25 MANCHESTER STREET
PO BOX 1947
MERRIMACK, NH 03054-1947
V2 PENNICHUGK"
1603) 882-5191
FAX {603) 913-2305
VIA HAND DELIVERY
WWW.PENNICHUCK COM
March 27, 2018
Mr. Steven A. Bolton
Corporation Counsel
City of Nashua
229 Main Street
Nashua, NH 03060
Re: _ Pittsfield Aqueduct Company, Inc. - Request for Approval to Refinance
Intercompany Debt with Pennichuck Corporation
Dear Attorney Bolton:
Introduction. As you know, the City of Nashua, New Hampshire (the “City”) is the sole corporate
shareholder of Pennichuck Corporation (“Pennichuck”). The City has been the sole shareholder since
the acquisition of Pennichuck on January 25, 2012.
The purpose of this letter is to request that the City, acting in its capacity as sole shareholder, approve
resolutions authorizing Pennichuck’s regulated public water utility subsidiary, Pittsfield Aqueduct
Company, Inc. (“PAC”), to refinance intercompany debt with Pennichuck Corporation.
Background. As part of the City’s acquisition of Pennichuck, in accordance with special legislation
enacted by the State Legislature, and as unanimously approved by the Mayor and Board of Aldermen
on January 11, 2011, the corporate structure of Pennichuck and its utility subsidiaries was retained.
This corporate structure was retained for several reasons. First, the Mayor and Board of Aldermen
desired to maintain stability and continuity for customers and employees of the Pennichuck utilities
and the communities they serve. Second, retaining the corporate structure provided continuity for the
existing relationships with regulatory agencies and financial/banking partners. Third, the Mayor and
Board of Aldermen unanimously agreed that the corporate structure would encourage business-smart
decisions and rely upon well-established governance principles of corporate law, pursuant to
Pennichuck’s Articles of Incorporation and its by-laws.
Shareholder Approval of Borrowings Required. Under Article IX of Pennichuck’s Articles of
Incorporation, the City, acting in its capacity as Pennichuck’s sole shareholder, must approve:
“(3) any action to (A) create, incur or assume any indebtedness for borrowed money
or guarantee any such indebtedness of any person, (B) issue or sell any debt
securities or warrants or other rights to acquire any debt securities of the
[Pennichuck] Corporation or any of its Subsidiaries, or (C) guarantee any debt
securities of any person.”
