Document:

exv10w3

EXHIBIT 10.3

Page 1 of 4

APPOINTMENT OF NATURAL GAS AGENT

          By this contract Northeast Ohio Natural Gas Corp. (“NEO”); Orwell Natural Gas Company
(“Orwell”); and Brainard Gas Corp. (Brainard) (jointly the “Buyers”) appoint and elect
John D. Oil and Gas Marketing Company, LLC (the “Agent”) to act as the Buyers’ agent for
the purpose of arranging for the sale and transportation of natural gas in interstate commerce to
the Buyers’ points of delivery on Columbia Transmission Inc., an interstate pipeline.

Recitals

          Whereas, Buyers desire to acquire supplies of natural gas and to obtain delivery of such
gas to their distribution facilities through various pipelines owned or leased by others; and

          Whereas, Agent is in the business of acquiring natural gas supplies for others;

          Now therefore, in consideration of the mutual covenants contained herein, and other
good and valuable consideration, the Buyers and Agent hereby agree as follows:

	 	1.	 	Agreement: Agent shall solicit offers to sell gas to the Buyers from creditworthy
interstate natural gas suppliers using Agent’s demonstrated expertise in the field of
natural gas marketing and energy trading. Agent shall present such offers to sell natural
gas to the Buyers using the Buyer’s transportation contracts OR the selling supplier’s
transportation contracts. The Buyers agree to pay the Agent a fee of $00.15/dekatherm for
each dekatherm of interstate natural gas that the Buyers purchase pursuant to an offer to
sell that is presented to Buyers by Agent. Buyer agrees that agent shall be Buyer’s
exclusive agent, and Buyer shall purchase all of its interstate natural gas requirements
through Agent pursuant to this Agreement.

	 	 	 	Agent agrees that compliance with each of Buyer’s credit policies and requirements shall be a
condition precedent to Agent’s duty to present a creditworthy supplier of interstate natural gas
supplies. Further, if the financial condition of any Buyer becomes unsatisfactory, Buyer shall
supply Agent such credit security as will enable Agent, in the reasonable exercise of Agent’s
judgment, to find willing natural gas suppliers.

 

Page 2 of 4

APPOINTMENT OF NATURAL GAS AGENT

	 	2.	 	Billing and Payment: Agent’s fee for each dekatherm of natural gas purchased pursuant
to this agency agreement by Buyers shall be due and payable at such time as each Buyer’s
payment or payments to the natural gas seller or sellers are due and payable. In order to
prevent billing disputes, Buyers agree to provide Agent with a copy or copies of all
invoices submitted to the Buyers by natural gas suppliers.
	 
	 	 	 	A finance charge of one and one-half percent (1.5%) per month shall be due and payable on
any payments to Agents that are not paid within fifteen (15) days of the due date of
payment.
	 
	 	3.	 	Quantity: Each of the Buyers shall advise Agent in writing, no later than fifteen (15)
days prior to the first day of each month during the term of this contract, of such Buyer’s
anticipated demand for natural gas during the next month.
	 
	 	4.	 	Reimbursement: Each Buyer’s shall be wholly responsible for the payment of the gas
sales price, gas transportation rates, fees, penalties or any charges whatsoever related to
gas that is offered by Agent and purchased by each buyer. Each Buyer shall hold Agent
harmless and shall reimburse Agent for any legal fees or expenses incurred under this
contract.
	 
	 	5.	 	Term of Contract. This contract shall commence on January 4, 2010 and shall remain in
force and effect until September 31, 2023 UNLESS the contract is terminated or renegotiated
earlier upon the mutual written agreement of the Parties.
	 
	 	6.	 	Regulatory Compliance. This Agency Agreement shall be subject to the rules and
regulations of any duly constituted Federal or State regulatory body having jurisdiction
hereunder. It is the express intention of NEO and of Marketing to comply with all aspects
of the rules, regulations and decisions of the Federal Energy Regulatory Commission (the
“FERC”) regarding Agency Agreements that were in effect at the time of execution of this
contract, or as such rules, regulations and decisions may be changed throughout the term of
the contract. Deviations from such rules, regulations and decisions of the FERC related to
Agency Agreement are due to mistake or inadvertence and not to intent. If an action occurs
that results in a material deviation from the rules, regulations or decisions of the FERC,
Buyers and Agent jointly pledge to make a good faith effort to rectify such deviations,
when discovered by any of them. Material deviations that result in harm to competitive
markets or harm to competitors will be reported to the Chief Compliance Officer of Buyers.
	 
	 	7.	 	Governing Law: The interpretation and performance of this contract shall be in
accordance with the laws of the State of Ohio.

 

Page 3 of 4

APPOINTMENT OF NATURAL GAS AGENT

	 	8.	 	Assignment: All of the covenants, conditions and obligations of this contract shall
extend to and be binding upon the heirs, personal representatives, successors and assigns
respectively of the parties hereto, provided, however that this contract shall not be
assigned by any of the Buyers or by the Agent without the written consent of the other
parties, which consent shall not be unreasonably withheld. Notwithstanding the foregoing,
no consent shall be required if any of the Buyers assigns this contract to an affiliated
local distribution company or if the Agent assigns this contract to an affiliated or
unaffiliated marketing company. For purposes of this contract an affiliate shall
mean any entity or person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such first entity or person.
	 
	 	9.	 	Survival: The obligations of each Buyer to make payment of the Agents fee for gas
received hereunder shall survive the termination or cancellation of this contract. The
obligation of Buyers to indemnify the Agent pursuant to paragraph X, titled Reimbursement
shall survive the termination or cancellation of this contract. If any provision of this
contract is determined to be invalid, void, or unenforceable by any court having
jurisdiction, then such determination shall not invalidate, void, or make unenforceable any
other provision, agreement, or covenant in this contract. No waiver of any breach of this
contract shall be held to be a waiver of any other or subsequent breach. All remedies in
this contract shall be taken and construed as cumulative, that is, in addition to every
other remedy provided therein or by law.
	 
	 	10.	 	Complete Agreement: This contract represents the complete and entire understanding
between each Buyer and the Agent, superseding any prior agreements, respecting the subject
matter of this contract. The Buyers (jointly and severally) and the Agent hereto declare
that there are no promises, representations, conditions, warranties, other agreements,
expressed or implied, oral or written, made or relied upon by any of them, except those
herein contained.

          Therefore, John D. Oil & Gas Marketing Co., LLC agrees to become the Agent of
Northeast Ohio Natural Gas Company; Brainard Natural Gas Company; and of Orwell Natural Gas Company
as described above, and the foregoing Buyers each agree to appoint John D. Oil & Gas Marketing Co.,
LLC their gas supply agent.

 

Page 4 of 4

APPOINTMENT OF NATURAL GAS AGENT

          In witness whereof, the Parties have executed this contract.

This contract may be executed in counterparts, an original of each signed contract to be
delivered to the counterpart

	 	 	 	 	 
	 	Agent: John D. Oil and Gas Marketing Company, LLC

 	 
	 	/s/ Richard M. Osborne
 	 
	 	Richard M. Osborne 	 
		Chief Executive Officer

Date: January 3, 2010  	 
	 

	 	 	 	 	 
	 	Buyer: Northeast Ohio Gas Corp.

 	 
	 	/s/ Thomas J. Smith
 	 
	 	Thomas J. Smith 	 
	 	President

Date: January 3, 2010 	 
	 

	 	 	 	 	 
	 	Buyer: Brainard Gas Corp.

 	 
	 	/s/ Thomas J. Smith
 	 
	 	Thomas J. Smith 	 
	 	President

Date: January 3, 2010 	 
	 

	 	 	 	 	 
	 	Buyer: Orwell Natural Gas Company

 	 
	 	/s/ Thomas J. Smith
 	 
	 	Thomas J. Smith 	 
	 	President

Date: January 3, 2010exv10w5xay

EXHIBIT
10.5(a)

AMENDED AND RESTATED PROMISSORY NOTE

(“Note”)

$2,051,969

Mentor, Ohio

January 3, 2009

     FOR VALUE RECEIVED, the undersigned LIGHTNING PIPELINE COMPANY, INC., an Ohio corporation
(hereinafter the “Maker”) promises to pay to the order of RICHARD M. OSBORNE, TRUSTEE, his
successors and assigns (hereinafter the “Holder”), the principal sum of Two Million Fifty-One
Thousand Nine Hundred Sixty-Nine Dollars ($2,051,969), together with interest accruing at the rate
of six percent (6%) per annum. Maker shall pay the Holder interest on this Note on a monthly basis,
which interest shall be due on or before the first day of each month, or at Maker’s option, Maker
can accrue said interest and all such accrued amounts shall be paid on or before the Maturity
Date (as defined below). All unpaid interest and principal shall be paid in full by Maker to
Holder no later than January 3, 2012 (the “Maturity Date”) provided, however, that the Maker may
prepay in whole or in part, without premium or penalty the outstanding indebtedness evidenced by
this Note, provided each such prepayment shall be applied to the payments in the inverse order of
maturity.

     The occurrence of any one of the following shall constitute an event of default hereunder:

	 	1.	 	The failure to pay the principal amount and all accrued interest on the Note in
full on or before the Maturity Date.

	 	2.	 	The undersigned shall suffer or permit any act providing grounds for the entry
of an Order for relief under any chapter of the Bankruptcy Code;

     The Maker waives demand, presentment for payment, protest, notice of protest and of
non-payment, and any and all lack of diligence or delays in collection or enforcement of this Note.

     The undersigned agrees to pay to the Holder hereof all costs of collection of the indebtedness
evidenced hereby, including without in any way intending to limit the generality of the foregoing,
reasonable attorney fees incurred in connection with such collection proceedings.

     The Maker further authorizes any attorney at law to appear in any court of record in Cuyahoga
and/or Lake County, Ohio or in any other county where the Maker may reside or do business, after
the indebtedness evidenced hereby becomes due by acceleration or otherwise, and waive the issuing
and service of process, and confess a personal judgment against the Maker in favor of the Holder
hereof for the amount then appearing due, together with the costs of suit and thereupon to release
all errors and waive all rights of appeal, and stay of execution. This warrant of attorney to
confess judgment shall remain in full force and effect so long as any portion of the
indebtedness evidenced hereby remains unpaid, and any confession of judgment and subsequent
vacation thereof shall not constitute termination of this warrant of attorney to confess
judgment.

 

 

     This Note is to be construed and enforced according to and governed by the laws of the State
of Ohio.

     If any provision of this Note, or any covenant, stipulation, obligation, agreement, act, or
action, or part thereof made, assumed or entered into, or taken pursuant hereto or in connection
herewith shall be adjudged illegal or invalid, such illegality or invalidity shall not affect any
other provision or any other covenant, stipulation, obligation, agreement, act, or action, or part
thereof, made, assumed, entered into, or taken, each of which shall be construed and enforced as if
such illegal or invalid portion were not contained herein. Such illegality or invalidity or any
application thereof shall not affect any legal and valid application thereof, and each such
provision, covenant, stipulation, obligation, agreement, act, or action, or part shall be deemed to
be effective, operative, made entered into, or taken in the manner and to the full extent permitted
by law.

     Notwithstanding anything to the contrary elsewhere herein contained, the current holder of
this Note, Richard M. Osborne, Trustee, shall have the sole, personal, exclusive, and
non-assignable right to accelerate the due date for payment in full of the indebtedness evidenced
herein to a date specified by Richard M. Osborne, Trustee in a written notice of his election to do
so, which date shall not be earlier than thirty (30) days of the date of such written notice.

     This Note amends, restates and replaced the previous Promissory Note between Maker and Holder
dated December 1, 2008 in the original principal amount of $4,141,932.18

     WARNING BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHTTO NOTICE AND COURT TRIAL. IF YOU
DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE
POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARD- LESS OF ANY CLAIMS YOU MAY HAVE AGAINST
THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE
AGREEMENT, OR ANY OTHER CAUSE.

Witnessed by:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	LIGHTNING PIPELINE COMPANY, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Thomas J. Smith

	 	 	 	By:
	 	/s/ Richard M. Osborne	 	 
	 

	 	 	 	 	 	 	 	 
	Name: Thomas J. Smith

	 	 	 	 	 	Name: Richard M. Osborne	 	 
	 

	 	 	 	 	 	Title:   Chief Executive Officer

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