10:00 a.m., Eastern Standard Time, on July 16, 2009 or at such other date, time or place or in
such other manner as may be agreed on by the parties hereto. The Bonds will be delivered as one
fully registered bond in the principal amount of $58,000,000 in the name of Cede & Co., as nominee
for The Depository Trust Company (“DTC”), with CUSIP numbers printed thereon, and shall conform in
all respects to DTC’s Book-Entry Only

 

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System. Delivery of the Bonds to DTC will be made by delivering the Bonds to the Trustee utilizing
the DTC FAST system. If the Underwriters so request, the Bonds shall be made available to the
Underwriters (prior to their delivery to DTC) in Philadelphia, Pennsylvania at least three full
business days before the Closing for purposes of inspection.

The Underwriters agree to make a bona fide public offering of the Bonds at the initial
offering prices or yields set forth in the Official Statement; provided, however, that the
Underwriters reserve the right (and the Authority and the Company hereby expressly acknowledge such
right): to make concessions to dealers; to effect transactions that stabilize or maintain the
market price of the Bonds above that which might otherwise prevail in the open market and to
discontinue at any time such stabilizing transactions; and to change such initial offering prices,
all as the Underwriters shall deem necessary in connection with the marketing of the Bonds.

Section 3. Authority’s Representations. The Authority makes the following representations on
and as of the date hereof, all of which shall survive Closing:

(a) The Authority is a body politic and corporate, duly created and existing under the
Constitution and laws of the Commonwealth of Pennsylvania (the “Commonwealth”), including the
“Act”, and has, and at the date of Closing will have, full legal right, power and authority to:
enter into this Bond Purchase Agreement; execute and deliver the Bonds, the Trust Indenture, the
Financing Agreement, this Bond Purchase Agreement and the Authority’s tax certificate and the other
various certificates executed by the Authority in connection therewith (collectively, with the
Authority Resolution, the “Authority Financing Documents”); issue, sell and deliver the Bonds to
the Underwriters as provided herein; and carry out and consummate the transactions contemplated by
the Authority Financing Documents and the Official Statement to be carried out and/or consummated
by it.

(b) The Authority Resolution was duly adopted at a public meeting of the Authority at which a
quorum was present and acted throughout; and the Authority Resolution is in full force and effect
and has not been amended, repealed or superseded in any way.

(c) The sections entitled “INTRODUCTORY STATEMENT” (insofar as it relates to the Authority),
“THE AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION” (solely insofar as the information set forth
therein relates to the Authority) contained in the Preliminary Official Statement as of its date
did not contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.

(d) The sections entitled “INTRODUCTORY STATEMENT” (insofar as it relates to the Authority),
“THE AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION” (solely insofar as the information set forth
therein relates to the Authority) contained in the Official Statement as of its date does not or
will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading.

 

3

 

(e) The Authority has complied, and will at the Closing be in compliance, in all material
respects with the provisions of the Act.

(f) The Authority has duly authorized and approved the Preliminary Official Statement and the
Official Statement; and has duly authorized and approved the execution and delivery of, and the
performance by the Authority of the obligations on its part contained in, the Authority Financing
Documents.

(g) To the best of the knowledge of the Authority after due inquiry, the Authority is not in
material breach of or in default under any applicable law or administrative regulation of the
Commonwealth or the United States; and the execution and delivery of the Authority Financing
Documents, and compliance with the provisions of each thereof, do not and will not conflict with or
constitute a breach of or default under any existing law, administrative regulation, judgment,
decree, loan agreement, note, resolution, agreement or other instrument to which the Authority is a
party or is otherwise subject.

(h) All approvals, consents and orders of any governmental authority, board, agency or
commission having jurisdiction that would constitute a condition precedent to the Authority’s legal
ability to issue the Bonds or to the Authority’s performance of its obligations hereunder and under
the Authority Financing Documents have been obtained or will be obtained prior to the Closing.

(i) The Bonds, when issued, authenticated and delivered in accordance with the Trust Indenture
and sold to the Underwriters as provided herein, will be validly issued and will be valid and
binding limited obligations of the Authority enforceable against the Authority in accordance with
their terms (except as enforcement may be affected by bankruptcy, insolvency, reorganization,
moratorium or other laws or legal or equitable principles affecting the enforcement of creditors’
rights (“Creditors’ Rights Limitations”)).

(j) The terms and provisions of the Authority Financing Documents when executed and delivered
by the respective parties thereto will constitute the valid, legal and binding obligations of the
Authority enforceable against the Authority in accordance with their respective terms (except as
enforcement of remedies may be limited by Creditors’ Rights Limitations).

(k) There is no action, suit, proceeding, inquiry or investigation, at law or in equity,
before or by any court, or public board or body, pending or, to the knowledge of the Authority
after due inquiry, threatened against the Authority, affecting the existence of the Authority or
the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin
the sale, issuance or delivery of the Bonds or of the revenues or assets of the Authority pledged
or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in
any way contesting or affecting the validity or enforceability of the Authority Financing Documents
or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the
Official Statement, or contesting the power or authority of the Authority with respect to the
issuance of the Bonds or the execution, delivery or performance of any of the Authority Financing Documents, wherein an unfavorable decision, ruling or finding would affect in any way the
validity or enforceability of any of the Authority Financing Documents.

 

4

 

(1) The net proceeds received from the Bonds and applied in accordance with the Trust
Indenture and the Financing Agreement shall be used in accordance with the Act as described in the
Official Statement.

(m) Any certificate signed by any of the authorized officers of the Authority and delivered to
the Underwriters shall be deemed a representation and warranty by the Authority to the Underwriters
as to the statements made therein.

Section 4. Company’s Representations and Warranties. The Company makes the following
representations and warranties on and as of the date hereof and as of the date of Closing, all of
which will survive the Closing:

(a) The Company has not sustained, since December 31, 2008, any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or decree; and since
the respective dates as of which information is given in the Official Statement, there have not
been any material changes in the outstanding capital stock or the long-term debt of the Company or
any material adverse change, or a development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, stockholder’s equity or results
of operations of the Company, otherwise than as set forth or contemplated in the Official
Statement.

(b) The Company was organized, is in good standing and subsists as a corporation under the
laws of the Commonwealth, with power (corporate and other) to own its properties and conduct its
business as described in the Official Statement.

(c) The First Mortgage Bond has been duly authorized; and, when issued and delivered as
contemplated by this Bond Purchase Agreement, will have been duly executed, authenticated, issued
and delivered and will constitute a valid and legally binding obligation of the Company enforceable
in accordance with its terms (except as may be affected by Creditors’ Rights Limitations) entitled
to the benefits provided by the Mortgage.

(d) The Indenture of Mortgage has been duly authorized, executed and delivered by the Company,
and the Forty-fourth Supplemental Mortgage has been duly authorized by the Company. When the
Forty-fourth Supplemental Mortgage, in substantially the form approved by the Underwriters and Bond
Counsel, has been executed and delivered by the Company and assuming due authorization and
execution by the Mortgage Trustee, and recorded as required by law, the Mortgage will constitute a
valid and legally binding instrument enforceable against the Company in accordance with its terms
except as enforceability may be affected by Creditors’ Rights Limitations; will constitute a
direct, valid and enforceable first mortgage lien (except as enforceability of such lien may be
affected by Creditors’ Rights Limitations) upon all of the properties and assets of the Company
(not heretofore released as provided for in the Mortgage) specifically or generally described or
referred to in the Mortgage as being subject to the lien

 

5

 

thereof, excepting permitted liens under the Mortgage and excepting property and assets that the
Mortgage expressly excludes from the lien thereof; and will create a mortgage upon all properties
and assets acquired by the Company after the execution and delivery of the Forty- fourth
Supplemental Mortgage and required to be subjected to the lien of the Mortgage pursuant thereto
when so acquired, except for permitted liens under the Mortgage. The Indenture of Mortgage has been
and the Forty-fourth Supplemental Mortgage will be duly filed, recorded or registered in each place
in the Commonwealth in which such filing, recording or registration was or is required to protect
and preserve the lien of the Mortgage; and all necessary approvals of regulatory authorities,
commissions and other governmental bodies having jurisdiction over the Company required to subject
the mortgaged properties and assets or trust estate (as defined in the Mortgage) to the lien of the
Mortgage have been duly obtained.

(e) With only such exceptions as are not material and do not interfere with the conduct of the
business of the Company, the Company has good and marketable title to all of its real property
currently held in fee simple, and all of its other interests in real property (other than certain
rights of way, easements, occupancy rights, riparian and flowage rights, licenses, leaseholds and
real property interests of a similar nature). In each case such title is free and clear of all
liens, encumbrances and defects except such as may be described in the Official Statement, the lien
of the Mortgage, permitted liens under the Mortgage or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be made of such property by
the Company. Any real property and buildings held under lease by the Company are held by it under
valid, subsisting and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and buildings by the Company.

(f) With only such exceptions as are not material and do not interfere with the conduct of the
business of the Company, the Company has all licenses, franchises, permits, authorizations, rights,
approvals, consents and orders of all governmental authorities or agencies necessary for the
ownership or lease of the properties owned or leased by it and for the operation of the business
carried on by it as described in the Official Statement, and all water rights, riparian rights,
easements, rights of way and other similar interests and rights described or referred to in the
Mortgage necessary for the operation of the business carried on by it as described in the Official
Statement. Except as otherwise set forth in the Official Statement, all such licenses, franchises,
permits, orders, authorizations, rights, approvals and consents are in full force and effect and
contain no unduly burdensome provisions. Except as otherwise set forth in the Official Statement,
there are no legal or governmental proceedings pending or, to the knowledge of the Company after
due inquiry, threatened that would result in a material modification, suspension or revocation
thereof. The Company has the legal power to exercise the rights of eminent domain for the purposes
of conducting its water utility operations.

(g) The issue and sale of the Bonds, the issue and delivery of the First Mortgage Bond and the
compliance by the Company with all of the applicable provisions of the First Mortgage Bond and the
Mortgage and the execution, delivery and performance by the Company of the Forty-fourth
Supplemental Mortgage, the Financing Agreement, this Bond Purchase Agreement and the Continuing
Disclosure Agreement will not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under, or result in the creation or

 

6

 

imposition of any lien, charge or encumbrance (other than the lien of the Mortgage) upon any of the
property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company are subject, nor will
such action result in a violation of the provisions of the Articles of Incorporation, as amended,
or the Bylaws of the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its property. No
consent, approval, authorization, order, registration or qualification of or with any court or any
such regulatory authority or other governmental body (other than those already obtained) is
required to be obtained by the Company for the issue and sale of the Bonds, the issue and delivery
of the First Mortgage Bond, the execution, delivery and performance by the Company of this Bond
Purchase Agreement, the Financing Agreement, the Forty-fourth Supplemental Mortgage, the First
Mortgage Bond and the Continuing Disclosure Agreement, or the consummation by the Company of the
other transactions contemplated by this Bond Purchase Agreement or the Mortgage.

(h) The Company has obtained from the Pennsylvania Public Utility Commission an order duly
authorizing the issuance and delivery of the First Mortgage Bond by the Company and the incurring
of the debt evidenced thereby, on terms not inconsistent with this Bond Purchase Agreement.

(i) The Company is not a holding company, a registered holding company or an affiliate of a
registered holding company within the meaning of the Public Utility Holding Company Act of 1935, as
amended.

(j) There are no legal or governmental proceedings pending to which the Company is a party or
to which any property of the Company is subject, other than as set forth in the Official Statement,
wherein an unfavorable ruling, decision or finding would have a material adverse effect on the
financial position, stockholder’s equity or results of operations of the Company; and, to the best
of the Company’s knowledge after due diligence, no such proceedings are threatened by governmental
authorities or threatened by others.

(k) The Project consists of either land or property of a character subject to depreciation for
federal income tax purposes and will be used to furnish water that is or will be made available to
members of the general public (including electric utility, industrial, agricultural, or commercial
users); the rates for the furnishing or sale of the water have been established or approved by a
state or political subdivision thereof, by an agency or instrumentality of the United States, or by
a public service or public utility commission or other similar body of any state or political
subdivision thereof; and all other information supplied by the Company to the Underwriters with
respect to the exclusion from gross income pursuant to Section 103 of the Code of the interest on
the Bonds is correct and complete.

(l) The Company has not, within the immediately preceding ten (10) years, defaulted in the
payment of principal or interest on any of its bonds, notes or other securities, or any legally
authorized obligation issued by it.

 

7

 

(m) The information with respect to the Company and the Project and the descriptions of the
First Mortgage Bond and the Mortgage contained in the Preliminary Official Statement and the
Official Statement (including appendices A and B thereto) do not contain any untrue statement of a
material fact or omit to state any material fact necessary to be stated therein in order to make
such information and descriptions, in the light of the circumstances under which they were made,
not misleading.

Section 5. Authority’s Covenants. The Authority will:

(a) Furnish such information, execute such instruments and take such other action in
cooperation with the Underwriters as the Underwriters may reasonably request to qualify the Bonds
for offer and sale under the Blue Sky or other securities laws and regulations of such states and
other jurisdictions in the United States of America as the Underwriters may designate and will
assist, if necessary therefor, in the continuance of such qualifications in effect so long as
required for distribution of the Bonds; provided, however, that the Authority shall in no event be
required to file a general consent to suit or service of process or to qualify as a foreign
corporation or as a dealer in securities in any such state or other jurisdiction.

(b) Not, on its part, amend or supplement the Official Statement without prior notice to and
the consent of the Underwriters and the Company and will advise the Underwriters and the Company
promptly of the institution of any proceedings by any governmental agency or otherwise affecting
the use of the Official Statement in connection with the offer and sale of the Bonds.

(c) Refrain from knowingly taking any action (and permitting any action with regard to which
the Authority may exercise control) that would result in the loss of the exclusion from gross
income for federal income tax purposes of interest on the Bonds.

Section 6. Company’s Covenants. The Company agrees that it will:

(a) Refrain from knowingly taking any actions (and from permitting any action with regard to
which the Company may exercise control) that would result in the loss of the exclusion from gross
income for federal tax purposes of interest on the Bonds.

(b) Indemnify and hold harmless the Authority, its members, directors, officers, agents,
attorneys, and employees and the Underwriters, their respective officers, directors, officials,
agents, attorneys, employees, and each person, if any, who controls each of the Underwriters
within the meaning of Section 15 of the 1933 Act or Section 20 of the Securities Exchange Act of
1934, as amended (the “1934 Act”), from and against all losses, claims, damages, liabilities and
expenses, joint or several, to which the Authority and the Underwriters, or either of them, or any
of their respective members, directors, officers, agents, attorneys, and employees and each person,
if any, who controls the Underwriters within the meaning of the 1933 Act or 1934 Act as
aforedescribed may become subject, under federal laws or regulations, or otherwise, insofar as such
losses, claims, damages, liabilities and expenses (or actions in respect thereof) arise out of or
are based upon: (i) a breach of the Company’s representations included in this Agreement; (ii) any
untrue statement or alleged untrue statement of any material

 

8

 

fact pertaining to the Project or the Company set forth in the Official Statement, the Preliminary
Official Statement or any amendment to either; (iii) the willful or negligent omission of (or the
alleged omission to state) a material fact in the Official Statement, the Preliminary Official
Statement, or any amendment or supplement to either, as such fact is required to be stated therein
or necessary to make the statements therein that pertain to the Company or the Project not
misleading in the light of the circumstances under which they were made; (iv) or arising by virtue
of the failure to register the Bonds under the 1933 Act or the failure to qualify the Trust
Indenture under the 1939 Act; or (v) arising by virtue of any audit or investigation conducted by a
state or federal agency, department or entity questioning, among other things, the tax-exempt
status of the Bonds.

(c) Undertake, pursuant to the Continuing Disclosure Agreement dated as of July 1, 2009 to be
entered into between the Company and the Trustee (the “Continuing Disclosure Agreement”), to
provide annual reports and notices of certain material events in accordance with Rule l5c2-l2 under
the 1934 Act, as amended (“Rule 15c2-12”).

(d) Not amend or supplement the Official Statement without prior notice to, and the consent
of, the Underwriters, and will advise the Underwriters and the Authority promptly of the
institution of any proceedings by any governmental agency or otherwise affecting the use of the
Official Statement in connection with the offer and the sale of the Bonds.

(e) Take all actions reasonably necessary to maintain in effect and to comply with the order
of the Commonwealth Public Utility Commission dated March 26, 2009, registering the Securities
Certificate for the issuance of the First Mortgage Bond in support of the Bonds.

Section 7. Underwriters’ Covenant and Compensation.

(a) By acceptance hereof the Underwriters agree to indemnify and hold harmless the Authority,
its members, directors, officers, agents, attorneys, and employees and the Company, its officers,
directors, agents, attorneys, and employees and each person if any, who controls the Company within
the meaning of Section 15 of the 1933 Act against all or several claims, losses, damages,
liabilities and expenses asserted against them, or any of them, at law or in equity, in connection
with the offering and sale of the Bonds on the grounds that the information under the caption
“UNDERWRITING” in the Preliminary Official Statement or the Official Statement (or any supplement
or amendment to said information) contains an untrue or allegedly untrue statement of a material
fact or omits or allegedly omits to state any material fact necessary to make the statements
therein not misleading in the light of the circumstances under which they were made (it being
understood that the Underwriters furnished only the information under such “UNDERWRITING” heading),
or failure on the part of the Underwriters to deliver an Official Statement to any purchaser. The
Underwriters will reimburse any legal or other expenses reasonably incurred by a party, person or
entity indemnifiable under this Section 7 in connection with investigating or defending any such
loss, claim, damage, liability or action. This indemnity agreement will be in addition to any
liability that the Underwriters may otherwise have. The Underwriters shall not be liable for any
settlement of, any such action effected without its consent.

 

9

 

(b) The Underwriters will be paid an underwriting discount of $870,000 with respect to the
Bonds.

(c) The Underwriters acknowledge that the Authority is relying upon the accuracy of the
certification in clause (b) above on the date hereof as a condition precedent to lending the
proceeds of the Bonds to the Company.

Section 8. Notice of Indemnification; Settlement. Promptly after a party, person or entity
indemnifiable under Section 6 or 7 of this Bond Purchase Agreement (an “Indemnitee”) receives
notice of the commencement of any audit, investigation or action against such Indemnitee in respect
of which indemnity is to be sought by the Indemnitee against the Company or any of the respective
Underwriters, as the case may be (the “Indemnifying Party”), the Indemnitee will notify the
Indemnifying Party in writing of such action, and the Indemnifying Party may assume the defense
thereof, including the employment of counsel and the payment of all expenses; but the failure so to
notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that it
may have to the Indemnitee otherwise than hereunder. The Indemnifying Party shall not be liable for
any settlement of any such action effected without its consent, but if settled with the consent of
the Indemnifying Party or if there is a final judgment for the plaintiff in any such action, the
Indemnifying Party will indemnify and hold harmless the Indemnitee from and against any loss or
liability by reason of such settlement or judgment. The indemnity agreements contained in this Bond
Purchase Agreement shall include reimbursement for expenses reasonably incurred by an Indemnitee in
investigating the claim and in defending it if the Indemnifying Party declines to assume the
defense and shall survive delivery of the Bonds. Notwithstanding the foregoing, in the event of an
investigation or audit by the Internal Revenue Service or the Securities and Exchange Commission or
any other state or federal agency, department, or entity with respect to the Bonds, the Authority
shall have the right and duty to undertake its own defense, including the employment of counsel,
with full power to litigate, compromise or settle the same on its own behalf, and the Company
agrees that it will indemnify and hold the Authority harness for all costs and expenses, including,
but not limited to, attorney fees and expenses and costs, of any such settlement.

Section 9. Equitable Contribution. If the indemnification provided for in Section 6(b) of
this Bond Purchase Agreement is unavailable to either of the respective Underwriters (or any
controlling person thereof) in respect of any losses, claims, damages or liabilities referred to
therein, then the Company shall, in lieu of indemnifying each or one of the respective
Underwriters, contribute to the amount paid or payable by each or any of the Underwriters as a
result of such losses, claims, damages or liabilities in such proportion as is appropriate to
reflect the relative benefits received by the Company and each of the Underwriters, respectively,
from the offering of the Bonds. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then the Company shall contribute to such amount paid
or payable by the Underwriters in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and each of the Underwriters,
respectively, in connection with the statements or omission which resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable considerations. The relative
benefit received by the Company or the Underwriters shall be deemed to be in the same proportion as
the total proceeds from the offering (before deducting issuance costs and expenses other than

 

10

 

underwriting fees and commissions) received by the Company, on the one hand, bear to the total
Underwriting fees and commissions received by each of the Underwriters, on the other hand. The
relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact related to information supplied by the Company or each of the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by
any other method of allocation that does not take account of the equitable considerations referred
to above in this Section 9. The amount paid or payable by each of the Underwriters as a result of
the losses, claims, damages or liabilities referred to above in this Section 9 shall be deemed to
include any reasonable legal or other expenses reasonably incurred by each of the respective
Underwriters in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, the Underwriters shall not be required to
contribute any amount in excess of the amount of the discount allowed to each of the respective
Underwriters as set forth in Section 7(b) hereof.

Section 10. Official Statement; Public Offering.

(a) In order to enable the Underwriters to comply with Rule l5c2-l2, the Company has prepared
(or caused to be prepared) the Preliminary Official Statement, which the Company and the Authority
(in the case of the Authority, only with respect to the information therein under the headings “THE
AUTHORITY” and, insofar as they relate to the Authority, “INTRODUCTORY STATEMENT” and “ABSENCE OF
MATERIAL LITIGATION”) deem final and complete as of its date except for certain permitted omissions
as described in Rule l5c2-l2. The Company shall provide to the Underwriters sufficient copies of
the Official Statement in sufficient time to accompany any confirmation that requires payment from
any customer and in any event within seven (7) business days after the date of this Bond Purchase
Agreement. If the Company, during the period described in Section l0(b) below, has or gains
knowledge of a fact or circumstance that would render the Official Statement misleading in any
material respect, then the Company shall promptly give the Underwriters written notice thereof. The
Authority and the Company hereby authorize the use of the Preliminary Official Statement and the
Official Statement by the Underwriters in connection with the offering of the Bonds.

(b) The Authority and the Company will not adopt or distribute any amendment of or supplement
to the Official Statement, except with the prior written consent of the Underwriters. If from the
date hereof until the earlier of (i) ninety (90) days after the end of the underwriting period (as
defined in Rule l5c2-12) or (ii) the time when the Official Statement is available to any person
from the Repository with which it has been deposited, but in no case less than twenty-five (25)
days following the end of the underwriting period, any event relating to or affecting the
Authority, the Company or the Bonds shall occur, the result of which shall make it necessary, in
the opinion of the Underwriters, to amend or supplement the Official Statement in order to make it
not misleading in the light of the circumstances existing at that time, the Company shall forthwith
prepare, and the Company and the Authority shall approve for distribution, a reasonable number of
copies of an amendment of or supplement to the Official Statement, in form and substance reasonably
satisfactory to the Underwriters, so that the Official

 

11

 

Statement then will not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances existing at that
time, not misleading. The Authority shall cooperate with the Company in the issuance and
distribution of any such amendment or supplement.

(c) Upon Closing, the Underwriters shall promptly provide the Municipal Securities Rulemaking
Board (which as of July 1, 2009, is the only nationally recognized municipal securities information
repository) with a copy of the Official Statement for filing in accordance with Rule 15c2-l2, and
inform the Authority and the Company in writing as to the date and place of such filing and the
date of the end of the underwriting period.

Section 11. Conditions of Underwriters’ and Authority’s Obligations. The Underwriters’
obligations to purchase and pay for the Bonds and the Authority’s obligation to issue and deliver
the Bonds are subject to fulfillment of the following conditions at or before Closing:

(a) The representations of the Authority and the Company herein, as applicable, shall be true
in all material respects on and as of the date of the Closing and shall be confirmed by appropriate
certificates at Closing.

(b) Neither the Authority nor the Company, as applicable, shall be in default in the
performance of any of their respective covenants herein.

(c) The Underwriters shall have received:

(i) An opinion of Ballard Spahr Andrews & Ingersoll, LLP, Bond Counsel, dated the date of
Closing, substantially in the form attached as Exhibit A hereto, addressed to (or with reliance
letters delivered in respect of) the Authority, the Trustee, the Company and the Underwriters.

(ii) An opinion of Ballard Spahr Andrews & Ingersoll, LLP, Bond Counsel, dated the date of
Closing, substantially in the form attached as Exhibit B hereto, addressed to the Underwriters.

(iii) An opinion of the Office of Chief Counsel of the Pennsylvania Department of Community
and Economic Development, as counsel for the Authority, dated the date of Closing, substantially in
the form attached as Exhibit C hereto, addressed to the Underwriters, the Trustee, the Company and
Bond Counsel.

(iv) Opinions of Dilworth Paxson LLP, counsel to the Company, and the Company’s Senior Vice
President-Law and Administration, dated the date of Closing, substantially in the forms attached as
Exhibit D hereto, addressed to the Underwriters, the Authority and Bond Counsel.

(v) An agreed upon procedures letter dated the date of the Official Statement and addressed to
the Company and the Underwriters from the Company’s auditor with respect to financial information set forth in Appendix A and Appendix B to the Official Statement, in form and
substance reasonably satisfactory to the Company’s auditor and the Underwriters.

 

12

 

(vi) A certificate dated the date of Closing executed by the Executive Director of the
Authority and addressed to the Underwriters to the effect that, to the best of his or her
respective knowledge:

(A) the representations and warranties of the Authority contained herein are true and correct
in all material respects as of the date of Closing; and

(B) the Authority has complied in all material respects with all agreements executed by the
Authority in connection with issuance of the Bonds and satisfied in all material respects the
Authority’s covenants contained in Section 5 herein and all of the conditions on its part to be
performed or satisfied at or prior to the Closing.

(vii) A certificate dated the date of Closing executed by the chief financial officer of the
Company and addressed to the Underwriters to the effect that, to the best of his knowledge:

(A) the representations and warranties of the Company in this Bond Purchase Agreement are true
and correct in all material respects as of the date of Closing;

(B) the Preliminary Official Statement and the Official Statement, as of their respective
dates, insofar as they relate to the Company, do not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein, under the circumstances in which they were made, not misleading in any respect;
and

(C) no event affecting the Company has occurred since the date of this Bond Purchase Agreement
that is required to be disclosed in the Official Statement or necessary in order to make the
statements and information therein not misleading in any material respect.

(viii) Two executed copies of the Trust Indenture, the Financing Agreement, the Bond Purchase
Agreement, the Forty-fourth Supplemental Mortgage and the Continuing Disclosure Agreement and
specimen copies of the First Mortgage Bond.

(ix) Two copies of the Articles of Incorporation and Bylaws of the Company, as amended to the
date of Closing, and of the resolutions of the Board of Directors of the Company authorizing and
approving the execution and delivery of this Bond Purchase Agreement, the Financing Agreement, the
First Mortgage Bond, the Forty-fourth Supplemental Mortgage, the Continuing Disclosure Agreement
and the incurrence of indebtedness with respect thereto and all transactions described in the
Official Statement and contemplated by this Bond Purchase Agreement, all certified by its Secretary
or Assistant Secretary.

(x) Two copies of the Authority Resolution.

 

13

 

(xi) One or more letters from the Company’s auditor, dated the date of the Preliminary
Official Statement and the Official Statement and addressed to the Company and the Underwriters,
consenting to the use of the financial statements reported upon by such firm and all references to
such firm contained in the Preliminary Official Statement and the Official Statement.

(xii) Evidence satisfactory to the Underwriters of a rating of “AA-” assigned by Standard &
Poor’s Ratings Services, a Division of The McGraw-Hill Companies, and that such rating is in full
force and effect as of the date of Closing.

(xiii) Evidence satisfactory to Bond Counsel and the Underwriters of the receipt by the
Authority of a Preliminary Allocation relating to the Bonds and approval of the Project from the
Pennsylvania Department of Community and Economic Development and of the registration of a
Securities Certificate relating to the First Mortgage Bond and the Bonds with the Pennsylvania
Public Utility Commission.

(xiv) Such additional documentation, including, without limitation, legal opinions, as the
Underwriters or their counsel, or Bond Counsel may reasonably request to evidence compliance with
applicable law and the validity of the Bonds, the Financing Agreement, the Trust Indenture, this
Bond Purchase Agreement, the Forty-fourth Supplemental Mortgage, the First Mortgage Bond and the
Continuing Disclosure Agreement, and to evidence that the interest on the Bonds is not includable
in gross income under the Code and the status of the offering under the 1933 Act and the 1939 Act.

(d) At Closing there shall not have been any material adverse change in the financial
condition of the Company or any adverse development concerning the business or assets of the
Company that would result in a material adverse change in the prospective financial condition or
results of operations of the Company from that described in the Official Statement, which, in the
judgment of the Underwriters, makes it inadvisable to proceed with the sale of the Bonds; and the
Underwriters shall have received certificates of the Company certifying that no such material
adverse change has occurred or, if such a change has occurred, full information with respect
thereto.

(e) The Underwriters shall deliver at Closing a certificate in form acceptable to Bond Counsel
to the effect that the Underwriters have sold to the public (excluding bond houses and brokers) a
substantial amount of the Bonds at initial offering prices no higher than, or yields no lower than,
those shown on the cover page of the Official Statement and that such certificate may be relied
upon for purposes of determining compliance with Section 148 of the Code.

Section 12. Events Permitting the Underwriters to Terminate. The Underwriters may terminate
their obligation to purchase the Bonds at any time before Closing if any of the following occurs:

(a) A legislative, executive or regulatory action or proposed action, or a court decision,
which in the reasonable judgment of the Underwriters casts sufficient doubt on the legality of, or
the exclusion from gross income for federal income tax purposes of interest on, obligations such as the Bonds so as to materially impair the marketability or materially lower the
market price of the Bonds.

 

14

 

(b) Any action by the Securities and Exchange Commission or a court that would require
registration of the Bonds or the First Mortgage Bond under the 1933 Act or qualification of the
Indenture under the 1939 Act.

(c) Any general suspension of trading in securities on the New York Stock Exchange or the
establishment, by the New York Stock Exchange, by the Securities and Exchange Commission, by any
federal or state agency, or by the decision of any court, of any limitation on prices for such
trading, or any outbreak of new hostilities or other national or international calamity or crisis,
or any material escalation in any such hostilities, calamity or crisis, the effect of which on the
financial markets of the United States of America shall be such as to materially impair the
marketability or materially lower the market price of the Bonds.

(d) Any event or condition occurring or arising after the date hereof, which in the reasonable
judgment of the Underwriters renders untrue or incorrect, in any material respect as of the time to
which the same purports to relate, the information contained in the Official Statement, or which
requires that information not reflected in the Official Statement or Appendices thereto should be
reflected therein in order to make the statements and information contained therein not misleading
in any material respect as of such time; provided that the Authority, the Company and the
Underwriters will use their best efforts to amend or supplement the Official Statement to reflect,
to the reasonable satisfaction of the Underwriters, such changes in or additions to the information
contained in the Official Statement.

(e) Pending or threatened litigation affecting or arising out of the ownership of the
Facilities or any other facilities of the Company or the issuance of the Bonds, which, in the
reasonable judgment of the Underwriters, would materially impair the marketability or materially
lower the market price of the Bonds.

(f) Quantities of the Official Statement are not delivered to the Underwriters in a timely
manner as required by Section 10 hereof.

If the Underwriters terminate their obligation to purchase the Bonds because any of the
conditions specified in Section 11 hereof or this Section 12 shall not have been fulfilled at or
before the Closing, such termination shall not result in any liability on the part of the
Authority, the Underwriters or the Company, except for the obligations of the Company under
Sections 6(b), 8, 9 and 14 which shall remain in full force and effect.

Section 13. [Intentionally Omitted]

Section 14. Expenses. All expenses and costs of the authorization, issuance, sale and
delivery of the Bonds including, without limitation, accrued interest, the preparation of and
furnishing to the Underwriters of the Preliminary Official Statement and the Official Statement,
the preparation and execution of the Bonds, the Financing Agreement, the Trust Indenture, the First
Mortgage Bond, the Forty-fourth Supplemental Mortgage, the Continuing Disclosure

 

15

 

Agreement and this Bond Purchase Agreement, rating agency fees, the issuance and closing fees of
the Authority, the fees and disbursements of counsel to the Authority, the fees and disbursements
of Bond Counsel, the fees and disbursements of counsel to the Underwriters and the expenses
incurred in connection with qualifying the Bonds for sale under the securities laws of various
jurisdictions and preparing a Blue Sky memorandum, if any, shall be paid by the Company from funds
contributed by the Company and from proceeds of the Bonds. The Authority shall bear no
out-of-pocket expense in connection with the transactions contemplated by this Bond Purchase
Agreement. Each of the respective Underwriters will pay all other expenses each may incur in
connection with the public offering of the Bonds.

Section 15. Execution in Counterparts. This Bond Purchase Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the same instrument,
and any of the parties hereto may execute this Bond Purchase Agreement by signing any such
counterpart.

Section 16. Notices and Other Actions. All notices, requests, demands and formal actions
hereunder will be in writing mailed, faxed (with confirmation of receipt) or delivered by
nationally recognized, next-day delivery service to:

The Underwriters:

Jefferies & Company, Inc.

9 Orchard View

Chadds Ford, PA 19317

Attention: George C. Werner, III, Managing Director

Fax #: (610) 388-0531

Email: gwerner@Jefferies.com

The Company:

Aqua Pennsylvania, Inc.

762 Lancaster Avenue

Bryn Mawr, PA 19010

Attention: Stephen F. Anzaldo, Treasurer

Fax #: (610) 519-0989

Email: sfanzaldo@aquaamerica.com

The Authority:

Pennsylvania Economic Development Financing Authority

Center for Private Financing

400 North Street, 4th Floor

Harrisburg, PA 17120-0225

Attention: Stephen Drizos, Executive Director

Fax #: (717) 787-0879

Email: sdrizos@state.pa.us

 

16

 

Section 17. Governing Law. This Bond Purchase Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania, excluding those relating to choice of
laws or conflict of laws, and may not be assigned by the Authority, the Company or the
Underwriters.

Section 18. Successors. This Bond Purchase Agreement will inure to the benefit of and be
binding upon the parties and their respective successors and, as to Sections 6, 7, 8 and 9 hereof,
the Indemnitees, and will not confer any rights upon any other person. The term “successor” shall
not include any holder of any Bonds merely by virtue of such holding.

Section 19. Limitations on Liability. No personal recourse shall be had for any claim based
on this Bond Purchase Agreement or the Bonds against any board member, officer, agent, employee, or
attorney past, present or future, of the Authority or any successor body as such, either directly
or through the Authority or any successor body, under any constitutional provision, statute, or
rule of law or by enforcement of any assessment or penalty or otherwise. Notwithstanding any
provision or obligation to the contrary in this Bond Purchase Agreement, the liability of the
Authority for payments of any kind, nature or description provided for herein or in any other
document executed pursuant hereto shall be limited to the revenues derived by the Authority from
the Financing Agreement.

(Signatures on next page)

 

17

 

IN WITNESS WHEREOF, the Authority, the Company and the Underwriters have caused their duly
authorized officers to execute and deliver this Bond Purchase Agreement as of the date first
written above.

	 	 	 	 	 
	 	PENNSYLVANIA ECONOMIC 

DEVELOPMENT FINANCING

AUTHORITY

 	 
	 	By:  	Stephen M. Drizos
 	 
	 	 	STEPHEN M. DRIZOS 	 
	 	 	Executive Director 	 
	 

	 	 	 	 	 
	 	AQUA PENNSYLVANIA, INC.

 	 
	 	By:  	Stephen F. Anzaldo
 	 
	 	 	STEPHEN F. ANZALDO 	 
	 	 	Treasurer 	 
	 

	 	 	 	 	 
	 	JEFFERIES & COMPANY, INC. on 

behalf of the Underwriters

 	 
	 	By:  	George C. Werner, III
 	 
	 	 	GEORGE C. WERNER, III 	 
	 	 	Managing Director 	 
	 

 

18

 

SCHEDULE I

Term of Bonds

Dated Date: June 16, 2009

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Principal	 	Rate of	 	 	 	 
	Series	 	Maturity Date	 	Amount	 	Interest	 	Price	 	Yield
	2009A

	 	October 1, 2039
	 	$	58,000,000	 	 	 	5	%	 	 	96.518	 	 	 	5.23	%

Interest Payment Dates: April 1 and October 1, commencing October 1, 2009

Redemption Provisions: The Bonds are subject to redemption as follows:

Optional Redemption. The Bonds are subject to optional redemption prior to maturity by the
Authority, at the direction of the Company, on and after October 1, 2019, as a whole or in part at
any time, at a redemption price equal to 100% of the principal amount thereof, plus interest
accrued thereon to the date fixed for redemption.

Extraordinary Optional Redemption. The Bonds are subject to redemption, at any time prior to
maturity, at the option of the Authority, upon the direction of the Company, in whole, at a
Redemption Price of 100% of the principal amount of the Bonds to be redeemed, plus interest accrued
thereon to the date fixed for redemption, if any of the following events shall have occurred:

(a) the damage or destruction of all or substantially all of the Facilities to such extent,
that, in the reasonable opinion of the Company, the repair and restoration thereof would not be
economical; or

(b) the taking by condemnation, or the threat thereof, of all or substantially all of the
Facilities or the taking by condemnation of any part, use or control of the Facilities so as to
render them unsatisfactory to the Company for their intended use; or

(c) in the Company’s reasonable opinion, (1) unreasonable burdens or excessive liabilities
shall have been Imposed upon the Company with respect to the Facilities or the operation thereof,
including, but not limited to, federal, state or other ad valorem, property, income or other taxes
not being imposed on the date of the Agreement other than ad valorem property taxes presently
levied upon privately owned property used for the same general purposes as the Facilities, or (2)
the continued operation of the Facilities is impractical, uneconomical or undesirable for any
reason.

 

1

 

Any such redemption shall be on any date within 180 days following the occurrence of one of
the events listed above permitting the exercise of the option.

Special Mandatory Redemption. The Bonds are subject to mandatory redemption, in part, on the
first interest payment date for which notice can be given in accordance with the Trust Indenture
after the Project has been completed and the certificate of the Company with respect thereto
required by the Financing Agreement has been filed with the Authority and the Trustee, to the
extent of any amounts transferred from the Project Fund to the Debt Service Fund pursuant to the
Trust Indenture, at a Redemption Price of 100% of the principal amount of the Bonds to be redeemed,
plus accrued interest thereon to the date fixed for redemption.

Selection shall be made and notice given in accordance with the Trust Indenture.

 

2

 

Exhibit “A”

FORM OF APPROVING OPINION OF BALLARD SPAHR ANDREWS AND INGERSOLL, LLP

Ballard Spahr Andrews & Ingersoll, LLP will render an opinion in substantially

the following form in connection with the issuance of the Bonds.

July 16, 2009

			
	          Re:	 	$58,000,000 principal amount of Pennsylvania Economic Development

Financing Authority Water Facilities Revenue Bonds

(Aqua Pennsylvania, Inc., Project) Series A of 2009

Ladies and Gentlemen:

We have acted as Bond Counsel to the Pennsylvania Economic Development Financing Authority
(the “Authority”) in connection with the issuance and sale of $58,000,000 principal amount of its
Pennsylvania Economic Development Financing Authority Water Facilities Revenue Bonds (Aqua
Pennsylvania, Inc. Project) Series A of 2009 (the “Bonds”). The Bonds are being issued by the
Authority at the request of Aqua Pennsylvania, Inc., as successor to Philadelphia Suburban Water
Company (the “Company”), to finance facilities located in the Pennsylvania Counties of Chester,
Delaware and Montgomery (the “Project Facilities”) for the furnishing of water which is made
available on reasonable demand to members of the general public in portions of the Pennsylvania
Counties of Chester, Delaware and Montgomery.

The Bonds are being issued in fully registered form under a Trust Indenture dated as of July
1, 2009 (the “Indenture”) between the Authority and U.S. Bank National Association, as trustee (the
“Trustee”). The Authority and the Company are entering into a Financing Agreement dated as of July
1, 2009 (the “Financing Agreement”), pursuant to which the Authority will lend the proceeds of the
Bonds to the Company to finance the Project Facilities.

In satisfaction of its obligation under the Financing Agreement with respect to the Bonds, the
Company, concurrently with the issuance of the Bonds, is delivering to the Trustee its First
Mortgage Bond
 _____ 
% Due 2039* (the “First Mortgage Bond”) in the principal amount equal to
the principal amount of the Bonds. The Authority has assigned its interests under the Financing
Agreement with respect to the Bonds, including its right to receive the First Mortgage Bond and the
payments thereunder, to the Trustee for the benefit of the holders of the Bonds.

Sections 103 and 141-150 of the Internal Revenue Code of 1986, as amended (the
"Code"), provide generally that interest on certain issues of bonds, the
proceeds of which are to be used to provide facilities for the furnishing of water within the
meaning of Section 142(a) of the Code, will be excludable from the gross income of the holder
thereof. The Code imposes various requirements pertaining to the use and investment of the
proceeds of such bonds, the maturity of and security for such bonds, the procedure for issuance of
such bonds, the rebate of arbitrage profits to the Internal Revenue Service and filings with the
Internal Revenue Service. We have concluded that the Bonds meet the requirements of the Code in
reliance on representations of the Authority and the Company with respect to the application of the
proceeds of the Bonds, the nature of the Project Facilities and other matters solely within the
knowledge of the Authority and the Company which we have not independently verified, and have

 

A-1

 

assumed continuing compliance with the covenants in the Indenture, the Financing Agreement and
the certificates of the Company with respect to the Project Facilities delivered at closing
pertaining to the requirements of those sections of the Code which affect the exclusion from gross
income of interest on the Bonds for federal income tax purposes. In the event that such
representations are determined to be inaccurate or incomplete or the Authority or the Company fails
to comply with the aforementioned covenants, interest on the Bonds could become includable in gross
income from the date of issuance, regardless of the date on which the event causing such inclusion
occurs.

In our capacity as Bond Counsel, we have examined such documents, records of the Authority and
other instruments as we deemed necessary to enable us to express the opinions set forth below,
including original counterparts or certified copies of the Indenture, the Financing Agreement, the
First Mortgage Bond, the other documents listed in the closing memorandum filed with the Trustee
and an executed Water Facilities Revenue Bond (Aqua Pennsylvania, Inc. Project) Series A of 2009 as
authenticated by the Trustee.

Based on the foregoing, it is our opinion that:

1. The Authority is a public instrumentality of the Commonwealth of Pennsylvania and a body
corporate and politic, organized and existing under Pennsylvania law, with full power and authority
to execute and deliver the Financing Agreement and the Indenture, and to issue and sell the Bonds.

2. The Financing Agreement and the Indenture have been duly authorized, executed and delivered
by the Authority and constitute legal, valid and binding obligations of the Authority enforceable
against the Authority in accordance with their respective terms, subject to state and federal laws
and equitable principles affecting the enforcement of creditors’ rights.

3. All right, title and interest of the Authority under the Financing Agreement as they relate
to the Bonds, including the right to receive the First Mortgage Bond and the payments thereunder
(except for certain rights to indemnification and to payments in respect of administrative expenses
of the Authority), have been effectively assigned to the Trustee by the Indenture.

4. The issuance and sale of the Bonds have been duly authorized by the Authority; the Bonds
have been duly executed and delivered by the Authority; and, on the assumption that all Bonds have
been authenticated by the Trustee, the Bonds are legal, valid and binding obligations of the
Authority enforceable against the Authority in accordance with their terms, subject to state and
federal laws and equitable principles affecting the enforcement of creditors’ rights, and are
entitled to the benefit and security of the Indenture.

5. Interest on the Bonds is excludable from gross income for purposes of federal income tax
under existing laws as enacted and construed on the date of initial delivery of the Bonds, assuming
the accuracy of the certifications of the Authority and the Company and continuing compliance by
the Authority and the Company with the requirements of the Code, except that interest on a Bond is
not excludable while the Bond is held by a substantial user of the financed facilities or a related
person as provided in the Code. Interest on the Bonds is exempt from individual and corporate
federal alternative minimum tax (“AMT”) and is not includable in adjusted current earnings for
purposes of corporate AMT. We express no opinion regarding other federal tax consequences relating
to ownership or disposition of, or the accrual or receipt of interest on, the Bonds.

6. Under the existing laws of the Commonwealth of Pennsylvania as enacted and construed on the
date of initial delivery of the Bonds, interest on the Bonds is exempt from Pennsylvania personal
income tax and Pennsylvania corporate net income tax, and the Bonds are exempt from personal
property taxes in Pennsylvania.

 

A-2

 

We do not express any opinion herein as to the adequacy or accuracy of the Official Statement
of the Authority pertaining to the offering of the Bonds.

We call your attention to the fact that the Authority’s obligation to make payments in respect
of the Bonds is limited to moneys received from payments to be made by the Company pursuant to the
First Mortgage Bond and as provided in the Indenture and that the Bonds do not pledge the credit or
taxing power of the Commonwealth of Pennsylvania or any political subdivision thereof. The
Authority has no taxing power.

Very truly yours,

 

A-3

 

EXHIBIT “B”

FORM OF SUPPLEMENTAL OPINION

OF BALLARD SPAHR ANDREWS & INGERSOLL, LLP

July 16, 2009

			
	          Re:	 	$58,000,000 principal amount of Pennsylvania Economic Development Financing
Authority Water Facilities Revenue Bonds, (Aqua Pennsylvania, Inc. Project)
Series A of 2009

Ladies and Gentlemen:

Reference is made to our approving opinion as Bond Counsel of even date herewith identified as
Closing Item No. [E-3(a)] delivered to you concurrently herewith and relating to the
above-referenced Bonds (the “Bonds”). At your request we have undertaken a review of certain other
matters pertaining to the Bonds. All terms are used but not defined herein shall have the same
meanings ascribed to them in the Official Statement dated June 30, 2009 (the “Official Statement”)
prepared in connection with the public offering of the Bonds.

Based on the review described in our approving opinion, it is our opinion that:

1. The Bond Purchase Agreement dated June 30, 2009 (the “Bond Purchase Agreement”), among you,
the Company and the Authority relating to the Bonds has been duly authorized, executed and
delivered by the Authority and constitutes the legal, valid and binding obligation of the Authority
enforceable against the Authority in accordance with its terms, except as enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally and general principles of equity.

2. It is not necessary in connection with the offering and sale of the Bonds to register the
Bonds under the Securities Act of 1933, as amended, or to qualify the Indenture under the Trust
Indenture Act of 1939, as amended.

3. The information in the Official Statement under the captions “INTRODUCTORY STATEMENT
-Description of the Bonds” and “INTRODUCTORY STATEMENT -Security for the Bonds,” “THE BONDS” (other
than the information under the sub-caption “Book-Entry Only System,” as to which we express no
view) and “SECURITY FOR THE BONDS” (other than the information under the sub-captions “The
Mortgage” and “Additional Parity Indebtedness” as to which we express no view) and the information
set forth in Appendix C to the Official Statement (other than information under the heading “THE
FIRST MORTGAGE BONDS AND THE MORTGAGE” as to which we express no view), insofar as such information
purports to summarize provisions of the Bonds, the Indenture and the Agreement, fairly and
accurately summarize such information in all material respects. The information in the Official
Statement under the caption “TAX MATTERS” and the related information set forth on the outside
front cover of the Official Statement accurately reflect our firm’s opinion with respect to the matters
discussed therein in all material respects.

This letter is furnished by us solely for your benefit in connection with the provisions of
the Bond Purchase Agreement and may not be relied upon by any other persons for any purpose without
our express written permission.

Very truly yours,

 

 

 

July ___, 2009

	 	 	 
	U.S. Bank National Association

	 	Ballard Spahr Andrews & Ingersoll, LLP
	Philadelphia, Pennsylvania

	 	Philadelphia, Pennsylvania
	 
	 	 
	 
	 	 
	 
	 	 
	Jefferies & Company, Inc.

	 	Aqua Pennsylvania, Inc.
	Chadds Ford, Pennsylvania

	 	Bryn Mawr, Pennsylvania

			
	Re:	 	Pennsylvania Economic Development Financing Authority Water Facilities Revenue Bonds (Aqua
Pennsylvania, Inc. Project), Series A of 2009

Ladies and Gentlemen:

The Office of Chief Counsel of the Pennsylvania Department of Community and Economic
Development, which agency is responsible for providing staff services to Pennsylvania Economic
Development Financing Authority (the “Authority”), a public body corporate and politic and a public
instrumentality of the Commonwealth of Pennsylvania, has participated in the proceedings relating
to the authorization and issuance of the Authority’s Water Facilities Revenue Bonds (Aqua
Pennsylvania, Inc. Project), Series A of 2009 in the aggregate principal amount of $58,000,000 (the
“Bonds”).

The Bonds are being issued under and pursuant to the Pennsylvania Economic Development Financing
Law (Act No. 102, approved August 23, 1967, P.L. 251, as amended, including the amendments
effected by Act No. 48, approved July 10, 1987, P.L. 273, and Act No. 74, approved December 17,
1993, P.L. 490) (the “Act”), a certain Trust Indenture dated as of July 1, 2009 (the “Indenture”) by and between the Authority and U.S. Bank National
Association, as Trustee (the “Trustee”) and resolution of the Authority adopted on January 21, 2009
(the “Resolution”) authorizing the issuance of the Bonds.

 

 

 

 

The Bonds are being issued for the purpose of providing financing for a certain project (the
“Project”) as more fully described in the Financing Agreement (hereafter defined), for the benefit
of Aqua Pennsylvania, Inc. (the “Borrower”). The Project has been authorized and approved by the
Chester County Industrial Development Authority for financing by the Authority pursuant to the
Act.

The Authority and the Borrower have entered into a Financing Agreement dated as of July 1,
2009 (the “Financing Agreement”) providing, among other things, for a loan in the principal amount
of the Bonds to pay costs of the Project and for the repayment of such loan by the Borrower in
such amounts and at such times as are required to pay the interest on and the principal of the
Bonds when due. Pursuant to the Indenture, the Authority has assigned to the Trustee all its
rights, title and interest in, to and under the Loan Agreement (except as otherwise provided
therein).

The Authority has entered into a Bond Purchase Agreement with Jefferies & Company, Inc., as
Representative for Janney Montgomery Scott LLC and Jefferies & Company, Inc. (collectively, the
“Underwriters”), and the Borrower dated June 30, 2009 (the “Bond Purchase Agreement”) providing
for the offering and sale of the Bonds, and pursuant thereto the Authority has authorized the use
of an Official Statement dated June 30, 2009, in connection with the offering and sale of the
Bonds (the “Official Statement”). The Indenture, the Financing Agreement and the Bond Purchase
Agreement are sometimes referred to herein collectively as the “Authority Documents”.

In the course of serving as counsel to the Authority, the Office of Chief Counsel has examined
the Indenture, the Financing Agreement, the Bond Purchase Agreement, and such legislation,
proceedings, certificates, records, approvals, resolutions and other documents as have been deemed
necessary for the purposes of this opinion.

The Office of Chief Counsel has assumed and relied upon the truth, completeness, authority and
accuracy of all documents, certificates and instruments examined and the authenticity of all
signatures thereon other than those of the Authority.

The Office of Chief Counsel has also assumed that each of the documents referred to herein
are, where appropriate, duly authorized and executed by and valid and legally binding obligations
of, and enforceable in accordance with their terms against all parties thereto other than the
Authority and that the actions required to be taken or consents required to be obtained by such
parties have been taken and obtained. In rendering this opinion, The Office of Chief Counsel has
also assumed that such parties have acted in full compliance with the terms of all applicable laws,
regulations and orders.

As to questions of fact material to this opinion, The Office of Chief Counsel has relied upon
certificates and representations of officers and representatives of the Authority or of other
public officials, without independent investigation.

 

 

 

The Office of Chief Counsel has not made any independent investigation in rendering this opinion other than the examination described above. This opinion is therefore qualified in all
respects by the scope of that examination.

The Office of Chief Counsel’s opinions are specifically limited to the present internal laws
of the Commonwealth of Pennsylvania (“Commonwealth”) and no opinion is expressed as to the effect
the laws of any other jurisdiction may have upon the subject matter of the opinions expressed
herein under conflict of laws principles or otherwise.

Based upon the foregoing, and subject to the limitations, assumptions, qualifications and
exceptions set forth herein, the Office of Chief Counsel is of the opinion that:

1. The Authority is a public body corporate and politic and a public instrumentality of the
Commonwealth of Pennsylvania, organized and existing under the Act. Under the Act, and by the
Resolution, the Authority has full power and authority to undertake the financing of the Project,
to execute, deliver and perform its obligations under the Indenture, the Financing Agreement and
the Bond Purchase Agreement and to issue and deliver the Bonds.

2. The Resolution has been duly adopted by the Authority in compliance with the Pennsylvania
Sunshine Act of October 15, 1998, P.L. 729, No. 93 (65 P.S. § 701 et seq.) The Resolution complies
in all respects with the procedural rules of the Authority and the requirements of Pennsylvania
law, constitutes the legal, valid and binding act of the Authority and remains in full force and
effect on the date hereof.

3. The Authority has duly authorized the execution and issuance of the Bonds and the execution
and delivery of the Authority Documents. The Bonds have been duly and validly executed and
delivered by the Authority and the Authority Documents have each been duly and validly executed and
delivered by the Authority and the Bonds and each of the Authority Documents are valid and binding
agreements of the Authority, enforceable against the Authority in accordance with their respective
terms.

4. The directors and officers of the Authority identified in the Authority’s General
Certificate delivered at the closing for the issuance of the Bonds have been duly elected or
appointed, and are qualified to serve as such. To the best of our knowledge, no director or
officer of the Authority has any financial interest, direct or indirect, in the Borrower or the
Project or the financing thereof.

5. The Indenture, the Financing Agreement, the Bond Purchase Agreement and the Bonds have been
duly authorized, executed and delivered by the Authority and, assuming due authorization, execution
and delivery by the other parties thereto, constitute legal, valid and binding obligations of the
Authority enforceable in accordance with their respective terms, except as enforcement may be
limited by general principles of equity, regardless of whether applied in proceedings in equity or
at law, or by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other
similar laws affecting the enforcement of creditors’ rights generally.

 

 

 

6. The execution and the issuance by the Authority of the Bonds, the execution and delivery by
the Authority of the Authority Documents and performance by the Authority of the Authority’s
obligations under the Bonds and the Authority Documents, do not conflict with or constitute on the
part of the Authority a violation of, breach of or default under any existing constitutional
provision or statute of the Commonwealth applicable to the Authority, or, to our knowledge without
having undertaken any independent investigation, any indenture, mortgage, deed of trust,
resolution, note agreement or other agreement or instrument to which the Authority is a party or by
which the Authority is bound and which is known to the Office of Chief Counsel, or, to our
knowledge, without having undertaken any independent investigation, any order, rule or regulation
of any court, governmental agency or body of the Commonwealth having jurisdiction over the
Authority or any of its activities or property. In rendering the opinion set forth in this
paragraph, we have relied without independent investigation on the representations of the Borrower
that the Project will be located in Pennsylvania and will not be used in whole or in part for
illegal activities.

7. To our knowledge, without having undertaken any independent investigation, there is no
action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court,
public board or body, pending or threatened against the Authority, wherein an unfavorable decision,
ruling or order would materially and adversely affect the obligations of the Authority under the
Bonds.

8. Except for any approval, consent or authorization required under the securities or blue sky
laws of any jurisdiction in connection with the purchase and distribution of the Bonds, as to which
no opinion is expressed, no additional or further approval, consent or authorization of any
governmental or public agency or authority not already obtained is required by the Authority in
connection with the issuance of delivery of the Bonds or the entering into and performance of its
obligation under the Indenture, the Financing Agreement or the Bond Purchase Agreement.

9. The Authority has approved the distribution of the Preliminary Official Statement dated
June 25, 2009 and the Official Statement by the Underwriter in connection with the offering of the
Bonds.

10. The information contained in the Official Statement under the headings “INTRODUCTORY
STATEMENT — The Authority,” “THE AUTHORITY” and “ABSENCE OF MATERIAL LITIGATION” (solely insofar as
the information set forth therein relates to the Authority) has been reviewed and nothing has come
to our attention which would lead us to believe that such information contains any untrue statement
of a material fact +or omits to state a material fact which is required to be stated therein or
which is necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading in any material respect. Except as set forth in this paragraph, no
opinion is expressed with respect to the adequacy or accuracy of the Official Statement or other
information pertaining to the offering for sale of the Bonds.

 

 

 

The opinions expressed herein are subject in all respects to the following qualifications: (a)
no opinion is rendered as to the availability of equitable remedies including, but not limited to,
specific performance and injunctive relief, whether enforceability is considered in a proceeding in
equity or at law; (b) no opinion is rendered as to the effect of bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium and other similar laws or legal principles affecting
creditors’ rights or remedies; (c) no opinion is rendered as to the creation, perfection or
priority of any lien or security interest; (d) no opinion is rendered with respect to any “blue
sky” or other securities laws of the Commonwealth or of other jurisdictions; and (e) no opinion is
rendered with regard to any federal income tax law or regulation or any state tax law or regulation
of the Commonwealth or of other jurisdictions.

No opinion is expressed as to the validity or enforceability of any provisions of the
Authority Documents: (a) allowing any person or entity to institute judicial or non judicial
proceedings or to exercise any other rights, without notice to the person or entity against whom
enforcement is sought; (b) waiving any right or defense of any person or entity; (c) providing or
implying the availability of self-help in any particular event or circumstances; (d) relating to
court costs or legal fees which may be properly chargeable or recoverable in any judicial
proceedings; and (e) relating to indemnification.

We call your attention to the fact that the Bonds are special and limited obligations of the
Authority, payable solely from the payments derived by the Authority under the Financing Agreement.
The Bonds are not obligations or liabilities of the Commonwealth or any political subdivision
thereof nor do the Bonds pledge the credit of the Commonwealth of Pennsylvania or any political
subdivision thereof nor do the Bonds pledge the credit of the Authority (other than to the limited
extent described above). The Authority has no taxing power.

This opinion is given as of the date hereof. No opinion is expressed as to any matter not set
forth in the numbered paragraphs herein. We make no undertaking to supplement this opinion if facts
or circumstances hereafter come to our attention or changes in law occur after the date hereof.
This opinion is rendered solely in connection with the original delivery and payment for the Bonds
on the date hereof, and may not be relied upon for any other purpose. This opinion may not be
relied upon by any other person, including any purchaser of the Bonds from the Underwriter or
otherwise or for any other purpose, nor may this opinion be distributed, quoted or disclosed to any
person, firm or entity without the Office of Chief Counsel’s prior written consent in each
instance.

The opinions herein expressed are issued by the Pennsylvania Department of Community and
Economic Development Office of Chief Counsel, a division of the Commonwealth of Pennsylvania Office
of General Counsel, each of which is an executive agency of the Commonwealth of Pennsylvania and
not by any individual attorney therein either individually or as an employee of the Commonwealth of
Pennsylvania.

OFFICE OF CHIEF COUNSEL

 

 

 

EXHIBIT “D”

FORM OF OPINIONS OF THE COMPANY’S LEGAL COUNSEL AND THE

COMPANY’S SENIOR VICE PRESIDENT — LAW AND ADMINISTRATION

Letterhead of Dilworth Paxson LLP

July 16, 2009

Pennsylvania Economic Development Financing Authority

400 North Street, 4th Floor

Harrisburg, PA 17120-0225

Jefferies & Company, Inc.

9 Orchard View Way

Chadds Ford, PA 19317

Ballard Spahr Andrews & Ingersoll, LLP

1735 Market Street, 51st Floor

Philadelphia, PA 19103

			
	          Re:	 	$58,000,000 principal amount of Pennsylvania Economic Development Financing
Authority Water Facilities Revenue Bonds (Aqua Pennsylvania, Inc. Project) Series A of
2009

Ladies and Gentlemen:

We have acted as counsel to Aqua Pennsylvania, Inc. (the “Company”) in connection with (i) the
issuance by the Pennsylvania Economic Development Financing Authority (the “Authority”), and the
sale to Jefferies & Company, Inc. and Janney Montgomery Scott LLC, pursuant to that certain Bond
Purchase Agreement dated June 30, 2009 (the “Purchase Agreement”), of $58,000,000 principal amount
of Pennsylvania Economic Development Financing Authority Water Facilities Revenue Bonds (Aqua
Pennsylvania, Inc. Project), Series A of 2009 (the “Authority Bonds”), and (ii) the issuance and
delivery of the Company’s First Mortgage Bond,
 _____ 
% Series due 2039 in the principal amount of
$58,000,000 (the “First Mortgage Bond”), issued under an Indenture of Mortgage (the “Original
Mortgage”) dated as of January 1, 1941, as amended and supplemented by supplemental indentures
thereto, including the Forty-fourth Supplemental Indenture dated as of July 1, 2009 (the
“Supplemental Indenture”) under which The Bank of New York Mellon Trust Company, N.A. is successor
trustee (the “Mortgage Trustee”). The original Mortgage as amended and supplemented is hereinafter
called the “Mortgage”. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Purchase Agreement.

 

 

 

We have examined and reviewed, among other things:

(a) a copy of the Articles of Incorporation of the Company, as amended and restated and now in
effect;

(b) a copy of the bylaws of the Company as now in effect;

(c) resolutions of the Board of Directors of the Company authorizing the execution and
delivery of the Purchase Agreement, the Financing Agreement, the Supplemental Indenture, the First
Mortgage Bonds, the Continuing Disclosure Agreement and the Official Statement;

(d) the Purchase Agreement;

(e) the Financing Agreement dated as of July 1, 2009 (the “Financing Agreement”) between the
Authority and the Company;

(f) the Continuing Disclosure Agreement dated as of July 1, 2009 (the “Continuing Disclosure
Agreement”) between the Company and U.S. Bank National Association, as trustee for the Authority
Bonds (the “Trustee”);

(g) the Official Statement relating to the Authority Bonds dated June 30, 2009 (the “Official
Statement”);

(h) the Securities Certificate relating to the issue and sale of the First Mortgage Bonds,
filed by the Company with the Pennsylvania Public Utility Commission pursuant to the provisions of
Chapter 19 of the Pennsylvania Public Utility Code, and a copy of the Order of the Public Utility
Commission registering such Securities Certificate, certified by the Secretary of the Pennsylvania
Public Utility Commission;

(i) a Subsistence Certificate from the Secretary of the Commonwealth with respect to the
Company;

(j) executed counterparts of the Original Mortgage and of the Supplemental Indenture and
evidence satisfactory to us of the due recordation thereof in the Counties of Adams, Berks,
Bradford, Bucks, Carbon, Chester, Columbia, Crawford, Cumberland, Delaware, Forest, Juniata,
Lackawanna, Lawrence, Lehigh, Luzerne, Mercer, Monroe, Montgomery, Northampton, Northumberland,
Pike, Schuylkill, Snyder, Susquehanna, Wayne and Wyoming, Pennsylvania;

(k) the documents delivered to the Mortgage Trustee in connection with the authentication of
the First Mortgage Bond pursuant to the provisions of Sections 2(B) and 3 of Article IV of the
Original Mortgage;

(l) the First Mortgage Bond delivered to the Trustee at the Closing held today;

(m) the certificates of the Company and other documents delivered to the Mortgage Trustee at
the Closing;

 

 

 

(n) a certificate of the Company and various bringdown title searches of various title
companies in the Counties of Adams, Berks, Bradford, Bucks, Carbon, Chester, Columbia, Crawford,
Cumberland, Delaware, Forest, Juniata, Lackawanna, Lawrence, Lehigh, Luzerne, Mercer, Monroe,
Montgomery, Northampton, Northumberland, Pike, Schuylkill, Snyder, Susquehanna, Wayne and Wyoming,
Pennsylvania, each dated as of a recent date (collectively, “Title Searches”), as to matters
relating to title to real estate and the lien of the Mortgage thereon, on which certificate and
searches we are relying for the purposes of this opinion; and

(o) various certificates of officers of the Company relating to title to real property and the
priority of any lien thereon.

In rendering this opinion, we have assumed that all signatures on documents and instruments
examined by us are genuine (except signatures of the Company on the Purchase Agreement, the
Supplemental Indenture, the Financing Agreement, the First Mortgage Bond and the Continuing
Disclosure Agreement (collectively, the “Company Documents”) and the Official Statement), the
authenticity of all documents submitted to us as originals and the conformity with the original
documents of all documents submitted to us as copies. We have also assumed, with your permission,
that none of the signatories of the documents and instruments referred to above is an affiliate of
the Company within the meaning of 66 Pa.C.S. §210l (1989).

As to questions of fact material to the opinions hereinafter expressed, we have relied solely
and without investigation upon certificates of public officials, certificates of officers of the
Company and the representations of the Company contained in the Company Documents (including the
exhibits and schedules to such documents) and the certificates and other documents delivered
pursuant thereto. To the extent that the opinions contained herein are given to our knowledge, such
knowledge means the actual knowledge of those attorneys within our firm who have provided
substantive representation to the Company in connection with this financing, without investigation
and inquiry, and does not include matters of which such attorneys could be deemed to have
constructive knowledge.

In rendering this opinion, we have also assumed that each of the Company Documents has been
duly authorized, executed and delivered by each party thereto (other than the Company) and that
each of the Company Documents is binding and enforceable against each such party in accordance with
its respective terms.

Further, as to matters relating to title to real estate and the lien of the Mortgage, we have
relied exclusively upon various certificates of officers of the Company and the Title Searches and
we have not made, nor undertaken to make, any investigation or inquiry with respect to title to
real property or the priority of any lien thereon.

We are generally familiar with the Company’s operations as a public utility within the
Commonwealth of Pennsylvania (the “Commonwealth”).

Based upon the foregoing and such other examination of fact and law as we have deemed
necessary for purposes of this opinion, we are of the opinion that:

 

 

 

1. The Company was organized and subsists under the laws of the Commonwealth, with the
corporate power to own its properties and conduct its business as described in the Official
Statement.

2. The Company has the corporate power and authority to enter into and perform the Company
Documents. The execution, delivery and performance by the Company of the Company Documents have
been duly authorized by all requisite corporate action.

3. The Purchase Agreement, the Financing Agreement and the Continuing Disclosure Agreement
constitute legal, valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.

4. The First Mortgage Bond has been duly authorized, executed, authenticated, issued and
delivered and each constitutes a valid and legally binding obligation of the Company entitled to
the benefits provided by the Mortgage.

5. The First Mortgage Bond is not subject to the registration requirements of the 1933 Act.

6. The Mortgage constitutes a direct, valid and enforceable mortgage lien (except as
enforceability of such lien may be limited by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors’ rights) upon all of the properties and assets of the
Company (not heretofore released as provided for in the Mortgage) specifically or generally
described or referred to in the Mortgage as being subject to the lien thereof, except for permitted
liens under the Mortgage; (i) the Original Mortgage, either separately or as an exhibit to (a) the
Thirty-Fifth Supplemental Indenture dated as of January 1, 2002, (b) the Thirty-Eighth Supplemental
Indenture dated as of November 15, 2004 or (c) the Forty-first Supplemental Indenture dated as of
January 1, 2007, and (ii) the Forty-fourth Supplemental Indenture dated as of July 1, 2009, has
been properly recorded in the Counties of Adams, Berks, Bradford, Bucks, Carbon, Chester, Columbia,
Crawford, Cumberland, Delaware, Forest, Juniata, Lackawanna, Lawrence, Lehigh, Luzerne, Mercer,
Monroe, Montgomery, Northampton, Northumberland, Pike, Schuylkill, Snyder, Susquehanna, Wayne and
Wyoming in the Commonwealth and such recordations are the only recordations necessary in order to
establish, preserve, protect and perfect the lien of the Mortgage on all real estate and fixed
property of the Company (excluding easement and other similar nights) described in the Mortgage as
subject to the lien thereof.

7. With such exceptions as are not material and do not interfere with the conduct of the
business of the Company, the Company has good and marketable title to all of its real property
currently held in fee simple; good and marketable title to all of its other interests in real
property (other than to certain rights of way, easements, occupancy rights, riparian and flowage
rights, licenses, leaseholds, and real property interests of a similar nature); and good and
marketable title to all personal property owned by it; in each case free and clear of all liens,
encumbrances and defects except such as may be described in the Official Statement, the lien of the
Mortgage, permitted liens under the Mortgage or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of such property by the Company; and any real property and buildings held under lease by the Company are held by it
under valid, subsisting and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and buildings by the Company.

 

 

 

8. The Company is not a holding company, a registered holding company or an affiliate of a
registered holding company within the meaning of the Public Utility Company Holding Act of 1935, as
amended.

9. The Mortgage and the First Mortgage Bond conform in all material respects as to legal
matters to the descriptions thereof in the Official Statement.

Without having undertaken to determine independently the accuracy, completeness and fairness
of the statements contained in the Official Statement, nothing has come to our attention in
connection with our representation of the Company in respect of the issuance of the First Mortgage
Bond which leads us to believe that the information with respect to the Company contained in the
Official Statement (including Appendix A and the information incorporated therein by reference)
contains any untrue statement of a material fact or omits to state a material fact which is
required to be stated therein or which is necessary to make such information and descriptions, in
the light of the circumstances under which they were made, not misleading in any material respect.

The foregoing opinions are subject to the following qualifications:

(i) The opinions expressed in paragraphs 3 and 4 are subject to the qualifications that the
enforceability of the First Mortgage Bond are subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws of general application relating to or affecting
creditors’ rights, (ii) certain provisions of Pennsylvania law affecting the availability of
certain remedies, and (iii) the further qualification that the availability of specific
performance, injunctive relief or other equitable remedies is subject to the discretion of the
court before which any proceeding therefor maybe brought.

(ii) Our opinions are subject to limitations imposed by general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is considered in proceedings at law or in equity).

(iii) We express no opinion as to the enforceability with respect to any provisions purporting
to waive the effect of applicable laws and remedies and any provisions releasing any party from, or
requiring indemnification for, liability for gross negligence, recklessness or willful misconduct.

(iv) Any requirements in any of the documents specifying that provisions of a document may
only be waived in writing may not be enforced to the extent that an oral agreement or an implied
agreement by trade practice or course of conduct has been created modifying any provision of such
document.

 

 

 

(v) We express no opinion as to the applicability to the transactions contemplated by the
Company Documents of Section 548 of the Bankruptcy Code or any applicable state law relating to
fraudulent transfers and obligations.

(vi) Other applicable local, state and federal laws, regulations and ordinances, court
decisions and constitutional requirements may limit or render unenforceable certain of the rights
or remedies contained in the Company Documents, but in our opinion, none of the same would
materially impair the practical realization of the benefits intended to be provided by the Company
pursuant to the Company Documents.

(vii) Our opinion is limited in all respects to the laws of the Commonwealth in effect as of
the date hereof and we express no opinion as to the laws of any other jurisdiction.

(viii) This opinion is limited to the matters set forth herein, no opinion may be inferred or
implied beyond the matters expressly stated herein, and our statements contained in the opinion
portion of this letter must be read in conjunction with the assumptions, limitations, exceptions
and qualifications set forth in this letter.

(ix) The opinions herein are expressed as of the date hereof only and not as of some future
date. We undertake no responsibility to advise you of any change in law or new laws, regulations or
judicial decisions in the future. Nor do we assume any obligation to update or supplement this
opinion to reflect any facts or circumstances which may hereafter come to our attention. References
to “laws,” “regulations” and “judicial decisions” herein shall include only officially published
laws and regulations of the Commonwealth.

This opinion is solely for the benefit of each of you and the benefit of any subsequent holder
of the First Mortgage Bond or the Authority Bonds and may not be relied upon by any other person or
for any other purpose.

Very truly yours,

 

 

 

[Letterhead of Aqua Pennsylvania]

July 16, 2009

Pennsylvania Economic Development Financing Authority

400 North Street, 4th Floor

Harrisburg, PA 17120-0225

Jefferies & Company, Inc.

9 Orchard View

Chadds Ford, PA 19317

Ballard Spahr Andrews & Ingersoll, LLP

1735 Market Street, 51st Floor

Philadelphia, PA 19103

			
	          Re:	 	$58,000,000 principal amount of Pennsylvania Economic Development Financing
Authority Water Facilities Revenue Bonds (Aqua Pennsylvania, Inc. Project) Series A of
2009

Ladies and Gentlemen:

I am Senior Vice President-Law and Administration for Aqua Pennsylvania, Inc. (the “Company”).

Pursuant to Section 11(c)(iv) of the Bond Purchase Agreement dated June 30, 2009 (the
“Purchase Agreement”) among the Authority, the Underwriter and the Company (a/k/a Pennsylvania
Suburban Water Company, as successor by merger to Philadelphia Suburban Water Company) relating to
the Authority Bonds, I have been asked to render an opinion to you regarding certain matters
involving the Company. Capitalized terms used herein and not otherwise defined shall have the
definitions ascribed to such terms in the Purchase Agreement.

In rendering this opinion, I have assumed the following:

(i) the genuineness of all signatures (other than the signatures of the Company on the
Forty-fourth Supplemental Mortgage, as hereinafter defined);

(ii) the authenticity and completeness of all documents submitted to me as originals;

(iii) the conformity to original documents of all documents submitted to me as copies, and the
authenticity of the originals of such copies;

(iv) the entity executing the Mortgage as trustee is duly organized and validly existing, in
good standing under the laws of the jurisdiction of its organization, is properly qualified to do
business in all jurisdictions in which the business conducted by it makes such qualification necessary and has all necessary legal and corporate power and authority to enter into
and perform its obligations under the Mortgage;

 

 

 

(v) the due authorization, execution and delivery of the Mortgage by or on behalf of the party
thereto other than the Company;

(vi) the enforceability against each party thereto (other than the Company) of the Mortgage in
accordance with its respective terms; and

(vii) that the execution, delivery and performance of the Mortgage by the entity other than
the Company which is party thereto does not and will not conflict with, result in any breach of, or
constitute a default under any order, writ, injunction or decree of any court or governmental
authority, or any agreement, indenture or other instrument, to which any such party is a party or
by which it or its properties are bound, and that all necessary approvals, consents, permits,
registrations, filings or other notices to or grants of authority from any federal or local
governmental body necessary for the execution, delivery and performance of the Mortgage by each
party thereto (other than the Company) have been duly received or made, with all appeal periods
expired and no appeals taken.

I am making each of the foregoing assumptions with your permission and with the disclaimer
that we make no representation as to the accuracy of such assumptions, although I have no knowledge
that any such assumption is untrue.

In my opinion:

1. With such exceptions as are not material and do not materially interfere with the conduct
of the business of the Company: (a) the Company has all licenses, franchises, permits,
authorizations, rights, approvals, consents and order of all governmental authorities or agencies
necessary for the ownership or lease of the properties owned or leased by it and for the operation
of the business carried on by it as described in the Official Statement, and ail water rights,
riparian rights, easements, rights of way and other similar interests and rights described or
referred to in the Mortgage necessary for the operation of the business carried on by it as
described in the Official Statement; (b) except as otherwise set forth in the Official Statement,
all such licenses, franchises, permits, orders, authorizations, rights, approvals and consents are
in full force and effect; (c) to the best of my knowledge, except as otherwise set forth in the
Official Statement, there are no legal or governmental proceedings pending or, to my knowledge,
threatened that would result in a material modification, suspension or revocation thereof; and (d)
the Company has the legal power to exercise the rights of eminent domain for the purposes of
conducting its water utility operations.

2. The issue and sale of the Bonds; the issue and delivery of the First Mortgage Bond and the
compliance by the Company with all of the applicable provisions of the First Mortgage Bond and the
Mortgage; and the execution, delivery and performance by the Company of the Forty-fourth
Supplemental Mortgage, the Financing Agreement, the Purchase Agreement and the Continuing
Disclosure Agreement will not materially conflict with or result in a material breach of any of the
terms or provisions of, or constitute a material default under, or result in the

 

 

 

creation or imposition of any material lien, charge or encumbrance (other than the lien of the
Mortgage) upon any of the property or assets of the Company pursuant to the terms of, any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of the property or assets of
the Company is subject, nor will such action result in a violation of the provisions of the
Articles of Incorporation, as amended, or the Bylaws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having jurisdiction over the Company
or any of its property. No consent, approval, authorization, order, registration or qualification
of or with any court or any such regulatory authority or other governmental body not already
obtained is required for the issue and delivery of the First Mortgage Bond, the execution, delivery
and performance of the Purchase Agreement, the Financing Agreement, the Forty-fourth Supplemental
Mortgage, the First Mortgage Bond, and the Continuing Disclosure Agreement, or the consummation of
the other transactions contemplated by the Purchase Agreement or the Mortgage.

3. There are no legal or governmental proceedings pending to which the Company is a party or
of which any property of the Company is the subject, other than as set forth in the Official
Statement and other than litigation incident to the kind of business conducted by the Company,
wherein an unfavorable ruling, decision or finding is likely that would have a material adverse
effect on the financial position, stockholders’ equity or results of operations of the Company.

4. Each of the Indenture of Mortgage dated as of January 1, 1941 (the “Original Mortgage”),
between the Company and The Philadelphia Company for Insurance on Lives and Exacting Annuities (now
The Bank of New York Mellon Trust Company, N.A., as successor in interest), as trustee (the
“Trustee”) and the forty-four indentures supplemental thereto, including the Forty-fourth
Supplemental Indenture dated as of July 1, 2009 between the Company and the Trustee (the Original
Mortgage as so supplemented and amended, the “Mortgage”) was duly authorized, executed and
delivered by the Company and the Mortgage constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws
relating to creditors’ rights generally from time to time in effect, and subject, as to
enforceability, to general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law).

The foregoing opinions are subject to the following qualifications:

(i) The enforceability of the Mortgage, including, without limitation, any non judicial and
self-help remedies and waivers contained therein, may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws affecting the rights of
creditors generally and are subject to limitations imposed by general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is considered in proceedings at law or in equity), public policy and applicable
law which may limit the availability of the remedies provided for therein,

 

 

 

(ii) I express no opinion as to the adequacy of any notice with respect to the disposition of
any collateral. I also express no opinion as to the effectiveness or enforceability of provisions
relating to waivers of notice or waivers of other rights, severability, prepayment fees or
penalties, choice of law, or any provisions which release or limit the Company’s liability or
relate to cumulative remedies or, to the extent they purport to or would have the effect of
compensating the Company in amounts in excess of any actual loss suffered by the Company,
provisions relating to the payment of a default rate of interest.

(iii) I express no opinion as to enforceability with respect to any provisions in the Mortgage
executed by the Company purporting to waive the effect of applicable laws and remedies and any
provisions releasing any party from, or requiring indemnification for, liability for gross
negligence, recklessness or willful misconduct.

(iv) Requirements in the Mortgage specifying that provisions of the Mortgage may only be
waived in writing may not be enforced to the extent that an oral agreement or an implied agreement
by trade practice or course of conduct has been created modifying any provision of such Mortgage.

(v) My opinion is limited in all respects to laws of the Commonwealth of Pennsylvania in
effect as of the date hereof and we express no opinion as to the laws of any other jurisdiction.

(vi) This opinion is limited to the matters set forth herein, no opinion may be inferred or
implied beyond the matters expressly stated herein, and our statements contained in the opinion
portion of this letter must be read in conjunction with the assumptions, limitations, exceptions
and qualifications set forth in this letter.

(vii) The opinions herein are expressed as of the date hereof only and not as of some future
date. I undertake no responsibility to advise you of any change in law or new laws, regulations or
judicial decisions in the future nor do I assume any obligation to update or supplement this
opinion to reflect any facts or circumstances which may hereafter come to our attention. References
to “laws,” “regulations” and “judicial decisions” herein shall include only officially published
laws and regulations of the Commonwealth of Pennsylvania.

This opinion is solely for your benefit and may not be relied upon by any other person or for
any other purpose.

Very truly yours,

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