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Exhibit 10.3
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GUARANTY
AGREEMENT
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THIS GUARANTY AGREEMENT (the
"Guaranty" or the "Agreement") is dated as of the 22nd day
of March, 2005, by PENNICHUCK WATER WORKS, INC., a New Hampshire
corporation with a principal place of business at 25 Manchester
Street, Merrimack, New Hampshire 03054 (the "Guarantor"), and 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").
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W I T N E S S E T H
:
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WHEREAS, the Guarantor is a
subsidiary of Pennichuck Corporation (the "Company"); and
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WHEREAS, in accordance with
a certain promissory note (the "Note") executed pursuant to a Loan
Agreement dated as of even date herewith, as the same may hereafter
be amended, by and among the Bank, Guarantor, the Company and
others and related loan documents of even date (the "Loan
Documents"), the Bank has agreed to loan the Company up to Sixteen
Million Dollars ($16,000,000) and to make other financial
accommodations to the Company (collectively, the "Loan"); and
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WHEREAS, the obligation of
the Bank to make the Loan to the Company is subject to the
condition, among others, that the Guarantor shall execute and
deliver this Guaranty Agreement; and
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WHEREAS, the aforesaid Loan
will be beneficial to the Guarantor inasmuch as the proceeds of the
Loan to the Company will indirectly benefit the Guarantor;
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NOW, THEREFORE, in order to
induce the Bank to make the Loan to the Company pursuant thereto,
and for other good and valuable consideration, the receipt of which
is hereby acknowledged by the Guarantor, the Guarantor hereby
agrees as follows:
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1.
Guaranteed Obligations . The Guarantor does hereby
irrevocably and unconditionally guarantee, on a joint and several
basis, the due and punctual payment and performance of the
following obligations to the Bank (individually, a "Guaranteed
Obligation" and together the "Guaranteed Obligations");
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(a) Principal
and premium, if any, and interest on the Note, when the same
becomes due and payable, whether on demand or by acceleration or
otherwise;
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(b) Any and
all other obligations of the Company to the Bank or its affiliates
under the Loan Documents, the Swap Agreement (as defined in the
Loan Documents), the Note and any obligations arising under any now
existing or hereafter arising foreign exchange contracts, interest
rate swap, cap, floor or hedging agreements, or similar agreements
or in connection with any Automated Clearing House ("ACH")
agreements related to the processing of ACH transactions, together
with all fees and expenses, charges and other amounts owing by or
chargeable to the Company under the ACH agreements;
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(c) Any and
all reasonable out-of-pocket expenses that may be incurred by the
Bank in collecting all or any of the Guaranteed Obligations,
including reasonable attorneys' fees; and
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(d) Any and
all other indebtedness or obligation of any other guarantor under
this Guaranty.
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2.
Demand by the Bank . Upon any failure by the Company to
punctually pay or perform any Guaranteed Obligation when due, the
Bank may make demand upon the Guarantor for the payment or
performance of such Guaranteed Obligation and the Guarantor binds
and obliges himself to make such payment or performance forthwith
upon such demand.
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3.
Waiver of Demands, Notices, Diligence, etc . The Guarantor
hereby assents to all the terms and conditions of the Guaranteed
Obligations and waives, to the fullest extent permitted by law, (a)
demand for the payment of the principal of any Guaranteed
Obligation or of any claim for interest or any part of any thereof
(other than the demand provided for in section 2 hereof); (b)
protest of the nonpayment of the principal of any Guaranteed
Obligation or of any claim for interest or any part of any thereof;
(c) notice of presentment, demand and protest; (d) notice of
acceptance of any guaranty herein provided for or of the terms and
provisions thereof or hereof by the Bank; (e) notice of any
indulgences or extensions granted to the Company or any person or
party which shall have assumed the obligations of the Company; (f)
any requirement of diligence of promptness on the part of the Bank
in the enforcement of any of its rights under the provisions of any
Guaranteed Obligations or this Guaranty; (g) any enforcement of any
Guaranteed Obligation; (h) any suretyship defenses; and (i) any
right which the Guarantor might have to require the Bank to proceed
against any other guarantor of the Guaranteed Obligations or to
realize on any collateral security for the Guaranteed Obligations.
The waivers set forth in this section 3 shall be effective
notwithstanding the fact that any of the Company ceases to exist by
reason of its liquidation, merger, consolidation or otherwise.
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4.
Obligations of Guarantor Unconditional . (a) The obligations
of the Guarantor under this Agreement shall be unconditional,
irrespective of the validity, regularity or enforceability of any
Guaranteed Obligation, and shall not be affected by any action
taken under any Guaranteed Obligation in the exercise of any right
or remedy therein conferred, or by any failure or omission on the
part of the Bank to enforce any right given thereunder or hereunder
or any remedy conferred thereby or hereby, or by any waiver of any
term, covenant, agreement or condition of any Guaranteed Obligation
or this Guaranty, or by any release of any security or any other
guaranty at any time existing for the benefit of any Guaranteed
Obligation, or by any sale, lease or transfer by the Guarantor to
any person of any or all of the Guarantor's properties, or by any
action of the Bank granting indulgence or extension to, or waiving
or acquiescing in any default by the Company, the Guarantor or any
other guarantor, or any successor to the Company, the Guarantor or
any other guarantor or any person or party which shall have assumed
its obligations, or by reason of any disability or other defense of
the Company, the Guarantor or any other guarantor
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