Exhibit 10.5
GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (this "Guaranty") is between RGC RESOURCES INC.
("Resources") and Sequent Energy Management, LP. (the "Company") and is
effective from and after June 7, 2016 (the "Effective Date").

WHEREAS, on or after the Effective Date of this Guaranty, Roanoke Gas Company,
wholly-owned subsidiary of Resources (the "RGC Subsidiaries") and the Company
have entered or may enter into (i) one or more agreements for the purchase, sale
or exchange of natural gas or other hydrocarbons or non-combustible gases, which
transactions will be evidenced by one or more base contracts and the general
terms and conditions stated therein (the "NAESB Gas Contracts") and (ii) one or
more swap, option or other financially-settled derivative transactions, which
transactions will be evidenced by one or more swap agreements, confirmations
and/or master agreements (the "ISDA Agreements" and collectively with the NAESB
Gas Contracts, referred to herein as the "Agreements").

WHEREAS, the RGC Subsidiaries have undertaken or will undertake certain payment
obligations under the Agreements (the "Obligations") and the Company has
requested that Resources guarantee the Obligations of the RGC Subsidiaries as
provided in this Guaranty.

WHEREAS, Resources has determined that it will derive significant economic
benefits from the RGC Subsidiaries entering into the Agreements; and Resources
desires to enter into this Guaranty with the Company as an inducement to the
Company to enter into the Agreements with the RGC Subsidiaries.

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, and subject to the terms hereof and intending to be legally
bound, Resources covenants and agrees as follows:

Section 1. Guaranty. Resources hereby absolutely and unconditionally guarantees
to the Company the due and punctual payment of the Obligations of the RGC
Subsidiaries under the Agreements. This is a guaranty of payment and not of
collection or performance. Each and every default by RGC Subsidiaries in the
payment of the Obligations under the Agreements will give rise to a separate
cause of action hereunder, and separate suits may be brought hereunder as each
cause of action arises. Notwithstanding the foregoing, Resources will not be
liable hereunder for consequential, incidental, punitive, exemplary or indirect
damages, in tort, contract or otherwise, or any penalties or charges assessed by
any person or entity.

Section 2.    Termination.    This Guaranty shall remain in full force and
effect through March 31, 2018 or the tenth (10) business day after this Guaranty
is terminated by written notice as set forth in Section 10 hereunder. No
termination shall affect, release or discharge Resources’ liability with respect
to any Obligations existing or arising under the Agreements prior to the
effective date of termination.

Section 3. Demand for Payment. As a condition precedent to each payment under
this Guaranty, a demand by Company for payment hereunder shall be in writing,
signed by a duly authorized representative of Company and delivered to Resources
pursuant to “Notices” hereof, and shall (a) reference this Guaranty, (b)
specifically identify Company, the nature of the default, the Obligations to be
paid and (c) set forth payment instructions, including bank name, routing number
and bank account number. There are no other requirements of notice, presentment
or demand. Resources shall pay, or cause to be paid, such Obligations within ten
(10) business days of receipt of such demand.

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Section 4. Obligation Absolute. The obligations of Resources under this Guaranty
will remain in full force and effect until the Obligations of the RGC
Subsidiaries under the Agreements have been fully discharged and terminated. If
any payment by an AGL Subsidiary in respect of any Obligation is rescinded or
recovered from the Company as a preference or fraudulent transfer under federal
or state bankruptcy laws, Resources will remain liable under this Guaranty with
respect to such Obligations as if such payment had not been made.
 
Section 5. Reservation of Defense. Notwithstanding any other provision of this
Guaranty, in any action brought with respect to this Guaranty, Resources
expressly reserves to itself and will be entitled to raise as a complete or
partial defense to any liability it may otherwise have hereunder, any defenses
to the same extent as such defenses could have been raised by the RGC
Subsidiaries, except those arising out of the bankruptcy, insolvency,
dissolution or liquidation of the RGC Subsidiaries.

Section 6. Expenses. In the event this Guaranty is collected by or through an
attorney at law, Resources will reimburse the Company for all costs of
collection, including reasonable attorneys’ fees and expenses actually incurred.
Any amounts received by the Company hereunder may be applied to the Obligations
or the costs of collection under this Guaranty in such order and manner as the
Company may deem appropriate.

Section 7.    Waivers and Consents. Resources hereby waives notice of (a)
acceptance of this Guaranty, (b) presentment and demand for payment concerning
the liabilities of Resources hereunder, except as specifically provided herein
and (c) any dishonor or default by, or disputes with, any AGL Subsidiary.
Resources consents to the renewal, compromise, extension or modification to the
terms of the Obligations and to any change, modification or waiver of the terms
of the Agreements without impairing or releasing the obligations of Resources
hereunder.

Section 8.    Representations and Warranties. Resources represents and warrants
that:

(a)    It is a corporation duly organized and validly existing under the laws of
the jurisdiction of its incorporation and has the corporate power and authority
to execute, deliver and perform this Guaranty;

(b)    The execution, delivery and performance of this Guaranty have been and
remain duly authorized by all necessary corporate action and do not contravene
any contractual restriction binding on Resources or its assets;

(c)    This Guaranty constitutes the legal, valid and binding obligation of
Resources enforceable against Resources in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditor's rights and to general equity principles.

Section 9.    Revocation. This Guaranty will not apply to Obligations under any
Agreements (or under any transactions under any Agreements) entered into by RGC
Subsidiaries after the date of actual receipt by the Company of written notice
from Resources of the revocation of this Guaranty, but such revocation will not
affect liability for any obligations arising from transactions entered into
prior to the effectiveness of any revocation.

Section 10. Notices. All notices, demands, requests or other communications to
be sent by one party to the other hereunder or required by law must be in
writing and will be deemed to have been validly given or served by delivery of
the same in person to the intended addressee; or by depositing the same with
Federal Express or another reputable private courier service for next business
day delivery or by depositing the same in the United States mail, postage
prepaid, registered or certified mail, return receipt requested, in either case

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addressed to the intended addressee at its address set forth below or at such
other address as may be designated by such party as herein provided or sent by
fax at the number designated below with a copy sent via mail or overnight
courier. All notices, demands and requests will be effective upon receipt if
delivered by fax or by personal delivery, or one business day after being
deposited with the private courier service, or two business days after being
deposited in the United States mail as required above. Rejection or other
refusal to accept or the inability to deliver because of changed address of
which no notice was given as herein required will be deemed to be receipt of the
notice, demand or request sent. The parties hereto will have the right from time
to time to change their respective addresses and each will have the right to
specify as its address any other address within the United States of America.

Address of the Company:
Sequent Energy Management, L.P.
1200 Smith Street, Suite 900
Houston, TX 77002
Attention: Credit Department            
Phone:    832-397-1782    
Fax:    832-397-3885    

Address of Resources:

RGC Resources Inc.
PO Box 13007
Roanoke, VA 24030
Attention:    Paul W. Nester
VP, Treasurer and CFO
Phone:        (540) 777-3837    
Fax:        (540) 777-2636

with a copy to:

RGC Resources Inc.
PO Box 13007
Roanoke, VA 24030
Attention:    Paul W. Nester
VP, Treasurer and CFO
Phone:        (540) 777-3837    
Fax:        (540) 777-2636

Section 11. Assignment. This Guaranty will inure to the benefit of and may be
enforced by the Company and its successors and assigns, and will be binding upon
and enforceable against Resources and its successors and assigns.

Section 12. Governing Law, Severability; Entire Agreement. This Guaranty is to
be interpreted, construed and governed by and in accordance with the laws of the
State of Virginia. The invalidity of any portion, provision or paragraph of this
Guaranty will not affect or render invalid any other portion, provision or
paragraph of this Guaranty. This Guaranty constitutes the entire agreement
between Resources and the Company with respect to the subject matter hereof and
supersedes all prior agreements, whether written or oral, between the parties
respecting such matters. No modification of this Guaranty and no waiver of any
right or remedy hereunder, will be binding unless it is in writing and signed by
Resources and the Company.

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No delay or failure by the Company to exercise any right or remedy will operate
as a waiver thereof, and no single or partial exercise by the Company of any
right or remedy will preclude other or future exercise thereof or the exercise
of any other right or remedy.

IN WITNESS WHEREOF, Resources has caused this Guaranty to be executed by its
duly authorized officer or representative.

 
 
 
RGC Resources Inc.
 
 
 
 
 
 
 
 
By: /s/ Paul W. Nester                              
 
 
 
Name: Paul W. Nester
 
 
 
Title: Vice President, Treasurer and CFO

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