Exhibit 10.3

GENERAL SECURITY AGREEMENT

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For value given by FIVE STAR BANK (“Bank”), a New York banking corporation with
an office and principal place of business located at 55 North Main Street,
Warsaw, New York 14569, and LEATHERSTOCKING GAS COMPANY, LLC, a New York limited
liability company with an address of 330 West William Street, Corning, New York
14830 (“Pledgor”) hereby agrees as follows:

1. The term “Indebtedness” means any and all monetary obligations of Pledgor or
Leatherstocking Pipeline Company, LLC (“Company”) to Bank, whether now existing
or hereafter arising, direct or contingent, whether represented by a note, other
instrument, guaranty of the obligations of another Entity to Bank, other
agreement or otherwise, including all extensions and renewals thereof, together
with any obligations for taxes and/or insurance advanced by Bank on Pledgor’s
behalf, and whether from time to time reduced or fully extinguished and
thereafter reincurred,

The term “Entity” means any person, partnership, corporation, joint venture,
governmental agency or business association of any kind.

The term “Guarantor” means any Entity, if any, which guarantees to Bank payment
of all or any part of the Indebtedness. Unless otherwise defined herein,
capitalized terms shall have the meanings set forth in the New York State
Uniform Commercial Code, as amended from time to time (“UCC”).

2. To secure payment of the Indebtedness, and performance of all obligations of
Pledgor and/or Company to Bank, whenever arising, Pledgor hereby grants to Bank
a security interest in the items detailed on the attached Exhibit “A”, together
with all proceeds and products of the following, whether now owned or hereafter
acquired (the “Collateral”).

3. Pledgor represents and warrants to Bank as follows:

a. The address of its principal place of business is:

330 West William Street. Corning, New York 14830

b. All Collateral is and shall be located in New York State except as previously
described to Bank in writing by Pledgor. Pledgor will promptly notify Bank in
writing at any time that any Collateral is located anywhere other than in New
York State or in the locations previously described to Bank in writing by
Pledgor.

c. Pledgor is the owner of the Collateral free and clear of any other security
interests, liens or encumbrances (voluntary or involuntary) of any nature or
kind.

d. Pledgors execution of this Agreement has been authorized by all necec-ary
action of the limited liability company and its members and managers. Pledgor’s
execution of this Security Agreement and performance of its obligations
hereunder does not contravene or violate any agreement, law or regulation which
binds Pledgor, and if Pledgor is a corporation, its Certificate of Incorporation
as amended from time to time or By-Laws, and if Pledgor is a partnership, its
Partnership Agreement as amended from time to time; if Pledger is a limited
liability company, its Operating Agreement.

e. No representation or warranty made by Pledgor, if any, to Bank at any time in
any agreement is untrue or incorrect as of the date this Security Agreement was
executed. All other

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information furnished to Bank at any time, including Pledgor’s and Company’s if
any, most recent financial statements is accurate and complete in all material
respects.

f. All Pledgor’s Accounts arose from bona fide outright sales of goods or
services and are valid obligations of the Account debtor without offset, defense
or counterclaim. None of Pledgor’s Accounts are or will be subject to any
security interest, lien or assignment except for security interests in favor of
Bank.

g. All Pledgor’s Fixtures are located at and/or attached to the real properties
previously described to Bank in writing by Pledgor.

h. Pledger has paid and is current on all tax obligations including but not
limited to income tax, sales tax, and real property tax.

There are no pending or threatened lawsuits, court actions, proceedings or
arbitrations against Pledger.

j. Pledgor is not in default under the terms or provisions of any other loan
arrangement, loan financing, contractual relationship or agreement

4. Pledger agrees that until the Indebtedness is paid in full, and Pledger and
Company no longer have any rights to borrow under any Agreement with Bank,
Pledger will:

a. Maintain all records, ledgers sheets, correspondence and documents and other
writings relating to the Collateral at Pledgor’s principal place of business.
Bank shall at all times have reasonable access to and the right to inspect
and/or audit Pledgor’s books and records, inspect, confirm and verify the
Collateral and do whatever else Bank deems appropriate to protect its interests
in the Collateral.

b. Upon demand, provide Bank with a list of the Collateral, with locations and
current values and a list of Accounts, with agings and addresses of the Account
debtors.

c. Defend the Collateral against all claims and demands of any Entity claiming
any interest thereon.

d. Immediately notify Bank in writing of any change in its name, address or any
material damage to any Collateral.

e. Keep the Collateral fully insured at its own expense with insurance companies
acceptable to Bank, against loss by fire, explosion and other causes ordinarily
included within the term “extended coverage” in amounts satisfactory to Bank and
sufficient to prevent Pledgor from becoming a co insurer within the terms of the
insurance policies. Pledger will also maintain insurance from all other hazards
and risks commonly insured against by companies engaged in a similar business.
The insurance covering the Collateral shall name Bank as an additional insured,
secured party and loss payee, and the insurance company shall agree to give Bank
thirty days prior written notice of any cancellation or reduction in coverage.
Pledgor will provide Bank with Certificates of insurance showing such
designations and agreement concerning notice of cancellation and on demand, the
originals of all insurance policies. Pledger will promptly provide Certificates
of insurance satisfactory to Bank for all renewals of the policies.

In the event any Collateral is lost or destroyed, Pledgor will promptly remit,
for application to the Indebtedness (whether or not the Indebtedness has been
accelerated, demanded or is otherwise then due) all insurance proceeds received
by Pledgor in connection with the damage to or destruction of any

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Collateral. Bank may prosecute and settle all insurance claims relating to the
Collateral, and may endorse Pledgor’s name on any insurance checks and drafts
whether or not the Indebtedness has been accelerated, demanded or is otherwise
then due. Bank may apply any insurance proceeds received by it to any part of
the Indebtedness as it sees fit.

f. Except for either sales of inventory in the ordinary course of business, or
liens previously disclosed to Pledger in writing and accepted by Bank, Pledgor
will not sell, assign, pledge or in any way encumber any Collateral whether now
owned or hereafter acquired. Pledgor will not acquire or finance any property
subject to a purchase money security interest.

g. Comply with all terms and conditions of any lease covering any premises where
any Collateral is located. Pledgor will comply with all laws, rules and
regulations relating to its business.

h. Except as previously described to Bank in writing, Pledgor will not allow any
personal property to become a fixture at any other real property without prior
written notice to Bank, and Bank’s prior written consent. Pledgor will cause all
owners, landlords and mortgagees of any real property at which Fixtures are or
may be located to give their written consent to Bank’s security interest in
Fixtures.

i. Furnish to Bank such financial statements as Bank shall from time to time
request, including if requested by Bank annual audited financial statements.
Pledgor shall at all times maintain and keep complete and accurate books and
records maintained in accordance with generally accepted accounting principles
consistently applied.

j. Keep the Collateral in good workmanlike condition.

k. Notify the Bank of any current or imminent material adverse change or
deterioration of the Pledgor’s financial condition.

l. Pledgor will not change its name or organizational structure or place of
business or formation without prior written Bank consent.

5. Bank may file financing statements to perfect its security interest in the
Collateral without Pledgor’s signature including financing statements filed to
perfect the Bank’s lien position under revised Article 9 of the UCC. Pledgor
will deliver physical possession of all instruments currently existing to Bank,
and upon Pledgor’s receipt, all instruments hereafter acquired by Pledgor. Upon
demand, Pledgor will deliver physical possession of all Chattel Paper and
Documents to Bank. Pledgor will not accept prepayments on any instruments or
Chattel Paper without Bank’s prior written consent. Pledgor will execute all
documents necessary to cause Bank’s security interest to be noted as a first
lien on all Certificates of Title for vehicles now or hereafter owned by
Pledgor. All such Certificates of Title will be delivered by Pledger to Bank.

6. Pledgor will pay promptly when due all taxes and assessments upon the
Collateral. Pledgor authorizes Bank to and Bank may, at its option, (but shall
not be obligated to) discharge taxes, liens, security interests, or other
encumbrances at any time levied or placed on the Collateral, and may pay for
insurance on the Collateral, and may pay for maintenance and preservation of the
Collateral. If Pledgor fails to do anything which it undertakes to do under this
Security Agreement, Bank may do the same, but shall not be obligated to take any
action. Pledgor agrees to reimburse Bank on demand for any reasonable attorneys
fees or other costs of collection or costs incurred by Bank as described above,
pursuant to the foregoing authorization, together with interest thereon payable
at the highest rate allowed by law, and all sums so paid shall be secured by the
security interest created in this Security Agreement.

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7. Upon the occurrence of any of the following, Pledgor shall be in default
under this Security Agreement. If the term “Indebtedness” includes monetary
obligations of Company to Bank, then all references to “Pledgor” in the default
clauses below shall be deemed to be followed by the words “and/or Company,” or
the appropriate variation thereof. References to “Guarantor” shall be deemed to
be followed by the words “if any.”

a. Pledgor’s failure to make any payment to Bank on the Indebtedness when due.

b. Pledgor’s and/or any Guarantor’s failure to perform any obligation under any
agreement or loan documents entered into at any time by them or any of them in
favor of Bank (“Agreement”).

c. Pledgor’s failure (or the failure of any Pledgor, if more than one Pledgor
signed this Note) or of any other person or entity liable to Bank for payment of
the indebtedness evidenced by this Note (“Guarantor”), to perform or comply with
any term or provisions or covenant under any other loan documents executed by
Pledgor or Guarantors in favor of Bank.

d. Falsity of any representation or warranty contained in any loan document
executed by Pledgor in favor of the Bank.

e. Entry of a judgment and/or filing of a federal tax lien against Pledgor
and/or against any Guarantor.

f. Commencement of a bankruptcy proceeding or an assignment for the benefit of
creditors by or against Pledgor and/or by or against any Guarantor.

g. The dissolution, merger, consolidation or failure of Pledgor to maintain
itself as a limited liability company in good standing.

h. The making by Pledgor and/or by any Guarantor of a bulk sale or other
disposition of substantially all of its respective assets.

i. Insolvency (in the form of a negative net worth as defined under generally
accepted accounting principles) of Pledgor and/or of any Guarantor.

j. Bank receives notice from any Guarantor of the discontinuance of his
liability to Bank.

k.. Discontinuance of Pledgor’s business and/or of any corporate Guarantor’s
business.

1. Repossession of or the appointment of a receiver or custodian for any
property of Pledgor and/or of any Guarantor.

m. The occurrence of a material adverse change or deterioration in the financial
condition of the Pledgor.

8. Upon the occurrence of a default under this Security Agreement all of the
indebtedness shall, at Bank’s sole option, become immediately due and payable
without notice, presentment, demand or protest of any kind, all of which are
hereby waived by Pledgor. Upon the occurrence of a default under this Security
Agreement, Pledgor shall have all the rights and remedies provided herein, and
under the UCC and under any other laws, including but not limited to the
following:

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a. Bank shall have all collection rights of a secured party under the UCC.

b. Bank may peaceably by its own means, or with judicial assistance enter any
premises where Collateral is located, and take possession of the Collateral or
render it unusable or dispose of the Collateral on such premises. Pledger agrees
that Bank may use any real property owned, leased or otherwise possessed by
Pledger rent flee, to allow Bank to enforce its rights in Collateral. Pledger
will not resist or interfere with such action.

c. Bank may require Pledger to assemble all or a part of the Collateral and make
it available to Bank at any place designated in a notice sent to Pledgor.

d. Pledgor hereby agrees that any requirement of the UCC for reasonable notice
shall be met if notice is given at least ten (10) days (i) prior to public sale
or disposition or (ii) prior to the date after which private sale or disposition
will be made. No notification shall be required to be sent to Pledgor with
regards to Bank’s disposition of Collateral which is perishable, or which
threatens to decline speedily in value or for which notice of disposition is not
otherwise required under the UCC. Bank may bid any amount it wishes or become a
purchaser at any public sale. Pledger shall remain liable for any deficiency.

e. Bank’s reasonable attorneys’ fees and legal expenses in exercising any of its
rights and remedies upon default shall become part of Bank’s reasonable expenses
of retaking, holding, preparing for sale and the like.

f. Pledger shall make available to Bank such employees or agents as are
necessary to assist Bank in enforcing its rights in the Collateral.

g. With regards to Accounts, Bank shall have the following additional rights:

i. To enforce, settle, or compromise payment of any Account;

ii. To release in whole or in part, any amounts owing on Accounts;

iii.To prosecute any action or proceeding with respect to Accounts in Bank’s
name or in the name of Pledger;

iv. To extend the time of payment of any or all Accounts;

v. To make allowances and adjustments with respect to Accounts;

vi. To issue credit in Pledgor’s or Bank’s name;

vii.To sell, assign and deliver the Accounts and any returned, reclaimed or
repossessed merchandise or other property held by Bank or by Pledger for Bank’s
account, at public or private sale, for cash, upon credit or otherwise, at
Bank’s sole option and discretion;

viii.To remove from any place any and all documents, instruments, files and
records relating to the Accounts, and to permit Bank’s use of, without cost or
expense, such of Pledgor’s personnel, supplies and space at the premises as may
be reasonably necessary to properly administer and control the Accounts, or the
handling of collection thereon;

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ix.To receive, open and dispose of all mail addressed to Pledgor and to notify
postal authorities to change the address of delivery thereof to such address as
Bank may designate;

x.To notify debtors to make payment directly to Bank; and,

xi.To require a Lockbox arrangement be implemented with respect to the Accounts.

h. To endorse and cash checks in its own name or in Pledgor’s name, pursuant to
an irrevocable power of attorney which it hereby grants to Bank.

i. With regard to the instruments and Chattel Paper, Bank shall have the
following additional rights:

i. To direct makers, endorsers or guarantors to make payments directly to Bank;

ii.To sue the makers, endorsers and guarantors in Bank’s name or Pledgor’s name;

iii.To discount any of the instruments and Chattel Paper; and,

iv.To compromise amounts due under the instruments and Chattel Paper.

j. As security for the Note, and any renewal or extension thereof, and for all
other obligations, direct or contingent, of Pledgor to Bank, now due or to
become due whether now existing or hereafter arising, (the Note and such other
obligations being herein referred to as the “Obligations”), Pledgor gives Bank a
security interest in all funds, deposits and other property, and the proceeds
thereof, now or hereafter in the possession or control of Bank for the account
of Pledger (the “Deposits”). Bank may at its option and at any time(s), with or
without notice to Pledger, set off or realize upon any and all Deposits, and
apply them to the payment or reduction of all or any of the Obligations (whether
or not then due), in such manner as Bank may determine, in its sole discretion.
Bank shall not be obligated to assert or enforce any rights under this paragraph
or to take any action in reference thereto, and Bank may in its discretion at
any times) relinquish its rights under this paragraph as to a particular Deposit
without thereby affecting or invalidating its rights as to any other Deposit.
The Bank’s right of setoff applies to all accounts and deposits held at the Bank
and any other bank owned by Financial Institutions Inc.

9. No remedy conferred herein, by law, under this Security Agreement, or any
other agreement, or otherwise is intended to be an exclusive remedy. All Bank’s
remedies are cumulative. Failure by Bank to exercise any right, remedy or option
under this Security Agreement or under any other agreement, or delay by Bank in
exercising the same, shall not operate as a waiver thereof. No waiver by Bank
will be effective unless it is confirmed in writing and then only to the extent
specifically stated. To the extent that the indebtedness is now or hereafter
secured by property other than the Collateral or by the guarantee, endorsement
or property of any other Entity, Bank shall have the right in its sole
discretion, to determine which rights, securities, liens, security interests or
remedies Bank shall at any time pursue, relinquish, subordinate or modify, or
take any action with respect thereto without in any way modifying or affecting
any of Bank’s rights hereunder.

10. Pledgor shall pay all Bank’s reasonable attorneys’ fees incurred and to be
incurred in enforcing and collecting the Indebtedness and in enforcing Bank’s
rights in Collateral (including but not limited to any proceedings brought under
the Bankruptcy Code).

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11. All rights of Bank under this Security Agreement shall inure to the benefit
of its successors and assigns, and all obligations of Pledger shall bind its
successors and assigns, legal representatives, heirs and distributees.

12. This Security Agreement is governed by New York law. PLEDGOR WANES THE RIGHT
TO A JURY TRIAL IN ANY LITIGATION OF ANY NATURE OR KIND IN WHICH PLEDGOR AND
BANK ARE BOTH PARTIES. Any litigation involving this Security Agreement shall,
at Bank’s option, be triable only in a court located in Wyoming County, New
York. Pledger waives the right to require Bank to post’ a bond or undertaking in
any action, including an action commenced under CPLR Article 71. Pledgor
acknowledges that it has transacted business in New York State with regard to
this Security Agreement.

13. Pledgor’s execution of this Security Agreement does not modify, terminate or
impair Bank’s rights or Pledgor’s obligations under existing Security
Agreements, if any, previously executed and delivered to Bank by Pledger. All
such Security Agreements and any financing statements filed in connection with
those Security Agreements remain in full force and effect. All existing UCC 1
financing statements filed against Pledger by Bank in any public office, if any,
shall also relate to the security interest created in this Security Agreement,
even though Bank intends to file additional UCC 1 fmancing statements. The
future execution and delivery by Pledgor of a Security Agreement in favor of
Bank shall not modify, impair or terminate Bank’s rights or Pledgor’s
obligations under this Security Agreement.

14. This Security Agreement may not be modified or terminated orally. Wherever
used in this Security Agreement, neutral pronouns shall include the masculine
and feminine gender as appropriate in the context, and singular terms (such as
“Pledgor”) shall be deemed in the plural where appropriate.

Any clause in this document requiring arbitration is not enforceable when SBA is
the holder of the Note secured by this instrument.

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IN WITNESS WHEREOF, Pledgor has executed and unconditionally delivered this
Security Agreement to Bank on August 27, 2014.

Pledgor Name: LEATHERSTOCKING GAS COMPANY, LLC Signature: /s/ Michael I. German,
CEO and Manager Print Name and Title: Michael I. German, CEO and Manager

 

Witness: /s/ Stanley G. Sleve

Name, Title: Stanley Sleve, VP Admin.

 

 

 

 

 

 

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EXHIBIT “A”

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General

Any and all personal property, including, but not limited to:

All equipment of Debtor, whether now owned or hereafter acquired, wherever
located, including, but not limited to all present and future machinery,
furniture, fixtures, manufacturing equipment, farm machinery and equipment, shop
equipment, office and record keeping equipment, parts and tools, and the goods
described in any equipment schedule or list herewith or hereafter furnished to
secured party by Debtor (but no such schedule or list need be furnished in order
for the security interest granted herein to be valid as to all of Debtor’s
equipment) together with all substitutions and replacements for and products of,
any of the foregoing property not constituting consumer goods, and together with
all insurance and/or other proceeds of any type of the foregoing property and in
the case of all tangible collateral, together with all accessions and, except in
the case of consumer goods, together with (i) all accessories, attachments,
parts, equipment, and repairs now or hereafter attached or affixed to, or used
in connection with, any such goods, and (ii) all warehouse receipts, bills of
lading and other documents of title now or hereafter covering such goods, and
all now and hereafter existing books and records (in whatever form maintained)
relating to the foregoing.

All accounts receivable, contract rights, and each and every right of the Debtor
to the payment of money, whether such right to payment now exists or hereafter
arises, whether such right to payment arises out of a sale, lease, or other
disposition of goods or other property by Debtor, out of a rendering of services
by Debtor, out of a loan by Debtor, out of the overpayment of taxes or other
liabilities of the Debtor, or otherwise arises under any contract or agreement,
whether such right to payment is or is not already earned by performance, and
howsoever such right to payment may be evidenced, together with all other rights
and interests (including all liens and security interests) which Debtor may at
any time have by law or agreement against any account Debtor or other obligor
obligated to make any such payment or against any of the property of such Debtor
or other obligor, all, including, but not limited to all present and future debt
instruments, chattel paper, including all electronic chattel paper, accounts,
loans, and obligations receivable and tax refunds, together with the proceeds of
any and all of the foregoing property, and all now and hereafter existing books
and records (in whatever form maintained) relating to the foregoing.

All inventory in all of its forms, wherever located, now or hereafter existing
(including, but not limited to, (i) all raw materials and work in process,
finished goods, and materials used or consumed in the manufacture or production
of inventory, (ii) goods in which the Debtor has an interest in mass or a joint
or other interest or right of any kind, and (iii) goods which are returned to or
repossessed by the Debtor), and all accessions thereto, proceeds and products
thereof and documents therefore (any and all such inventory, accessions,
products and documents being the “inventory”), and all books and records (in
whatever form maintained) relating to any of the foregoing described collateral.

All general intangibles of Debtor, whether now owned or hereafter acquired,
including, but not limited to, applications for patents, copyrights, trademarks,
trade secrets, good will, tradenames, customer lists, permits and franchises,
the right to use Debtor’s name, and tax refunds.

 

Please Initial _/s/ MG____