THIRTY-NINTH SUPPLEMENTAL INDENTURE

Indenture Agreement

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AQUA AMERICA INC | AQUA PENNSYLVANIA, INC. | J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION

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Title: THIRTY-NINTH SUPPLEMENTAL INDENTURE
Governing Law: Pennsylvania Date: 8/4/2005
Industry: Water Utilities

THIRTY-NINTH SUPPLEMENTAL
INDENTURE
, Parties: aqua america inc , aqua pennsylvania inc. , j.p. morgan trust company national association

<PAGE>

Prepared by and Return to: Exhibit 4.29

Mary T. Tomich, Esq.

Dilworth Paxson LLP

1735 Market Street

Philadelphia, PA 19103

215-575-7000

--------------------------------------------------------------------------------

THIRTY-NINTH SUPPLEMENTAL

INDENTURE

DATED AS OF MAY 1, 2005

INDENTURE OF MORTGAGE

DATED AS OF JANUARY 1, 1941

----------

AQUA PENNSYLVANIA, INC.

J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION

----------

<PAGE>

THIRTY-NINTH SUPPLEMENTAL INDENTURE dated as of May 1, 2005,

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 J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION, 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, J.P. Morgan Trust Company, National Association, 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 four

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, forty-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:

<TABLE>

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 Twenty-Ninth Supplemental 77,000,000

Series

6.35% Series due 2025 Thirtieth Supplemental 22,000,000

</TABLE>

<PAGE>

<TABLE>

1997 Medium Term Note Thirty-First Supplemental 65,000,000

Series

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

6.00% Subseries F due 2004 15,000,000

6.00% Series due 2029 Thirty-Second Supplemental 25,000,000

1999 Medium Term Note Thirty-Third Supplemental 222,3334,480

Series

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 15,000,000

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

</TABLE>

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, the Original Indenture and the first thirty-eight

supplemental indentures supplemental to the Original Indenture were duly

recorded in the 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

<PAGE>

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 thirty-eight indentures supplemental thereto were recorded in

the 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 on Exhibit B hereto;

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 Thirty-Ninth Supplemental Indenture, three

series of bonds to be designated "First Mortgage Bonds, 5.00% Series due 2037"

(herein referred to as the "5.00% Series due 2037") to be limited in aggregate

principal amount to $24,165,000, to bear interest at the rate of 5.00% per

annum, and to mature on November 1, 2037, "First Mortgage Bonds, 5.00% Series

due 2038" (herein referred to as the "5.00% Series due 2038") to be limited in

aggregate principal amount to $25,375,000, to bear interest at the rate of 5.00%

per annum, and to mature on November 1, 2038, and "First Mortgage Bonds, 5.00%

Series due 2036" (herein referred to as the "5.00% Series due 2036" and,

together with the 5.00% Series due 2037 and the 5.00% Series due 2038, the

"Bonds") to be limited in aggregate principal amount to $21,770,000, to bear

interest at the rate of 5.00% per annum, and to mature on November 1, 2036, each

series of Bonds 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 Berks, Bucks, 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 May 1, 2005 (the "Financing

Agreement") between the Company and the Delaware County Industrial Development

Authority, a Pennsylvania body politic and corporate (the "Authority"), and

which are described in Exhibit A thereto (which facilities, less any deletions

therefore 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 2005 in the aggregate principal amount of $49,540,000 (the

"Authority Series A Bonds"); and

WHEREAS, the Delaware County Industrial Development Authority

(the "Authority") previously issued its Water Facilities Revenue Bonds

(Philadelphia Suburban Water Company Project) Series of 1995 (the "Prior

Bonds"), currently outstanding in the aggregate principal amount of $22,000,000,

to finance certain capital costs of various modifications to and expansions and

replacements of its water distribution, treatment and related operating systems

throughout the Counties of Bucks, Chester, Delaware and Montgomery (the "Prior

Bonds Facilities"), on behalf of Philadelphia Suburban Water Company

(predecessor to the Company); and

<PAGE>

WHEREAS, in order to finance the refunding of the Prior Bonds,

the Company has requested the Authority to issue a new series of bonds to be

known as the Authority's Water Facilities Revenue Refunding Bonds (Aqua

Pennsylvania, Inc. Project), Series B of 2005 in the aggregate principal amount

of $21,770,000 (the "Authority Series B Bonds" and, together with the Authority

Series A Bonds, the "Authority Bonds"); and

WHEREAS, in connection with the refunding of the Prior Bonds,

the 6.35% Series due 2025 will be cancelled; 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 May 1, 2005 (the "Authority Indenture"), between the

Authority and Wachovia Bank, National Association, as trustee (the "Authority

Trustee"); and

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 Trustee, 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

<PAGE>

WHEREAS, the Company, by proper corporate action, has duly

authorized the creation of the 5.00% Series due 2037, the 5.00% Series due 2038

and the 5.00% Series due 2036 (to be issued in accordance with the terms and

provisions of the Original Indenture and indentures supplemental thereto,

including this Thirty-Ninth Supplemental Indenture, and to be secured by said

Original Indenture and indentures supplemental thereto, including this

Thirty-Ninth Supplemental Indenture) and has further duly authorized the

execution, delivery and recording of this Thirty-Ninth Supplemental Indenture

setting forth the terms and provisions of the 5.00% Series due 2037, the 5.00%

Series due 2038 and the 5.00% Series due 2036 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 2037]

No. R-1 $24,165,000

AQUA PENNSYLVANIA, INC.

(Incorporated under the Laws of the Commonwealth

of Pennsylvania)

First Mortgage Bond, 5.00% Series Due 2037

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 Delaware County Industrial Development

Authority or its registered assigns, on the 1st day of November, 2037, at the

designated office of J.P. Morgan Trust Company, National Association

(hereinafter called the "Trustee") in Philadelphia, Pennsylvania, the sum of

Twenty-Four Million One Hundred Sixty-Five Thousand 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 May 19, 2005, from the date hereof) until the principal hereof shall

become due and payable, at the rate of five percent (5.00%) per annum, payable

semiannually in like coin or currency on the first day of May and the first day

of November in each year, commencing November 1, 2005 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.

<PAGE>

The interest so payable will (except as otherwise provided in

the Thirty-Ninth 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 J.P. Morgan Trust Company, National

Association), as 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 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 "Thirty-Ninth Supplemental Indenture" dated as of May 1, 2005, and

designated therein as "First Mortgage Bonds, 5.00% Series due 2037" (the

"Bonds").

Concurrently herewith the Company is issuing is "First

Mortgage Bonds, 5.00% Series due 2038" in the aggregate principal amount of

$25,375,000 (the "5.00% Series due 2038") and its "First Mortgage Bonds, 5.00%

Series due 2036" in the aggregate principal amount of $21,770,000 (the "5.00%

Series due 2036" and, together with the 5.00% Series due 2037 and the 5.00%

Series due 2038, the "2005 Bonds").

<PAGE>

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 2005 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 May 1, 2005, between the Delaware County

Industrial Development Authority, a Pennsylvania body politic and corporate (the

"Authority"), and the Company, which Authority Bonds are being issued to finance

(1) 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 Berks, Bucks,

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 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"), and (2) the refunding of the Authority's Water Facilities Revenue

Bonds (Philadelphia Suburban Water Company Project), Series of 1995, previously

issued by the Authority on behalf of Philadelphia Suburban Water Company

(predecessor to the Company) (the "Refunding Project"). The Facilities are to be

financed through the sale of the Authority's Water Facilities Revenue Bonds

(Aqua Pennsylvania, Inc. Project), Series A of 2005, in the aggregate principal

amount of $49,540,000, of which $24,165,000 are due November 1, 2037 and

$25,375,000 are due November 1, 2038 (the "Authority Series A Bonds"), and the

Refunding Project is to be financed through the sale of the Authority's Water

Facilities Revenue Refunding Bonds (Aqua Pennsylvania, Inc. Project), Series B

of 2005, in the aggregate principal amount of $21,770,000 (the "Authority Series

B Bonds" and, together with the Authority Series A Bonds, the "Authority

Bonds").

<PAGE>

The Authority Bonds are to be issued under a Trust Indenture,

dated as of May 1, 2005 (the "Authority Indenture") between the Authority and

Wachovia 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 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 November 1, 2015, 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 Series A

Bonds are subject to extraordinary optional redemption pursuant to Section

7.01(a)(ii) of the Authority Indenture.

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 Series A 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 9.01(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.

<PAGE>

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 J.P. Morgan Trust Company, National Association, as

Trustee under the Indenture, or a successor trustee thereunder, shall have

signed the certificate of authentication endorsed hereon.

<PAGE>

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 ________, 2005.

Attest: AQUA PENNSYLVANIA, INC.

By:

------------------------ -------------------------------

(Assistant) Secretary Vice President and Treasurer

(Form of Trustee's Certificate)

This Bond is one of the Bonds, of the series designated

therein, referred to in the within-mentioned Thirty-Ninth Supplemental

Indenture.

J.P. MORGAN TRUST COMPANY,

NATIONAL ASSOCIATION

By:

--------------------------------

Authorized Signer

[Form of 5.00% Series due 2038]

No. R-1 $25,375,000

AQUA PENNSYLVANIA, INC.

(Incorporated under the Laws of the Commonwealth

of Pennsylvania)

First Mortgage Bond, 5.00% Series Due 2038

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 Delaware County Industrial Development

Authority or its registered assigns, on the 1st day of November, 2038, at the

designated office of J.P. Morgan Trust Company, National Association

(hereinafter called the "Trustee") in Philadelphia, Pennsylvania, the sum of

Twenty-Five Million Three Hundred Seventy-Five Thousand Dollars in such coin or