Exhibit 4.1





Exhibit 4.1







March 11, 2009




	 	 	 
	Mario J. Gabelli 

GGCP, Inc. 

GAMCO Investors, Inc. 

Gabelli Funds, LLC 

GAMCO Asset Management Inc. 

Teton Advisors, Inc.
	 	Gabelli Securities, Inc. 

Gabelli & Company, Inc. 

MJG Associates, Inc. 

Gabelli Foundation, Inc. 

LICT Corporation
	 
	One Corporate Center 

Rye, New York 10580-1435

Attention: Mario J. Gabelli
	 	 
	 
	Re: Pennichuck Corporation
	 	 






Gentlemen:



Reference is made to the Rights Agreement dated April 20, 2000 between Pennichuck Corporation, a
New Hampshire corporation (“Pennichuck”) and American Stock Transfer and Trust Company, as rights
agent, as amended (the “Rights Plan”). Capitalized terms used herein but not otherwise defined
herein shall have the respective meanings ascribed to them in the Rights Plan. Pennichuck hereby
represents and warrants that it has amended the Rights Plan effective as of March 2, 2009 (the
“Amendment”), which Amendment grants the Board of Directors of Pennichuck the right, in its sole
discretion, to exempt any shareholder from the definition of “Acquiring Person” under the Rights
Plan, subject to terms and conditions acceptable to the Board of Directors of Pennichuck. For the
avoidance of doubt, the Amendment shall not, in and of itself, constitute an exemption for any
shareholder from said definition. Pennichuck agrees that it will not take the position that the
Rights Plan has been triggered on or before the execution of this letter agreement.



Pursuant to the first paragraph of Section 1, the definition of “Acquiring Person,” and Section 27,
Supplements and Amendments, contained in the Rights Plan as amended, in consideration for the
representations and agreements of the Institutional Shareholders set forth herein, and subject in
all respects to the “Conditions” (as hereinafter defined), immediately as of the Effective Date
hereof (as defined herein), Pennichuck hereby exempts the addressees listed above including without
limitation any of their current and/or future Affiliates and Associates (each, an “Institutional
Shareholder” and collectively the “Institutional Shareholder Group”) from the definition of
“Acquiring Person” contained in the Rights Plan, which exemption is expressly subject to all of the
terms and conditions specified in this letter agreement.


 


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For the avoidance of doubt, said exemption will not apply to any Institutional Shareholder to the
extent any such shareholder ceases to be part of a group (as defined in the Exchange Act) with
GAMCO Investors, Inc. (“GAMCO”) and/or GGCP, Inc. with respect to the ownership of outstanding
shares of common stock of Pennichuck (“Common Stock”). Pennichuck hereby agrees that it will not
otherwise amend the Rights Plan in any manner with respect to the exemption granted to each
Institutional Shareholder and the Institutional Shareholder Group herein without the prior written
consent of GAMCO; provided that this provision shall not apply at any time after the collective
Beneficial Ownership of the Institutional Shareholder Group falls below 5% of the outstanding
shares of Common Stock.



This exemption is subject to the following conditions (“Conditions”):




	 	1.	 	The Institutional Shareholder Group may not collectively become a Beneficial Owner of
20% or more of the outstanding shares of Common Stock, except if such change in Beneficial
Ownership results solely from a decrease in the aggregate number of shares of Common Stock
outstanding due to a purchase and/or acquisition of shares by Pennichuck; provided however,
that if such share purchase or acquisition of shares by Pennichuck causes an Institutional
Shareholder and/or the Institutional Shareholder Group to become the Beneficial Owner (as
defined in the Rights Plan) of an additional 1% or more of the outstanding Common Stock of
Pennichuck, then such Institutional Shareholder and/or Institutional Shareholder Group
shall be deemed to be an “Acquiring Person” under the Rights Plan.






	 	2.	 	Each Institutional Shareholder must (a) meet the eligibility requirements of Rule
13d-1(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
with respect to passive beneficial ownership of shares of Pennichuck’s Common Stock or (b)
meet the eligibility requirements of Rule13d-1(c)(1) under the Exchange Act with respect to
passive Beneficial Ownership of shares of Pennichuck’s Common Stock, and that it otherwise
has no intent, individually or as part of a group or in concert with others, to seek
control of Pennichuck. If any Institutional Shareholder no longer meets requirements (a)
or (b) above, the Rights Plan will not be triggered if such Institutional Shareholder, and
collectively the Institutional Shareholder Group, become(s) the Beneficial Ownership of
less than 15% of the Common Stock outstanding within two months from the date such
Institutional Shareholder has actual knowledge that it no longer meets requirements (a) or
(b) above.






	 	3.	 	As of the Effective Date hereof, GAMCO, together with the Institutional Shareholder
Group, hereby withdraws its shareholder proposal and supporting statement set forth in its
letter dated August 15, 2008 to include a resolution in Pennichuck’s proxy statement for
the 2009 Annual Meeting of Shareholders requesting that the Board of Directors of
Pennichuck redeem the preferred rights issued pursuant to the Rights Plan, as amended.






	 	4.	 	As of the Effective Date hereof, GAMCO, together with the Institutional Shareholder
Group, hereby withdraws its Notice of Intent dated November 24, 2008 to nominate three
individuals for election as Directors of Pennichuck at Pennichuck’s 2009 Annual Meeting of
Shareholders.






	 	5.	 	From the Effective Date hereof, except as otherwise specified in this letter agreement,
and through the completion of the 2009 Pennichuck Annual Meeting of Shareholders, neither
GAMCO nor any of the Institutional Shareholders, nor any of their Affiliates, will,
directly or indirectly, (i) solicit proxies or consents for the voting of any voting or
other securities of Pennichuck or otherwise become a “participant,” directly or indirectly,
in any “solicitation” of “proxies” or consents to vote, or become a “participant” in any
“election




 


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contest” involving Pennichuck or Pennichuck’s securities (all terms used herein and defined
in Regulation 14A under the Exchange Act, having the meanings assigned to them therein),
(ii) seek to advise or influence any person with respect to the voting of any securities of
Pennichuck, (iii) initiate, propose or otherwise “solicit” Pennichuck shareholders for the
approval of shareholder proposals and/or the nomination and/or election of directors, (iv)
otherwise communicate with Pennichuck’s shareholders or others pursuant to Rule
14a-1(l)(2)(iv) under the Exchange Act, (v) otherwise engage in any course of conduct with
the purpose of causing shareholders of Pennichuck to vote contrary to the recommendation of
the Board on any matter presented to Pennichuck’s shareholders for their vote or challenging
the policies of Pennichuck or (vi) otherwise act, directly or indirectly, alone or in
concert with others, to seek to control or influence the management, the Board, or the
policies or affairs of Pennichuck. Each of the Institutional Shareholders further agrees
that at Pennichuck’s 2009 Annual Meeting of Shareholders or at any adjournment or
postponement thereof (the “2009 Annual Meeting”), such Institutional Shareholder shall (1)
appear at each such meeting, in person or by proxy, and thereby cause all of the shares of
Pennichuck common stock that the Institutional Shareholder is entitled to vote at such
meeting to be counted as present thereat for purposes of calculating a quorum; and (2) vote
(or cause to be voted) all of the shares of Pennichuck common stock that the Institutional
Shareholder is entitled to vote at such meeting in favor of the election as directors of
those persons nominated by the Pennichuck Board of Directors. For purposes of this letter
agreement, “Affiliate” means, with respect to any person, any other person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is under
common control with, such first person and any employees, officers and partners of GAMCO
and/or any of the Institutional Shareholders. Each GAMCO Nominee (as defined below) shall
not be deemed an Affiliate for purposes of this letter agreement, and nothing in this letter
agreement restricts the ability of any GAMCO Nominee, as either a nominee or director, to
take any and all actions necessary or desirable, including those specified in this Condition
5. Nothing in this Condition 5 restricts the ability of GAMCO, any Institutional
Shareholder, or their Affiliates to continue filing amendments to its Schedule 13D or to
make other accurate filings required by law with respect to any matter covered by this
letter agreement.




	 	6.	 	Regarding Pennichuck’s 2009 Annual Meeting of Shareholders, as soon as practicable
after the Effective Date (as defined below) of this letter agreement, GAMCO hereby also
agrees to amend its Schedule 13D filing(s), and those of the Institutional Shareholder
Group (if required), with respect to Conditions 3 and 4 as set forth herein.





This letter agreement is subject to the following conditions (“Conditions”) with respect to
Pennichuck:




	 	7.	 	Pennichuck represents and warrants that, as of the Effective Date of this letter
agreement, Pennichuck’s Board of Directors has adopted a resolution increasing the size of
the Board to 11 directors in accordance with Article IX of Pennichuck’s Restated Articles
of Incorporation and Article III, Section 1 of its By-Laws; provided, however, that this
resolution by its terms shall not be effective until Pennichuck’s 2009 Annual Meeting of
Shareholders on May 6, 2009. Furthermore, as of the Effective Date of this letter
agreement, Pennichuck’s Board of Directors has adopted a resolution nominating Clarence A.
Davis and Michael I. German to the Board of Directors, which resolution by its terms is
effective only upon the Effective Date. Pennichuck shall use its best efforts to cause Mr.
Davis and Mr. German to be elected to the Board of Directors of Pennichuck at the 2009
Annual Meeting by causing Mr. Davis and Mr. German to be




 


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named in the proxy statement, the proxy and the ballot for the 2009 Annual Meeting as part
of the Pennichuck Board of Directors proposed slate of nominees for election at the 2009
Annual Meeting; the Pennichuck Board of Directors shall recommend in its proxy and the
ballot that the shareholders vote to elect Messrs. Davis and German at the 2009 Annual
Meeting, each for a three-year term commencing from the close of the 2009 Annual Meeting;
and subject to its fiduciary duties, Pennichuck shall not, and shall use all commercially
reasonable efforts to cause its directors, officers and agents not to, make any statement
inconsistent with such recommendation.




	 	8.	 	If, prior to the 2012 Annual Meeting of Shareholders of Pennichuck either Mr. Davis or
Mr. German is unable or unwilling to serve as a director, then GAMCO or any Institutional
Shareholder may nominate one or more candidates for election as a replacement director,
subject to the approval of Pennichuck’s Board of Directors, whose approval shall not be
unreasonably withheld, in accordance with the Board’s published Corporate Governance and
Nominating policies and procedures; provided that this Condition shall not apply at any
time after the collective Beneficial Ownership of the Institutional Shareholder Group has
fallen below 5% of the outstanding shares of Common Stock.






	 	9.	 	Pennichuck agrees that each of Mr. Davis and Mr. German (or any replacement thereof)
(each, a “GAMCO Nominee”), upon election or appointment to the Board, will serve as an
integral member of the Board and will be governed by the same protections and obligations
regarding confidentiality, conflicts of interest, fiduciary duties, trading and disclosure
policies, and other governance guidelines, and will have the same rights and benefits,
including with respect to insurance coverage, indemnification and contribution rights,
exculpation, advancement of expenses, and compensation and fees, access to personnel and
information as are applicable to all independent directors of Pennichuck. So long as any
GAMCO Nominee is a member(s) of the Board, the Corporate Governance and Nominating
Committee in good faith will recommend each GAMCO Nominee to serve on any committee or
committees of the Board which it determines to be appropriate taking into account each of
their specific backgrounds.






	 	10.	 	To the extent practicable, both Pennichuck and the Institutional Shareholder Group
shall provide at least two (2) days’ notice to the other party prior to issuing any press
release or other written public announcement with respect to this letter agreement or any
GAMCO Nominee; provided, however, that Pennichuck or any Institutional Shareholder may
issue any such press release or make such written public statements and/or filings as
Pennichuck and/or such Institutional Shareholder determines in its sole discretion, upon
the advice of counsel, is required by law or the rules or regulations of Nasdaq or other
regulatory authority.





Each Institutional Shareholder hereby agrees to comply with Conditions 1-6, and Pennichuck hereby
agrees to comply with Conditions 7-10, as specified above in this letter agreement. If Pennichuck
believes that the Institutional Shareholder Group or any Institutional Shareholder fails to satisfy
one or more of the Conditions, Pennichuck shall give the Institutional Shareholder Group or such
Institutional Shareholder a written notice describing in reasonable detail the nature of such
failure to satisfy. Thereafter, the Institutional Shareholder Group or such Institutional
Shareholder shall have the right to plead its case in writing to Pennichuck’s Board of Directors
within 15 calendar days from its receipt of the first written notice from Pennichuck, and the
Institutional Shareholder Group or such Institutional Shareholder shall be deemed not to have
failed to satisfy such Condition until Pennichuck’s Board of Directors thereafter determines in
good faith, with the advice of outside legal counsel, that such a failure exists and provides



 


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written notice to the Institutional Shareholder Group or such Institutional Shareholder thereof in
writing (the “second written notice”). The exemption of each of the Institutional Shareholders and
of the Institutional Shareholder Group, taken together, from the definition of “Acquiring Person”
in the Rights Plan shall terminate and be of no further effect without any further action by
Pennichuck at 5:00 p.m., Eastern Time on the fifteenth (15th) Business Day following the
date of the second written notice, or such later time and date as Pennichuck’s Board of Directors
may establish.



Each of the parties hereto represents and warrants to the other party that:



(i) such party has all requisite authority and power to execute and deliver this letter
agreement and to consummate the transactions contemplated hereby,



(ii) the execution and delivery of this letter agreement as of the Effective Date hereof and
the consummation of the transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of Pennichuck, GAMCO and each Institutional Shareholder, and by all other
required action on the part of such party and no other proceedings on the part of such party are
necessary to authorize the execution and delivery of this letter agreement or to consummate the
transactions contemplated hereby,



(iii) the letter agreement has been duly and validly executed and delivered by such party and
constitutes the valid and binding obligation of such party enforceable against such party in
accordance with their respective terms, and



(iv) this letter agreement will not result in a violation of any terms or provisions of any
agreements to which such person is a party or by which such party may otherwise be bound or of any
law, rule, license, regulation, judgment, order or decree governing or affecting such party.



The parties hereto acknowledge, warrant and represent that they have carefully read this letter
agreement, understand it, have consulted with and received the advice of counsel regarding this
letter agreement, agree with its terms, and freely, voluntarily and knowingly execute it.



This letter agreement shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and the respective successors, personal representatives and assigns of the parties
hereto.



This letter agreement contains the entire agreement between the parties with respect to the subject
matter hereof and thereof and supersedes all prior and contemplated arrangements and understandings
with respect thereto.



All notices and other communications required or permitted hereunder shall be effective upon
receipt and shall be in writing and may be delivered in person, by telecopy, electronic mail,
express delivery service or U.S. mail, in which event it may be mailed by first-class, certified or
registered, postage prepaid, addressed to the party to be notified at the respective addresses set
forth below, or at such other addresses which may hereinafter be designated in writing:


If to Pennichuck:



Pennichuck Corporation

25 Manchester Street, PO Box 1947

Merrimack, NH 03054

Attention: President & CEO




 


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with a copy to:



Pennichuck Corporation

25 Manchester Street, PO Box 1947

Merrimack, NH 03054

Attention: General Counsel & Corporate Secretary



If to GAMCO and/or the Institutional Shareholder Group:



GAMCO Investors, Inc.

One Corporate Center

Rye, New York 10580-1435

Attention: President



with a copy to:



GAMCO Investors, Inc.

One Corporate Center

Rye, New York 10580-1435

Attention: Director of Regulatory Affairs




This letter agreement shall be deemed to be a contract made under the laws of the State of New
Hampshire and for all purposes shall be governed by and construed in accordance with the laws or
such state applicable to contracts to be made and performed entirely within such state, without
giving effect to the principles of conflict of laws thereof.



Whenever possible, each provision of this letter agreement shall be interpreted in such manner as
to be effective and valid, but if any provision of this letter agreement is held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this letter agreement.



It is hereby agreed and acknowledged that it will be impossible to measure in money the damages
that would be suffered if the parties fail to comply with any of the obligations herein imposed on
them and that in the event of any such failure, an aggrieved person will be irreparably damaged and
will not have an adequate remedy at law. Any such person, therefore, shall be entitled to
injunctive relief, including specific performance, to enforce such obligations, without the posting
of any bond or other security, and, if any action should be brought in equity to enforce any of the
provisions of this letter agreement, none of the parties hereto shall raise the defense that there
is an adequate remedy at law.



Each party hereto shall do and perform or cause to be done and performed all such further acts and
things and shall execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this letter agreement and the consummation of the transactions
contemplated hereby.



This letter agreement may be executed in any number of counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument. This letter
agreement shall continue in full force and effect until it is terminated by mutual written
agreement of the parties signed by Pennichuck, GAMCO and the Institutional Shareholder Group;
provided, however, that either GAMCO / the Institutional Shareholder Group or



 


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Pennichuck may terminate this letter agreement (i) without cause at any time after the collective
Beneficial Ownership of the Institutional Shareholder Group falls below 5% of the outstanding
shares of Common Stock; (ii) immediately for cause in the event the other party has breached the
terms of one of its respective Conditions set forth above and/or any of its other material
obligations set forth in this letter agreement, if said breach is not remedied within 15 days
following the breaching party’s receipt of written notice of such breach from the other party; or
(iii) immediately for cause by Pennichuck if the procedures set forth in the paragraph after
Condition 10 have been complied with, and the time periods so provided have passed and the
exemption granted to any Institutional Shareholder and collectively to the Institutional
Shareholder Group have been terminated. Upon termination of this letter agreement for any reason,
all provisions of this letter agreement shall become null and void and have no further force and
effect; provided however that Conditions 9 and 10 and the immediately preceding paragraph of this
letter agreement shall survive any such termination.



The effective date of this letter agreement (“Effective Date”) shall be the signature date of the
last party to sign this letter agreement but in no event earlier than March 11, 2009.



[Signature Page Follows]




 


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	 	Sincerely,





PENNICHUCK CORPORATION

 	 
	 	By:  	/s/ Duane C. Montopoli
 	 
	 	 	Duane C. Montopoli, President & CEO 	 
	 
	 	Date: March 18, 2009	 





Agreed and acknowledged:



	 	 	 	 	 
	GGCP, INC 

MARIO J. GABELLI 

MJG ASSOCIATES, INC.

GABELLI FOUNDATION, INC. 

LICT CORPORATION	 	GAMCO ASSET MANAGEMENT INC. 

GAMCO INVESTORS, INC. 

GABELLI SECURITIES, INC. 

GABELLI FUNDS, LLC
	By: 	/s/ Douglas R. Jamieson	 	By: 	/s/ Douglas R. Jamieson
	 	Douglas R. Jamieson

Attorney-in-Fact	 	 	Douglas R. Jamieson 

President & Chief Operating Officer 

     GAMCO Investors, Inc.
	Date: March 17, 2009	 	 	President — GAMCO Asset Management Inc. 

President — Gabelli Securities, Inc. 

President & Chief Operating Officer & Sole 

     Member Gabelli Funds, LLC
	 	 	Date: March 17, 2009
	TETON ADVISORS, INC.

GABELLI & COMPANY, INC.	 
	By: 	/s/ Bruce N. Alpert	 	 	 
	 	Bruce N. Alpert

President — Teton Advisors, Inc.

Vice President — Gabelli & Company, Inc. 	 	 	 
	Date: March 17, 2009	 	 	 






 


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