Amendment Agreement ($4,500,000) (Cln)  (M1228589.DOC;1)


EXHIBIT 10.5




AMENDMENT AGREEMENT




This AMENDMENT AGREEMENT (the "Agreement") dated as of this 19th day of June, 2008, by and among PENNICHUCK CORPORATION, a New Hampshire corporation with a principal place of business at 25 Manchester Street, Merrimack, New Hampshire 03054 ("PC") and PENNICHUCK EAST UTILITY, INC., a New Hampshire corporation with a principal place of business at 4 Water Street, P.O. Box 488, Nashua, New Hampshire 03061-0448 ("PEU") (PC and PEU are on occasion referred to individually and collectively as the "Borrower")  and BANK OF AMERICA, N.A. (successor by merger to FLEET NATIONAL BANK), a national bank organized under the laws of the United States with a place of business at 1155 Elm Street, Manchester, New Hampshire 03101  (the "Bank").




W I T N E S S E T H




WHEREAS, pursuant to the terms of a certain Loan Agreement between the Borrower and the Bank dated April 8, 1998, as amended (the "Loan Agreement") and certain loan documents referenced therein or contemplated thereby (collectively the "Loan Documents"), the Bank has made a certain $4,500,000 acquisition line of credit loan to the Borrower (the "Acquisition Line of Credit"); and




WHEREAS, the Borrower has requested and the Bank has agreed to, among other things, (i) modify certain financial covenants; and (ii) amend the Loan Documents in certain other respects.




NOW, THEREFORE, in consideration of the foregoing and mutual covenants and agreements therein contained, the receipt and adequacy of which are hereby acknowledged, the parties covenant, stipulate, and agree as follows:




1.

Representations and Warranties of the Borrower.  Each Borrower represents and warrants to the Bank as follows:




(a)

The representations, warranties and covenants of each Borrower made in the Loan Documents, as each may hereinafter be amended or modified, remain true and accurate and are hereby reaffirmed as of the date hereof.




(b)

Each Borrower has performed, in all material respects, all obligations to be performed by it to date under the Loan Documents, as each may hereinafter be amended or modified, and no event of default exists thereunder.




(c)

Each Borrower is a corporation duly organized, qualified, and existing in good standing under the laws of the State of New Hampshire and in all other jurisdictions in which the character of the property owned or the nature of the existing business conducted by such Borrower require its qualification as a foreign corporation.














(d)

The execution, delivery, and performance of this Agreement and the documents relating hereto (the "Amendment Documents") are within the power of each Borrower and are not in contravention of law, either Borrower's Articles of Incorporation, By-Laws, or the terms of any other documents, agreements, or undertaking to which any Borrower is a party or by which any Borrower is bound.  No approval of any person, corporation, governmental body, or other entity not provided herewith is a prerequisite to the execution, delivery, and performance by any Borrower or any of the documents submitted to the Bank in connection with the Amendment Documents to ensure the validity or enforceability thereof, or upon execution by the Bank to ensure the validity or enforceability thereof.




(e)

When executed on behalf of the Borrower, the Amendment Documents will constitute a legally binding obligation of the Borrower, enforceable in accordance with their terms; provided, that the enforceability of any provisions in the Amendment Documents, or of any rights granted to the Bank pursuant thereto may be subject to and affected by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and that the right of the Bank to specifically enforce any provisions of the Amendment Documents is subject to general principles of equity.




2.

Amendment to Loan Agreement.  The Loan Agreement shall be amended as follows:




(a)

 Section 4.18(b) of Article IV of the Loan Agreement is hereby amended by   deleting it in its entirety and replacing it with the following:




"(b)

Tangible Net Worth.  Maintain on a consolidated basis Tangible Net Worth equal to at least $37,000,000 plus any new equity issuance after December 31, 2007.  "Tangible Net Worth" means, as prepared in accordance with GAAP, the value of PC's total assets (including deferred land costs, deferred charges and other regulatory assets that have been deemed recoverable by the New Hampshire Public Utilities Commission (the "NHPUC"), leaseholds and leasehold improvements and reserves against assets but excluding goodwill, patents, trademarks, trade names, organization expenses, deferred marketing expenses, and monies due from affiliates, officers, directors, employees, shareholders, members or managers of PC, all only to the extent not otherwise deemed recoverable by the NHPUC) less total liabilities, including but not limited to accrued and deferred income taxes, but excluding the non-current portion of Subordinated Liabilities.  "Subordinated Liabilities" means liabilities subordinated to PC's obligations to the Bank in a manner acceptable to the Bank in its sole discretion.". 




(b)

The terms and conditions of the Loan Agreement, as amended hereby, are hereby ratified and confirmed.




3.

Conditions Precedent.  The obligations of the Bank hereunder are subject to fulfillment of the following conditions precedent:









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(a)

The Borrower shall execute and deliver to the Bank this Agreement and the Amendment Documents.




(b)

The Bank shall have received (i) certified copies of instruments evidencing all corporate action taken by the Borrower to authorize the execution and delivery of this Agreement and the Amendment Documents and (ii) such other documents, legal opinions, papers and  information as the Bank shall reasonably require including all items listed on the Closing Agenda attached hereto as Exhibit A.




(c)

The Borrower shall pay the Bank a fee of $15,000 at or prior to closing which fee shall also be for the amendment to the loan documents related to two lines of credit in the aggregate maximum principal amount of $16,000,000 from the Bank to PC which amendment shall close simultaneously herewith.




4.

Future References.  All references to the Loan Documents shall hereafter refer to such documents, as amended and shall expressly include, without limitation, this Agreement and all other Amendment Documents.




5.

Loan Documents.  The Borrower shall deliver this Agreement to the Bank and this Agreement shall be included in the term "the Loan Documents" in the Loan Agreement.  The Loan Documents, and the collateral granted to the Bank therein, shall secure the Loan (as defined in the Loan Agreement) made pursuant to the Loan Agreement, as amended, and the payment and performance of the Acquisition Line of Credit, as amended.




6.

Continuing Effect.  The provisions of the Loan Documents, as modified herein, shall remain in full force and effect in accordance with their terms and are hereby ratified and confirmed.




7.

General.




(a)

The Borrower shall execute and deliver such additional documents and do such other acts as the Bank may reasonably require to implement the intent of this Agreement fully.




(b)

The Borrower shall pay all costs and expenses, including, but not limited to, reasonable attorneys' fees incurred by the Bank in connection with this Agreement.  The Bank, at its option, but without any obligation to do so, may advance funds to pay any such costs and expenses that are the obligation of the Borrower, and all such funds advanced shall bear interest at the highest rate provided in the Note, as amended.




(c)

This Agreement may be executed in several counterparts by each Borrower and the Bank, each of which shall be deemed an original but all of which together shall constitute one and the same Agreement.




[SIGNATURE PAGES FOLLOW]






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WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth above.







			
	         

	BANK OF AMERICA, N.A.


	 
	 
	  


	 
	 
	 

	/s/ Paula Belanger

	By:  

	/s/ Kenneth R. Sheldon


	Witness

	 
	    Kenneth R. Sheldon, Its Duly


	 
	 
	    Authorized Senior Vice President







			
	         

	PENNICHUCK CORPORATION


	 
	 
	  


	 
	 
	 

	/s/ Joanne McDonald

	By:  

	/s/ William D. Patterson


	Witness

	 
	    William D. Patterson, Its Duly


	 
	 
	    Authorized Senior Vice President


	 
	 
	    Treasurer and Chief Financial Officer







			
	         

	PENNICHUCK EAST UTILITY, INC.


	 
	 
	  


	 
	 
	 

	/s/ Joanne McDonald

	By:  

	/s/ William D. Patterson


	Witness

	 
	William D. Patterson, Its Duly


	 
	 
	Authorized Vice President, Treasurer


	 
	 
	and Chief Financial Officer















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EXHIBIT A




CLOSING AGENDA




Amendment to Financings

from BANK OF AMERICA, N.A. (the "Bank")

to PENNICHUCK CORPORATION, PENNICHUCK EAST UTILITY, INC.

and PENNICHUCK WATER WORKS, INC.




June __, 2008




BORROWER'S AND GUARANTOR'S DOCUMENTS (Items 1-8 to be Delivered by Borrower and Counsel)




1.

PENNICHUCK CORPORATION - Certificate of Existence




2.

PENNICHUCK CORPORATION - Secretary's Certificate including Articles, Bylaws, Incumbency Certificate and Board of Directors Resolution (Bring down certificate)




3.

PENNICHUCK EAST UTILITY, INC. - Certificate of Existence




4.

PENNICHUCK EAST UTILITY, INC. - Secretary's Certificate including Articles, Bylaws, Board of Director's Resolutions and Incumbency Certificate (Bring down certificate)




5.

PENNICHUCK WATER WORKS, INC. - Certificate of Existence




6.

PENNICHUCK WATER WORKS, INC. - Secretary's Certificate including Articles, Bylaws, Incumbency Certificate and Board of Directors Resolution (Bring down certificate)




7.

Original Stock Certificate(s) with Separate Stock Powers Endorsed in Blank (Pennichuck Water Service Corporation)




8.

Disbursement Authorization (form provided) and Payment of Bank fees and expenses




9.

Opinion of Counsel [Waived]




BANK'S DOCUMENTS (To be Prepared by Bank and its Counsel)




10.

Amendment Agreement ($12,000,000 and $4,000,000 Line of Credit to PC)




11.

RSA 399-B Disclosure Statement ($12,000,000 and $4,000,000 Line of Credit to PC)




12.

Amendment Agreement ($4,500,000 Line of Credit to PC and PEU)




13.

RSA 399-B Disclosure Statement ($4,500,000 Line of Credit to PC and PEU)