Document:

exv10w7

Exhibit 10.7

Execution Copy

Security Agreement

          This Security Agreement dated as of May 3, 2011 (as amended, restated, supplemented
or modified from time to time, this “Agreement” ), is given, made and entered into by Northeast
Ohio Natural Gas Corp., an Ohio corporation (“NEO”), Orwell Natural Gas Company, an
Ohio corporation (“Orwell” ), Brainard Gas Corp., an Ohio corporation (“Brainard” ;
Brainard, NEO and Orwell are referred to herein, collectively, as the “Fixed Rate Issuers” and,
individually, as a “Fixed Rate Issuer” ), Great Plains Natural Gas Company, an Ohio
corporation, in its capacity as issuer of the hereinafter defined Floating Rate Notes (the
“Floating Rate Issuer” ) and in its capacity as guarantor under the hereinafter defined Fixed Rate
Note Purchase Agreement (“Great Plains” ), Lightning Pipeline Company, Inc., an Ohio
corporation (“Lightning” ), Spelman Pipeline Holdings, LLC, an Ohio limited liability
company (“Spelman” ), Kidron Pipeline, LLC, an Ohio limited liability company (“Kidron” ),
Gas Natural Service Company, LLC, an Ohio limited liability company (“Service Company” ),
and Gas Natural Inc., an Ohio corporation (the “Parent” ; the Parent, the Fixed Rate
Issuers, the Floating Rate Issuer, Great Plains, Lightning, Spelman, Kidron and Service Company are
referred to herein, collectively, as the “Initial Grantors” ) and any new Subsidiary of any Initial
Grantor, whether now existing or hereafter formed or acquired, which becomes party to this
Agreement pursuant to Section 21 hereof (collectively, together with the Initial Grantors, and in
each case with its respective successors and assigns, including debtors-in-possession on behalf
thereof, the “Grantors” and, individually, a “Grantor” ), as the grantors of the security described
below, and Sun Life Assurance Company of Canada (the “Secured Party” ), as the secured
party, in connection with those certain Note Purchase Agreements (as defined below).

Witnesseth that:

          Whereas, the Grantors are (or will be with respect to after-acquired property) the
legal and beneficial owners and the holders of the Collateral (as defined in Section 1 hereof).

          Whereas, pursuant to that certain Note Purchase Agreement dated as of November 1,
2010 by and among the Secured Party, the Fixed Rate Issuers, Great Plains, Lightning and the
Parent, as amended by the First Amendment and Joinder to Note Purchase Agreement dated as of May 3,
2011 by and among the Secured Party, the Fixed Rate Issuers, Great Plains, Lightning, Spelman,
Kidron, Service Company and the Parent (as so amended, and as from time to time further amended,
restated, supplemented or otherwise modified, the “Fixed Rate Note Purchase Agreement” ) (i) the
Secured Party has agreed to purchase $15,334,000 aggregate principal amount of the Fixed Rate
Issuers’ Senior Secured Guaranteed Notes due June 1, 2017 (the “Fixed Rate Notes” ) and (ii) Great
Plains, Lightning, Spelman, Kidron, Service Company and the Parent have each agreed to jointly and
severally guarantee the Guaranteed Obligations (as defined therein).

          Whereas, pursuant to that certain Note Purchase Agreement dated as of November 1,
2010 by and among the Secured Party, the Floating Rate Issuer, Lightning and the Parent, as amended
by the First Amendment and Joinder to Note Purchase Agreement dated as of May 3, 2011 by and among
the Secured Party, the Floating Rate Issuer, Lightning, Spelman, Kidron, Service Company and the
Parent (as so amended, and as from time to time further amended, restated, supplemented or
otherwise modified, the “Floating Rate Note Purchase Agreement” ; the Floating Rate Note Purchase
Agreement and the Fixed Rate Note Purchase Agreement are referred to herein, collectively, as the

 

 

“Note Purchase Agreements” and, individually, as a “Note Purchase Agreement” ) (i) the Secured Party
has agreed to purchase $3,000,000 aggregate principal amount of the Floating Rate Issuer’s Floating
Rate Senior Secured Guaranteed Notes due 2013 (the “Floating Rate Notes” ; the Floating Rate Notes
and the Fixed Rate Notes are referred to herein, collectively, as the “Notes” and, individually, as
a “Note” ) and (ii) Lightning, Spelman, Kidron, Service Company and the Parent have each agreed to
jointly and severally guarantee the Guaranteed Obligations (as defined therein).

          Whereas, in order to induce the Secured Party to enter into the Note Purchase
Agreements and other Financing Agreements (as hereinafter defined) and to induce the Secured Party
to purchase the Notes, the Grantors have agreed to grant a continuing Lien on the Collateral to
secure the Grantors’ obligations to the Secured Party under each Note Purchase Agreement, as
applicable, and the other Financing Agreements and otherwise as more fully described herein in the
manner set forth herein.

          Whereas, the Initial Grantors contemplate that from time to time after the date
hereof, additional Subsidiaries may, subject to the terms and conditions of Section 9.8 of each of
the Note Purchase Agreements, enter into joinder agreements to the Financing Agreements and the
Secured Party desires that such Subsidiaries become subject to this Agreement pursuant to the
requirements of Section 21 hereof.

          Now, Therefore, intending to be legally bound hereby, the parties hereto covenant and
agree as follows:

          1. Terms which are defined in the Note Purchase Agreements and not otherwise defined herein
are used herein as defined therein. The following words and terms shall have the following
meanings, respectively, unless the context hereof otherwise clearly requires:

               (i) “Collateral” means, with respect to each Grantor, all of such Grantor’s right,
title and interest in, to and under the following described property of such Grantor (each
capitalized term used in this definition shall have in this Agreement the meaning given to
it by the UCC):

                    (a) all now existing and hereafter acquired or arising Accounts, Goods, Health
Care Insurance Receivables, General Intangibles, Payment Intangibles, Deposit
Accounts, Chattel Paper (including, without limitation, Electronic Chattel Paper),
Documents, Instruments, Software, Investment Property, Letters of Credit, Letter of
Credit Rights, advices of credit, money, Commercial Tort Claims as listed on Schedule
B hereto (as such Schedule is amended or supplemented from time to time), Equipment,
Inventory, Fixtures, and Supporting Obligations, together with all products of and
Accessions to any of the foregoing and all Proceeds of any of the foregoing
(including without limitation all insurance policies and proceeds thereof);

                    (b) to the extent, if any, not included in clause (a) above, each and every
other item of personal property and fixtures, whether now existing or hereafter
arising or acquired, including, without limitation, all licenses, contracts and,
agreements, and all collateral for payment or performance of any contract or
agreement, together with

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all products and Proceeds (including all insurance policies
and proceeds) of any Accessions to any of the foregoing; and

                    (c) all present and future business records and information, including computer
tapes and other storage media containing the same and computer programs and software
(including without limitation, source code, object code and related manuals and
documentation and all licenses to use such software) for accessing and manipulating
such information.

Provided, however, that “Collateral” does not include any shares or stock of an Unrestricted
Subsidiary.

     (ii) “Event of Default” means, individually and collectively, (a) any “Event of
Default” as defined in the Fixed Rate Note Purchase Agreement and (b) any “Event of Default”
as defined in the Floating Rate Note Purchase Agreement.

     (iii) “Financing Agreements” means, individually and collectively, (a) the “Financing
Agreements” as defined in the Fixed Rate Note Purchase Agreement and (b) the “Financing
Agreements” as defined in the Floating Rate Note Purchase Agreement.

     (iv) “Fixed Rate Obligations” shall mean the “Obligations” as defined in the Fixed Rate
Note Purchase Agreement.

     (v) “Floating Rate Obligations” shall mean the “Obligations” as defined in the Floating
Rate Note Purchase Agreement.

     (vi) “Obligations” shall mean, individually and collectively, the Fixed Rate
Obligations and the Floating Rate Obligations.

     (vii) “Other Indebtedness” shall mean and include all now existing and hereafter
arising Indebtedness, or other obligations or liabilities, of each Grantor, whether as a
primary obligor, guarantor or otherwise, to the Secured Party, other than that which relates
to or arises under or in connection with the Note Purchase Agreements and the other
Financing Agreements to which such Grantor is a party.

     (viii) “Secured Obligations” shall mean and include all now existing and hereafter
arising (a) Fixed Rate Obligations of the Fixed Rate Issuers, Great Plains, Lightning,
Spelman, Kidron, Service Company and the Parent to the Secured Party under the Fixed Rate
Note Purchase Agreement and the Fixed Rate Notes, (b) Floating Rate Obligations of the
Floating Rate Issuer, Lightning, Spelman, Kidron, Service Company and the Parent to the
Secured Party under the Floating Rate Note Purchase Agreement and the Floating Rate Notes,
and (c) any other Obligations of the Grantors to the Secured Party under any of the other
Financing
Agreements to which any Grantor is a party, or under any Other Indebtedness, including the
following: (x) all obligations, liabilities, and indebtedness, whether for principal,
interest, fees, indemnities, expenses or otherwise, of the Grantors to the Secured Party,
now existing or hereafter incurred under either Note Purchase Agreement, any Notes, any of

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the other Financing Agreements, or any other agreement, undertaking, instrument or document
related to Other Indebtedness, as any of the same or any one or more of them may from time
to time be amended, restated, modified, or supplemented, together with any and all
extensions, renewals, refinancings, and refundings thereof in whole or in part (and
including obligations, liabilities, and indebtedness arising or accruing after the
commencement of any bankruptcy, insolvency, reorganization, or similar proceeding with
respect to any Grantor or any other Person, or which would have arisen or accrued but for
the commencement of such proceeding, even if the claim for such obligation, liability or
indebtedness is not enforceable or allowable in such proceeding, and including all
obligations, liabilities and indebtedness arising from any extensions of credit under or in
connection with the Financing Agreements, or any such other agreement, undertaking,
instrument or document, from time to time, regardless whether any such extensions of credit
are in excess of the amount committed under or contemplated by the Financing Agreements, or
any such other agreement, undertaking, instrument or document, or are made in circumstances
in which any condition to extension of credit is not satisfied); and (y) any sums advanced
by the Secured Party or which may otherwise become due pursuant to the provisions of either
Note Purchase Agreement, this Agreement or any other Financing Agreements to which any
Grantor is a party, or any such other agreement, undertaking, instrument or document, or
pursuant to any other document or instrument at any time delivered to the Secured Party in
connection therewith, including fees and charges, and indemnification obligations under any
such document or instrument, together with all interest payable on any of the foregoing,
whether such sums are advanced or otherwise become due before or after the entry of any
judgment for foreclosure or any judgment on any Financing Agreement or any such other
agreement, undertaking, instrument or document, or with respect to any default under any of
the Secured Obligations. For the avoidance of doubt, the Fixed Rate Issuers’ Collateral
shall at no time secure the Floating Rate Obligations.

     (ix) “Receivables” means all of the Collateral except Equipment, Goods, Deposit
Accounts, Software, Investment Property and Fixtures.

     (x) “UCC” means the Uniform Commercial Code as in effect in the State of Ohio on the
date hereof and as amended from time to time except to the extent that the conflict of law
rules of such Uniform Commercial Code shall apply the Uniform Commercial Code as in effect
from time to time in any other state to specific property or other matters.

          2. As security for the due and punctual payment and performance of the Secured Obligations in
full, each Grantor hereby agrees that the Secured Party shall have, and each Grantor hereby grants
to and creates in favor of the Secured Party, a continuing first priority lien on and security
interest under the UCC in and to the Collateral subject only to Permitted Encumbrances. Without
limiting the generality of Section 4 below, each Grantor further agrees that with respect to each
item of Collateral as to which (i) the creation of a valid and enforceable security interest is not
governed exclusively by the UCC or (ii) the perfection of a valid and enforceable first priority
security interest therein under the UCC cannot be accomplished either by the Secured Party taking
possession
thereof or by the filing in appropriate locations of appropriate UCC financing statements, such
Grantor will at its expense execute and deliver to the Secured Party and hereby does authorize the
Secured Party to execute and file such documents, agreements, notices, assignments and

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instruments
and take such further actions as may be reasonably requested by the Secured Party from time to time
for the purpose of creating a valid and perfected first priority lien and security interest on such
item, subject only to Permitted Encumbrances, enforceable against each Grantor and all third
parties to secure the Secured Obligations.

          3. Each Grantor represents and warrants to the Secured Party subject to any and all
regulations affecting such Grantor by the nature of its business as a public utility, that (a) such
Grantor has good and marketable title to the Collateral, (b) except for the security interest
granted to and created in favor of the Secured Party and Permitted Encumbrances, all the Collateral
is free and clear of any Lien, (c) such Grantor will defend the Collateral against all material
claims and demands of all persons at any time claiming the same or any interest therein, (d) each
Account and General Intangible is genuine and enforceable in accordance with its terms, subject to
reasonable reserves on such Grantor’s financial statements, and such Grantor will defend the same
against all claims, demands, recoupment, setoffs, and counterclaims, at any time asserted, and (e)
at the time any Account or General Intangible becomes subject to this Agreement, each such Account
or General Intangible will be a good and valid Account representing a bona fide sale of goods or
services by such Grantor and such goods will have been shipped to the respective account debtors or
the services will have been performed for the respective account debtors (or for those on behalf of
whom the account debtors are obligated on the Accounts), and no such Account or General Intangible
will at such time be subject to any claim for credit, allowance, setoff, recoupment, defense,
counterclaim or adjustment by any account debtor or otherwise, subject to reasonable reserves on
such Grantor’s financial statements, (f) the exact legal name of each Grantor is as set forth on
the signature page hereto, and (g) the state of incorporation, formation or organization as
applicable, of each Grantor is as set forth on Schedule A hereto.

          4. Each Grantor will faithfully preserve and protect the Secured Party’s security interest in
the Collateral as a prior perfected security interest under the UCC, superior and prior to the
rights of all third Persons, except for holders of Permitted Encumbrances, and will do all such
other acts and things and will, upon request therefor by the Secured Party, execute, deliver, file
and record, and each Grantor hereby authorizes the Secured Party to so file, all such other
documents and instruments, including, without limitation, financing statements, security
agreements, assignments and documents and powers of attorney with respect to the Collateral, and
pay all filing fees and taxes related thereto, as the Secured Party in its reasonable discretion
may deem necessary or advisable from time to time in order to attach, continue, preserve, perfect,
and protect said security interest (including the filing at any time or times after the date hereof
of financing statements under, and in the locations advisable pursuant to, the UCC); and each
Grantor hereby irrevocably appoints the Secured Party, its officers, employees and agents, or any
of them, as attorneys-in-fact for such Grantor to execute, deliver, file and record such items for
such Grantor and in such Grantor’s name, place and stead. This power of attorney, being coupled
with an interest, shall be irrevocable for the life of this Agreement.

          5. Each Grantor covenants and agrees, subject to restrictions imposed by any applicable law or
regulation, that:

               (i) it will defend the Secured Party’s right, title and lien on and security interest
in and to the Collateral and the proceeds thereof against the claims and demands of all
Persons

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               whomsoever, other than any Person claiming a right in the Collateral pursuant to an
agreement between such Person and the Secured Party;

               (ii) it will not suffer or permit to exist on any Collateral any Lien except for
Permitted Encumbrances;

               (iii) it will not take or omit to take any action, the taking or the omission of which
might result in a material alteration (except as permitted by the applicable Note Purchase
Agreement) or impairment of the Collateral of the Secured Party’s right under this
Agreement;

               (iv) it will not sell, assign or otherwise dispose of any portion of the Collateral
except as permitted in Section 10.6 [Disposition of Assets] of the applicable Note Purchase
Agreement;

               (v) it will (a) except for such Collateral delivered to the Secured Party pursuant to
this Section or otherwise now or hereafter under the control of the Secured Party, obtain
and maintain sole and exclusive possession of the Collateral, (b) maintain its chief
executive office and keep the Collateral and all records pertaining thereto at the locations
specified on the Security Interest Data Summary attached as Schedule A hereto, unless it
shall have given the Secured Party prior notice and taken any action reasonably requested by
the Secured Party to maintain its security interest therein, (c) notify the Secured Party if
an Account becomes evidenced or secured by an Instrument or Chattel Paper and deliver to the
Secured Party upon the Secured Party’s request therefor all Collateral consisting of
Instruments and Chattel Paper immediately upon such Grantor’s receipt of a request therefor,
(d) deliver to the Secured Party possession of all Collateral the possession of which is
required to perfect the Secured Party’s lien thereon or security interest therein or the
possession of which grants priority over a Person filing a financing statement with respect
thereto, (e) execute control agreements and cause, to the best of its ability, other Persons
to execute acknowledgments in form and substance reasonably satisfactory to the Secured
Party evidencing the Secured Party’s control with respect to all Collateral the control or
acknowledgment of which perfects the Secured Party’s security interest therein, including
Letters of Credit, Letter of Credit Rights, Electronic Chattel Paper, Deposit Accounts and
Investment Property, and (f) keep materially accurate and complete books and records
concerning the Collateral and such other books and records as the Secured Party may from
time to time reasonably require; and

               (vi) it will promptly furnish to the Secured Party such information and documents
relating to the Collateral as the Secured Party may reasonably request, including, without
limitation, all invoices, Documents, contracts, Chattel Paper, Instruments and other
writings pertaining to such Grantor’s contracts or the performance thereof, all of the
foregoing to be certified upon request of the Secured Party by an authorized officer of such
Grantor;

               (vii) it shall immediately notify the Secured Party if any Account arises out of
contracts with the United States or any department, agency or instrumentality thereof or any
one or more of the states of the United States or any department, agency, instrumentality
thereof, and upon the request of the Secured Party will execute any instruments and take any

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steps required by the Secured Party so that all monies due and to become due under such
contract shall be assigned to the Secured Party and notice of the assignment given to and
acknowledged by the appropriate government agency or authority under the Federal Assignment
of Claims Act;

               (viii) such Grantor will not change its state of incorporation, formation or
organization without the prior written consent of the Secured Party;

               (ix) such Grantor will not change its name without providing thirty (30) days prior
written notice to the Secured Party;

               (x) except as otherwise permitted by the applicable Note Purchase Agreement, such
Grantor shall preserve its corporate existence and shall not (a) in one, or a series of
related transactions, merge into or consolidate with any other entity, the survivor of which
is not a Grantor, or (b) sell all or substantially all of its assets;

               (xi) if such Grantor shall at any time acquire a Commercial Tort Claim, such Grantor
shall promptly notify the Secured Party in a writing signed by such Grantor of the details
thereof and grant to the Secured Party in such writing a security interest therein and in
the proceeds thereof, with such writing to be in forms and substance reasonably satisfactory
to the Secured Party and such writing shall constitute a supplement to Schedule B hereto;

               (xii) such Grantor hereby (a) authorizes the Secured Party to, at any time and from
time to time, file in any one or more jurisdictions financing statements that describe the
Collateral, together with continuation statements thereof and amendments thereto, and which
contain any information required by the UCC or any other applicable statute applicable to
such jurisdiction for the sufficiency or filing office acceptance of any financing
statements, continuation statements, or amendments, (b) agrees to furnish any such
information to the Secured Party promptly upon request, and (c) agrees that any such
financing statements, continuation statements, or amendments may be signed by the Secured
Party on behalf of such Grantor if the Secured Party so elects and may be filed at any time
in any jurisdiction; and

               (xiii) such Grantor shall at any time and from time to time take such steps as the
Secured Party may reasonably request as are necessary for the Secured Party to insure the
continued perfection of the Secured Party’s security interest in the Collateral with the
same priority required hereby and the preservation of its rights therein.

          6. Each Grantor assumes full responsibility for taking any and all necessary steps to preserve
the Secured Party’s rights with respect to the Collateral against all Persons other than anyone
asserting rights in respect of a Permitted Encumbrance. The Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in its possession if
the Secured Party takes such action for that purpose as a Grantor shall request in writing,
provided that such requested action will not, in the judgment of the Secured Party, impair the
security interest in the Collateral created hereby or the Secured Party’s rights in, or the value
of, the Collateral, and provided
further that such written request is received by the Secured Party in sufficient time to permit the
Secured Party to take the requested action.

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          7. (i) At any time and from time to time whether or not an Event of Default then exists and
without prior notice to or consent of any Grantor, the Secured Party may at its option take such
actions as the Secured Party deems appropriate (a) to attach, perfect, continue, preserve and
protect the Secured Party’s first priority security interest in or lien on the Collateral, (b) to
inspect, audit and verify the Collateral, including reviewing all of the Grantors’ books and
records and copying and making excerpts therefrom, and (c) to add all liabilities, obligations,
costs and expenses reasonably incurred in connection with the foregoing clauses (a) and (b) to the
Secured Obligations, to be paid by the Grantors to the Secured Party upon demand.

          (ii) At any time and from time to time after an Event of Default exists and is continuing and
without prior notice to or consent of any Grantor, the Secured Party may at its option take such
action as the Secured Party deems appropriate (a) to maintain, repair, protect and insure the
Collateral, and/or (b) to perform, keep, observe and render true and correct any and all covenants,
agreements, representations and warranties of the Grantors hereunder, and (c) to add all
liabilities, obligations, costs and expenses reasonably incurred in connection with the foregoing
clauses (a) and (b) to the Secured Obligations, to be paid by the Grantors to the Secured Party
upon demand.

          8. After there exists any Event of Default which has not been cured or waived under the Note
Purchase Agreements:

               (i) The Secured Party shall have and may exercise all the rights and remedies available
to a secured party under the UCC in effect at the time, and such other rights and remedies
as may be provided by law and as set forth below, including without limitation to take over
and collect all of the Grantors’ Receivables and all other Collateral, and to this end each
Grantor hereby appoints the Secured Party, its officers, employees and agents, as its
irrevocable, true and lawful attorneys-in-fact with all necessary power and authority to (a)
take possession immediately, with or without notice, demand, or legal process, of any of or
all of the Collateral wherever found, and for such purposes, enter upon any premises upon
which the Collateral may be found and remove the Collateral therefrom, (b) require the
Grantors to assemble the Collateral and deliver it to the Secured Party or to any place
reasonably designated by the Secured Party at the Grantors’ expense, (c) receive, open and
dispose of all mail addressed to such Grantor and notify postal authorities to change the
address for delivery thereof to such address as the Secured Party may designate, (d) demand
payment of the Receivables, (e) enforce payment of the Receivables by legal proceedings or
otherwise, (f) exercise all of the Grantors’ rights and remedies with respect to the
collection of the Receivables, (g) settle, adjust, compromise, extend or renew the
Receivables, (h) settle, adjust or compromise any legal proceedings brought to collect the
Receivables, (i) to the extent permitted by applicable law, sell or assign the Receivables
upon such terms, for such amounts and at such time or times as the Secured Party deems
advisable, (j) discharge and release the Receivables, (k) take control, in any manner, of
any item of payment or proceeds from any account debtor, (l) prepare, file and sign such
Grantor’s name on any Proof of Claim in Bankruptcy or similar document against any account
debtor, (m) prepare, file and sign such Grantor’s name on any notice of lien, assignment or
satisfaction of lien or similar document in
connection with the Receivables, (n) do all acts and things necessary, in the Secured
Party’s sole discretion, to fulfill any Grantor’s or any Guarantor’s obligations to the
Secured Party under the Note Purchase Agreements, Financing Agreements or otherwise, (o)
endorse the

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name of such Grantor upon any check, Chattel Paper, Document, Instrument,
invoice, freight bill, bill of lading or similar document or agreement relating to the
Receivables, (p) use such Grantor’s stationery and sign such Grantor’s name to verifications
of the Receivables and notices thereof to account debtors, (q) access and use the
information recorded on or contained in any data processing equipment or computer hardware
or software relating to the Receivables or other Collateral or proceeds thereof to which
such Grantor has access, (r) demand, sue for, collect, compromise and give acquittances for
any and all Collateral, (s) prosecute, defend or compromise any action, claim or proceeding
with respect to any of the Collateral, and (t) take such other action as the Secured Party
may deem appropriate, including extending or modifying the terms of payment of such
Grantor’s debtors. This power of attorney, being coupled with an interest, shall be
irrevocable for the life of this Agreement. To the extent permitted by law, each Grantor
hereby waives all claims of damages due to or arising from or connected with any of the
rights or remedies exercised by the Secured Party pursuant to this Agreement, except claims
for physical damage to the Collateral arising from gross negligence or willful misconduct by
the Secured Party.

     (ii) The Secured Party shall have the right to lease, sell or otherwise dispose of all
or any of the Collateral at public or private sale or sales for cash, credit or any
combination thereof, with such notice as may be required by law (it being agreed by each
Grantor that, in the absence of any contrary requirement of law ten (10) days’ prior notice
of a public or private sale of Collateral shall be deemed reasonable notice), in lots or in
bulk, for cash or on credit, all as the Secured Party, in its sole discretion, may deem
advisable. Such sales may be adjourned from time to time with or without notice. The
Secured Party shall have the right to conduct such sales on any Grantor’s premises or
elsewhere and shall have the right to use each Grantor’s premises without charge for such
sales for such time or times as the Secured Party may see fit. The Secured Party may
purchase all or any part of the Collateral at public or, if permitted by law, private sale
and, in lieu of actual payment of such purchase price, may set off the amount of such price
against the Secured Obligations.

     (iii) Each Grantor, at its cost and expense (including the cost and expense of any of
the following referenced consents, approvals etc.) will promptly execute and deliver or
cause the execution and delivery of all applications, certificates, instruments,
registration statements, and all other documents and papers the Secured Party may request in
connection with the obtaining of any consent, approval, registration, qualification, permit,
license, accreditation, or authorization of any other Governmental Authority or other Person
necessary or appropriate for the effective exercise of any rights hereunder or under the
other Financing Agreements. Without limiting the generality of the foregoing, each Grantor
agrees that in the event the Secured Party shall exercise its rights hereunder or pursuant
to the other Financing Agreements, to sell, transfer, or otherwise dispose of, or vote,
consent, operate, or take any other action in connection with any of the Collateral, such
Grantor shall execute and deliver (or cause to be executed and delivered) all applications,
certificates, assignments and other documents that the Secured Party requests to facilitate
such actions and shall otherwise promptly, fully, and diligently cooperate with the Secured
Party and any other Persons in
making any application for the prior consent or approval of any Governmental Authority or
any other Person to the exercise by the Secured Party of any such rights relating to all or
any of the Collateral. Furthermore, because each Grantor agrees that the remedies at law of
the

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Secured Party for failure of any Grantor to comply with this Subsection (iii) would be
inadequate, and that any such failure would not be adequately compensable in damages, each
Grantor agrees that this Subsection (iii) may be specifically enforced.

     (iv) Without limiting the rights and remedies of the Secured Party otherwise provided
hereunder and under the other Financing Agreements, the Secured Party may, without notice to
any Grantor which notice is expressly waived by each Grantor, in order to better secure the
Secured Party, to the extent permitted by law, direct the account debtors to make payments
of all monies paid or payable thereon directly to the Secured Party or to a lockbox
designated by the Secured Party (and, at the request of the Secured Party, the Grantors
shall indicate on all billings that payments thereon are to be made to the Secured Party)
and give any account debtors so notified and directed the receipt of the Secured Party for
any such payment as a full release for the amount so paid.

          9. The lien on and security interest in the Grantors’ Collateral granted to and created in
favor of the Secured Party by this Agreement shall be for the benefit of the Secured Party. The
Grantor shall remain liable to the Secured Party for and shall pay to the Secured Party, for the
Secured Party’s benefit, any deficiency which may remain after such sale or collection.

          10. If the Secured Party repossesses or seeks to repossess any of the Collateral pursuant to
the terms hereof because of the occurrence of an Event of Default, then to the extent it is
commercially reasonable for the Secured Party to store any Collateral on any of the Grantors’
premises, the Grantors hereby agree to lease to the Secured Party on a month-to-month tenancy for a
period not to exceed one hundred twenty (120) days at the Secured Party’s election, at a rental of
One Dollar ($1.00) per month, the premises on which the Collateral is located, provided it is
located on premises owned or leased by a Grantor. The foregoing rights shall be in addition to all
rights of the Secured Party granted under the Mortgages conveyed by the Grantors to the Secured
Party.

          11. No failure or delay on the part of the Secured Party in exercising any right, remedy,
power or privilege hereunder shall operate as a waiver thereof or of any other right, remedy, power
or privilege of the Secured Party hereunder; nor shall any single or partial exercise of any such
right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. No waiver of a single Event of Default shall be
deemed a waiver of a subsequent Event of Default. All waivers under this Agreement must be in
writing. The rights and remedies of the Secured Party under this Agreement are cumulative and in
addition to any rights or remedies which it may otherwise have, and the Secured Party may enforce
any one or more remedies hereunder successively or concurrently at its option.

          12. All notices, statements, requests and demands given to or made upon either party hereto in
accordance with the provisions of this Agreement shall be given or made as provided in Section 18
[Notices] of the applicable Note Purchase Agreement.

          13. Each Grantor agrees that as of the date hereof, all information contained in the Security
Interest Data Schedule attached hereto as Schedule A is accurate and complete and contains no
omission or misrepresentation. Each Grantor shall promptly notify the Secured Party, and in any
case within fifteen (15) days, of any changes in the information set forth thereon.

10

 

          14. Each Grantor acknowledges that the provisions hereof giving the Secured Party rights of
access to books, records and information concerning the Collateral and such Grantor’s operations
and providing the Secured Party access to such Grantor’s premises are intended to afford the
Secured Party with immediate access to current information concerning such Grantor and its
activities, including without limitation, the value, nature and location of the Collateral so that
the Secured Party can, among other things, make an appropriate determination after the occurrence
of an Event of Default, whether or when to exercise its other remedies hereunder and at law,
including without limitation, instituting a replevin action should such Grantor refuse to turn over
any Collateral to the Secured Party. Each Grantor further acknowledges that should such Grantor at
any time fail to promptly provide such information and access to the Secured Party, such Grantor
acknowledges that the Secured Party would have no adequate remedy at law to promptly obtain the
same. Each Grantor agrees that the provisions hereof may be specifically enforced by the Secured
Party and waives any claim or defense in any such action or proceeding that the Secured Party has
an adequate remedy at law.

          15. This Agreement shall be binding upon and inure to the benefit of the Secured Party and its
successors and assigns, and each Grantor and each of its successors and assigns, except that no
Grantor may assign or transfer such Grantor’s obligations hereunder or any interest herein.

          16. This Agreement shall be deemed to be a contract under the laws of the State of Ohio and
for all purposes shall be governed by and construed in accordance with the laws of said State
excluding its rules relating to conflicts of law.

          17. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction.

          18. Each Grantor hereby irrevocably submits to the nonexclusive jurisdiction of the Court of
Common Pleas of Lake County, Ohio or the District Court of the United States for the Northern
District of Ohio in any action or proceeding arising out of or relating to this Agreement, and the
Grantor hereby irrevocably agrees that all claims in respect of such action or proceeding may be
heard and determined in the Court of Common Pleas of Lake County, Ohio or the District Court of the
United States for the Northern District of Ohio. The Grantor hereby waives to the fullest extent
it may effectively do so, the defense of an inconvenient forum to the maintenance of any such
action or proceeding.

          19. Each Grantor and the Secured Party hereby waives any right to a trial by a jury in
respect of any litigation directly or indirectly arising out of, under, or in connection with this
Agreement or any other documents or transactions relating thereto.

          20. This Agreement may be executed in any number of counterparts, and by different parties
hereto in separate counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same instrument. Each Grantor acknowledges and
agrees that a telecopy transmission to the Secured Party of the signature pages hereof purporting
to be

11

 

signed on behalf of such Grantor shall constitute effective and binding execution and
delivery hereof by such Grantor.

          21. Additional Subsidiaries that are required by the terms of Section 9.8 of each of the Note
Purchase Agreements, shall execute and deliver to the Secured Party an Addendum in the form of
Exhibit A attached hereto and shall, thereafter, become a Grantor hereunder.

[Signature Page Follows]

12

 

          In Witness Whereof, and intending to be legally bound, the parties hereto have caused
this Agreement to be duly executed as of the date first written above.

	 	 	 	 	 
	 	Northeast Ohio Natural Gas Corp.

 	 
	 	By  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Orwell Natural Gas Company

 	 
	 	By  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Brainard Gas Corp. 

 	 
	 	By  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Lightning Pipeline Company, Inc. 

 	 
	 	By  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Kidron Pipeline, LLC

 	 
	 	By  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Spelman Pipeline Holdings, LLC

 	 
	 	By  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 

13

 

	 	 	 	 	 

	 	 	 	 	 
	 	Gas Natural Service Company, LLC

 	 
	 	By  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Gas Natural Inc. 

 	 
	 	By  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 

14

 

          This Agreement is hereby accepted and agreed to as of the date thereof.

	 	 	 	 	 
	 	SECURED PARTY:

Sun Life Assurance Company of Canada

 	 
	 	By  	/s/ John Chamberlain
 	 
	 	 	Name:  	John Chamberlain 	 
	 	 	Title:  	Senior Director, Private Fixed

Income 	 
	 
	 	 	 
	 	By 	        /s/ Paul Sinclair
 	 
	 	 	Name:  	Paul Sinclaim 	 
	 	 	Title:  	Managing Director, Head of

PrivateDebt, Private Fixed Income 	 
	 

15exv10w8

EXHIBIT 10.8

Execution Copy

Pledge Agreement

     This Pledge Agreement, dated as of May 3, 2011 (as amended, restated, supplemented or
modified from time to time, this “Agreement”), is given, made and entered into by Northeast
Ohio Natural Gas Corp., an Ohio corporation (“NEO”), Orwell Natural Gas Company, an
Ohio corporation (“Orwell”), Brainard Gas Corp., an Ohio corporation (“Brainard”;
Brainard, NEO and Orwell are referred to herein, collectively, as the “Fixed Rate Issuers” and,
individually, as a “Fixed Rate Issuer”), Great Plains Natural Gas Company, an Ohio
corporation, in its capacity as issuer of the hereinafter defined Floating Rate Notes (the
“Floating Rate Issuer) and in its capacity as guarantor under the hereinafter defined Fixed Rate
Note Purchase Agreement (“Great Plains), Lightning Pipeline Company, Inc., an Ohio
corporation (“Lightning”), Spelman Pipeline Holdings, LLC, an Ohio limited liability
company (“Spelman”), Kidron Pipeline, LLC, an Ohio limited liability company (“Kidron”),
Gas Natural Service Company, LLC, an Ohio limited liability company (“Service Company”),
and Gas Natural Inc., an Ohio corporation (the “Parent”; the Parent, the Fixed Rate
Issuers, the Floating Rate Issuer, Great Plains, Lightning, Spelman, Kidron and Service Company are
referred to herein, collectively, as the “Initial Pledgors”) and any new Subsidiary of any Initial
Pledgor, whether now existing or hereafter formed or acquired, which becomes party to this
Agreement pursuant to Section 24 hereof (collectively, together with the Initial Pledgors, and in
each case with its respective successors and assigns, including debtors-in-possession on behalf
thereof, the “Pledgors” and, individually, a “Pledgor”), as the pledgors of the pledged interests
described below, and Sun Life Assurance Company of Canada (the “Secured Party”), as the
pledgee, in connection with those certain Note Purchase Agreements (as defined below).

     Whereas, pursuant to that certain Note Purchase Agreement dated as of November 1,
2010 by and among the Secured Party, the Fixed Rate Issuers, Great Plains, Lightning and the
Parent, as amended by the First Amendment and Joinder to Note Purchase Agreement dated as of May 3,
2011 by and among the Secured Party, the Fixed Rate Issuers, Great Plains, Lightning, Spelman,
Kidron, Service Company and the Parent (as so amended, and as from time to time further amended,
restated, supplemented or otherwise modified, the “Fixed Rate Note Purchase Agreement”) (i) the
Secured Party has agreed to purchase $15,334,000 aggregate principal amount of the Fixed Rate
Issuers’ Senior Secured Guaranteed Notes due June 1, 2017 (the “Fixed Rate Notes”) and (ii) Great
Plains, Lightning, Spelman, Kidron, Service Company and the Parent have each agreed to jointly and
severally guarantee the Guaranteed Obligations (as defined therein).

     Whereas, pursuant to that certain Note Purchase Agreement dated as of November 1,
2010 by and among the Secured Party, the Floating Rate Issuer, Lightning and the Parent, as amended
by the First Amendment and Joinder to Note Purchase Agreement dated as of May 3,
2011 by and among the Secured Party, the Floating Rate Issuer, Lightning, Spelman, Kidron,
Service Company and the Parent (as so amended, and as from time to time further amended, restated,
supplemented or otherwise modified, the “Floating Rate Note Purchase Agreement”; the Floating Rate
Note Purchase Agreement and the Fixed Rate Note Purchase Agreement are referred to herein,
collectively, as the “Note Purchase Agreements” and, individually, as a “Note

1

 

Purchase Agreement”)
(i) the Secured Party has agreed to purchase $3,000,000 aggregate principal amount of the Floating
Rate Issuer’s Floating Rate Senior Secured Guaranteed Notes due 2013 (the “Floating Rate Notes”;
the Floating Rate Notes and the Fixed Rate Notes are referred to herein, collectively, as the
“Notes” and, individually, as a “Note”) and (ii) Lightning, Spelman, Kidron, Service Company and
the Parent have each agreed to jointly and severally guarantee the Guaranteed Obligations (as
defined therein).

     Whereas, in order to induce the Secured Party to enter into the Note Purchase
Agreements and other Financing Agreements (as hereinafter defined) and to induce the Secured Party
to purchase the Notes, each Pledgor has agreed to secure its obligations to the Secured Party under
each Note Purchase Agreement, as applicable, and the other Financing Agreements by pledging the
Pledged Collateral (as hereinafter defined) owned by such Pledgor to the Secured Party as more
fully described herein.

     Whereas, the Initial Pledgors contemplate that from time to time after the date
hereof, additional Subsidiaries may, subject to the terms and conditions of Section 9.8 of each of
the Note Purchase Agreements, enter into joinder agreements to the Financing Agreements and the
Secured Party desires that such Subsidiaries become subject to this Agreement pursuant to the
requirements of Section 24 hereof.

     Now, Therefore, intending to be legally bound hereby, the parties hereto hereby agree
as follows:

     1. Defined Terms. Except as otherwise expressly provided herein, capitalized terms used in
this Agreement shall have the respective meanings assigned to them in the Note Purchase Agreements.
Where applicable and except as otherwise expressly provided herein, terms used herein (whether or
not capitalized) shall have the respective meanings assigned to them in the Uniform Commercial Code
as enacted in Ohio as amended from time to time (the “UCC”). In addition, the following terms as
used herein shall have the following meanings:

     “Equity Interests” means all securities, shares, units, options, warrants, put rights, call
rights, similar rights, participations, or other equivalents (regardless of how designated) of or
in a corporation, partnership, limited liability company, or similar entity, whether voting or
nonvoting, certificated or uncertificated, including general partner partnership interests, limited
partner partnership interests, common stock, preferred stock, or any other “equity security” (as
such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934).

     “Event of Default” shall mean, individually and collectively, (i) any “Event of Default” as
defined in the Fixed Rate Note Purchase Agreement and (ii) any “Event of Default” as defined in the
Floating Rate Note Purchase Agreement.

2

 

     “Financing Agreements” shall mean, individually and collectively, (i) the “Financing
Agreements” as defined in the Fixed Rate Note Purchase Agreement and (ii) the “Financing
Agreements” as defined in the Floating Rate Note Purchase Agreement.

     “Fixed Rate Obligations” shall mean the “Obligations” as defined in the Fixed Rate Note
Purchase Agreement.

     “Floating Rate Obligations” shall mean the “Obligations” as defined in the Floating Rate Note
Purchase Agreement.

     “Governmental Rule” shall mean any law, statute, rule, regulation, permit, license, treaty,
ordinance, order, writ, injunction, decree, judgment, guideline, award, standard, directive or
decision of any governmental authority, whether in existence on the date hereof or whether issued,
enacted or adopted after the date hereof, and any change therein or in the interpretation or
application thereof following the date hereof.

     “Marketable Securities” shall mean securities that are traded on any national stock exchange
or the OTC Bulletin Board, but shall not include any Equity Interests held by a Pledgor in any
Subsidiary or other Affiliate.

     “Obligations” shall mean, individually and collectively, the Fixed Rate Obligations and the
Floating Rate Obligations.

     “Other Indebtedness” shall mean and include all now existing and hereafter arising
Indebtedness, or other obligations or liabilities, of each Pledgor, whether as a primary obligor,
guarantor or otherwise, to the Secured Party, other than that which relates to or arises under or
in connection with the Note Purchase Agreements and the other Financing Agreements to which such
Pledgor is a party.

     “Pledged Collateral” shall mean and include, with respect to each Pledgor, all of such
Pledgor’s present and future right, title and interest in and to the following: (i) as of the date
of this Agreement, the Equity Interests described on Schedule A hereto and made a part hereof, the
Equity Interests hereafter described in any Pledge Supplement or Addendum, and all investment
property, capital stock, shares, securities, warrants, options, put rights, call rights, similar
rights, and all other ownership or participation interests related to such pledged Equity
Interests and the revenue, income, or profits thereof (the “Investments”); (ii) all rights and
privileges pertaining to the Investments, including, without limitation, all present and future
Investments receivable in respect of or in exchange for any Investments, all rights under
shareholder agreements and other similar agreements relating to any Investments, and all rights to
subscribe for Investments, whether or not incidental to or arising from ownership of any
Investments; (iii) all cash, interest, stock and other dividends or distributions paid or payable
on any of the foregoing, and together with whatever is received when any of the foregoing is sold,
exchanged, replaced or otherwise disposed of, including all proceeds, as such term is defined in
the UCC; and (iv) all cash and non-cash proceeds (including, without limitation, insurance
proceeds) of any of the foregoing property, all products thereof, and all additions and accessions
thereto, substitutions therefor and
replacements thereof; provided, however, that “Pledged Collateral” does not include any Equity
Interests of an Unrestricted Subsidiary.

     “Secured Obligations” shall mean and include all now existing and hereafter arising (a) Fixed
Rate Obligations of the Fixed Rate Issuers, Great Plains, Lightning, Spelman, Kidron,

3

 

Service
Company and the Parent to the Secured Party under the Fixed Rate Note Purchase Agreement and the
Fixed Rate Notes, (b) Floating Rate Obligations of the Floating Rate Issuer, Lightning, Spelman,
Kidron, Service Company and the Parent to the Secured Party under the Floating Rate Note Purchase
Agreement and the Floating Rate Notes, and (c) any other Obligations of the Pledgors to the Secured
Party under any of the other Financing Agreements to which any Pledgor is a party, or under any
Other Indebtedness, including the following: (i) all obligations, liabilities, and indebtedness,
whether for principal, interest, fees, indemnities, expenses or otherwise, of the Pledgors to the
Secured Party, now existing or hereafter incurred under either Note Purchase Agreement, any Notes,
any of the other Financing Agreements, or any other agreement, undertaking, instrument or document
related to Other Indebtedness, as any of the same or any one or more of them may from time to time
be amended, restated, modified, or supplemented, together with any and all extensions, renewals,
refinancings, and refundings thereof in whole or in part (and including obligations, liabilities,
and indebtedness arising or accruing after the commencement of any bankruptcy, insolvency,
reorganization, or similar proceeding with respect to any Pledgor or any other Person, or which
would have arisen or accrued but for the commencement of such proceeding, even if the claim for
such obligation, liability or indebtedness is not enforceable or allowable in such proceeding, and
including all obligations, liabilities and indebtedness arising from any extensions of credit under
or in connection with the Financing Agreements, or any such other agreement, undertaking,
instrument or document, from time to time, regardless whether any such extensions of credit are in
excess of the amount committed under or contemplated by the Financing Agreements, or any such other
agreement, undertaking, instrument or document, or are made in circumstances in which any condition
to extension of credit is not satisfied); and (ii) any sums advanced by the Secured Party or which
may otherwise become due pursuant to the provisions of either Note Purchase Agreement, this
Agreement or any other Financing Agreements to which any Pledgor is a party, or any such other
agreement, undertaking, instrument or document, or pursuant to any other document or instrument at
any time delivered to the Secured Party in connection therewith, including fees and charges, and
indemnification obligations under any such document or instrument, together with all interest
payable on any of the foregoing, whether such sums are advanced or otherwise become due before or
after the entry of any judgment for foreclosure or any judgment on any Financing Agreement or any
such other agreement, undertaking, instrument or document, or with respect to any default under any
of the Secured Obligations. For the avoidance of doubt, the Fixed Rate Issuers’ Pledged Collateral
shall at no time secure the Floating Rate Obligations.

     2. Grant of Security Interests. (a) To secure on a first priority perfected basis the payment
and performance of all Secured Obligations, in full, each Pledgor hereby grants to the Secured
Party a continuing first priority security interest under the UCC in and hereby pledges to the
Secured Party, in each case for the benefit of the Secured Party, all of such Pledgor’s now
existing and hereafter acquired or arising right, title and interest in, to, and under the Pledged
Collateral, whether now or hereafter existing and wherever located.

     (b) Upon the execution and delivery of this Agreement, each Pledgor shall deliver to and
deposit with the Secured Party in pledge, all of such Pledgor’s certificates, instruments or other
documents comprising or evidencing the Pledged Collateral, together with undated stock powers,
instruments or other documents signed in blank by such Pledgor. In the event that any

4

 

Pledgor
should ever acquire or receive certificates, securities, instruments or other documents evidencing
the Pledged Collateral, such Pledgor shall deliver to and deposit with the Secured Party in pledge
all such certificates, securities, instruments or other documents which evidence the Pledged
Collateral.

     (c) If any Pledgor shall acquire (by purchase, stock dividend or otherwise) any additional
Pledged Collateral at any time or from time to time after the date hereof, such Pledged Collateral
shall automatically (and without any further action being required to be taken) be subject to the
pledge and security interests created pursuant to Section 2(a) hereof and, furthermore, the Pledgor
will promptly thereafter take (or cause to be taken) all action with respect to such Pledged
Collateral in accordance with the procedures set forth in Section 2(b) hereof, and will promptly
thereafter deliver to the Secured Party a supplement to this Pledge Agreement substantially in the
form of Exhibit B hereto (each such supplement, a “Pledge Supplement”) describing such Pledged
Collateral and certifying that the same has been duly pledged in favor of the Secured Party
hereunder. Notwithstanding the forgoing, solely with respect to any Marketable Securities that are
from time to time acquired by a Pledgor in the ordinary course (other than Marketable Securities
held by a securities intermediary and subject of a control agreement as provided in Section 3(b)
below), so long as no Default or Event of Default is in existence, such Pledgor shall be permitted
to deliver any such Marketable Securities, together with all other related deliveries pursuant to
this Section 2(b) and (c), on or prior to the last day of the calendar quarter immediately
following the date of such Pledgor’s acquisition of any such Marketable Securities.

     3. Further Assurances. (a) Prior to or concurrently with the execution of this Agreement, and
thereafter at any time and from time to time upon reasonable request of the Secured Party, each
Pledgor shall execute and deliver to the Secured Party all financing statements, continuation
financing statements, assignments, certificates and documents of title, affidavits, reports,
notices, schedules of account, letters of authority, further pledges, powers of attorney and all
other documents (collectively, the “Collateral Documents”) which the Secured Party may reasonably
request, in form reasonably satisfactory to the Secured Party, and take such other action that the
Secured Party may reasonably request, to perfect and continue perfected and to create and maintain
the first priority status of the Secured Party’s security interest in the Pledged Collateral and to
fully consummate the transactions contemplated under this Agreement. Each Pledgor agrees that the
Secured Party may record any one or more financing statements under the applicable Uniform
Commercial Code with respect to the pledge and security interest herein granted. Each Pledgor
hereby irrevocably makes, constitutes and appoints the Secured Party (and any of the Secured
Party’s officers or employees or agents designated by the Secured Party) as such Pledgor’s true and
lawful attorney with power to sign the name of such Pledgor on all or any of the Collateral
Documents which the Secured Party determines must be executed, filed, recorded or sent in order to
perfect or continue perfected the Secured Party’s security interest in the Pledged Collateral in
any jurisdiction. Such power, being coupled with an interest, is irrevocable until all of the
Secured Obligations have been indefeasibly paid, in cash, in full.
Notwithstanding the foregoing, the Secured Party agrees not to exercise its rights under such power
of attorney until an Event of Default has occurred or exists.

5

 

     (b) Notwithstanding anything to the contrary set forth in this Section 3 or elsewhere in this
Agreement, either Note Purchase Agreement or any other Financing Agreement, if, at any time and
from time to time, any Pledged Collateral (including any certificate or instrument representing or
evidencing any Pledged Collateral) is maintained by a “securities intermediary’’ (as defined in the
UCC) or is otherwise in the possession of a Person other than the Secured Party or a Pledgor (a
“Holder”), then the Pledgors shall immediately, at the Secured Party’s option, either cause such
Pledged Collateral to be delivered into the Secured Party’s possession, or cause such Holder to
enter into a control agreement, in form and substance satisfactory to the Secured Party, and take
all other steps deemed necessary by the Secured Party to perfect the security interest of the
Secured Party in such Pledged Collateral, all pursuant to Sections 9-106 and 9-313 of the UCC or
other applicable law governing the perfection of the Secured Party’s security interest in the
Collateral in the possession of such Holder. In the event any such securities intermediary
provides any notice of its intention to terminate such control agreement, the Secured Party shall
have the right to exercise exclusive control over any Pledged Collateral subject to such control
agreement.

     (c) Any and all Pledged Collateral (including dividends, interest, and other cash
distributions) at any time received or held by a Pledgor shall be so received or held in trust for
the Secured Party, shall be segregated from other funds and property of such Pledgor and shall be
forthwith delivered to the Secured Party in the same form as so received or held, with any
necessary indorsements; provided that cash dividends or distributions received by such Pledgor, may
be retained by such Pledgor (without having to be segregated from other funds and property of such
Pledgor) in accordance with Section 19.

     (d) If at any time, and from time to time, any Pledged Collateral consists of an
uncertificated security or a security in book entry form, then the applicable Pledgor shall
promptly cause such Pledged Collateral to be registered or entered, as the case may be, in the name
of the Secured Party, or otherwise cause the Secured Party’s security interest thereon to be
perfected in accordance with applicable law. Notwithstanding the forgoing, solely with respect to
any Marketable Securities consisting of an uncertificated security or a security in book entry form
that are from time to time acquired by a Pledgor in the ordinary course (other than Marketable
Securities held by a securities intermediary and subject of a control agreement as provided in
Section 3(b) above), so long as no Default or Event of Default is in existence, such Pledgor shall
be permitted to cause such Marketable Securities to be so registered or entered (or otherwise
perfected in accordance with applicable law) on or prior to the last day of the calendar quarter
immediately following the date of such Pledgor’s acquisition of any such Marketable Securities.

     4. Representations and Warranties. Each Pledgor hereby represents and warrants to the Secured
Party as follows:

     (a) Such Pledgor has and will continue to have (or, in the case of any after-acquired
Pledged Collateral at the time such Pledgor acquires rights in such Pledged
Collateral, will have and will continue to have) title to such Pledgor’s Pledged Collateral,
free and clear of all liens, charges or encumbrances other than those in favor of the
Secured Party and Permitted Encumbrances;

6

 

     (b) The Equity Interests constituting such Pledgor’s Pledged Collateral have been duly
authorized and validly issued to such Pledgor, are fully paid and nonassessable, and
constitute the percentage of all of the issued and outstanding capital stock of each of such
Pledgor’s Subsidiaries as set forth on Schedule A attached hereto;

     (c) The security interests in the Pledged Collateral granted hereunder are valid,
perfected and of first priority, subject to the lien, charge or encumbrance of no other
Person, and all actions necessary to achieve such perfection have been duly taken;

     (d) There are no restrictions upon the voting rights associated with, or upon the
transfer of, the Pledged Collateral and such Pledgor has the power and authority and
unencumbered right to vote, pledge and grant a security interest in or otherwise transfer
its Pledged Collateral free of any liens, charges or encumbrances (except for Permitted
Encumbrances) and without obtaining the consent of any other Person;

     (e) Such Pledgor has all necessary power to execute, deliver and perform this
Agreement;

     (f) There are no actions, suits, proceedings or investigations pending or to such
Pledgor’s best knowledge after due inquiry, threatened against or affecting any Pledgor with
respect to the Pledged Collateral, at law or in equity or before or by any Governmental
Authority, and no Pledgor is in default with respect to any judgment, writ, injunction,
decree, rule or regulation which could adversely affect any Pledgor’s performance hereunder
or any of the Pledged Collateral;

     (g) This Agreement has been duly executed and delivered and constitutes the valid and
legally binding obligation of such Pledgor, enforceable in accordance with its terms, except
to the extent that enforceability of this Agreement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the enforceability of
creditors’ rights generally or limiting the right of specific performance;

     (h) Neither the execution or delivery by such Pledgor of this Agreement, nor the
compliance with the terms and provisions hereof, will violate any material provision of any
Governmental Rules or conflict with or result in a breach of any of the terms, conditions or
provisions of any judgment, order, injunction, decree or ruling of any Governmental
Authority to which such Pledgor or any of such Pledgor’s property is subject or any
provision of any agreement, understanding or arrangement to which such Pledgor is a party or
by which such Pledgor or any of such Pledgor’s property is bound;

     (i) Such Pledgor’s exact legal name is as set forth on the signature page hereto;

     (j) The jurisdiction of organization of such Pledgor is as set forth on Schedule A
hereto;

7

 

     (k) All rights of such Pledgor in connection with such Pledgor’s ownership of its
Subsidiaries are evidenced and governed solely by the stock certificates, instruments or
other documents evidencing ownership and organizational documents of such Subsidiaries, and
no shareholder, voting or other similar agreements are applicable to any of the Pledged
Collateral or any of such Pledgor’s rights with respect thereto; and the organizational
documents of such Subsidiaries contain no restrictions on the rights of shareholders other
than those that normally would apply to a company organized under the laws of the
jurisdiction of organization of each such Subsidiary; and

     (l) The Pledged Collateral does not include Margin Stock and no part of the proceeds
from the sale of the Notes under either Note Purchase Agreement, as applicable, will be
used, directly or indirectly, for the purpose of purchasing or carrying Margin Stock.
“Margin Stock” as used in this clause (l) shall have the meaning ascribed to such term by
Regulation U of the Board of Governors of the Federal Reserve System of the United States.

     5. General Covenants. Each Pledgor hereby covenants and agrees as follows:

     (a) Such Pledgor shall do all reasonable acts that may be necessary and appropriate to
maintain, preserve and protect the Pledged Collateral, such Pledgor shall be responsible for
the risk of loss of, damage to, or destruction of the Pledged Collateral owned by such
Pledgor, unless such loss is the result of the gross negligence or willful misconduct of the
Secured Party;

     (b) Such Pledgor shall appear in and defend any action or proceeding of which such
Pledgor is aware which could reasonably be expected to affect such Pledgor’s title to, or
the Secured Party’s interest in, the Pledged Collateral or the proceeds thereof; provided,
however, that with the prior written consent of the Secured Party, which shall not be
unreasonably withheld or delayed, such Pledgor may settle such actions or proceedings with
respect to the Pledged Collateral;

     (c) Such Pledgor shall, and shall cause each other Pledgor to, keep separate, accurate
and complete records of the Pledged Collateral, disclosing the Secured Party’s security
interest hereunder;

     (d) Such Pledgor shall comply with all material Governmental Rules applicable to the
Pledged Collateral unless any noncompliance would not individually or in the aggregate
materially impair the use or value of the Pledged Collateral or the Secured Party’s rights
hereunder;

     (e) Such Pledgor shall pay any and all taxes, duties, fees or imposts of any nature
imposed by any Governmental Authority on any of the Pledged Collateral, except to the extent
contested in good faith by appropriate proceedings;

     (f) Such Pledgor shall permit the Secured Party, its officers, employees and agents, on
reasonable prior notice prior to the existence of an Event of Default (or in the

8

 

absence of
prior notice following and during the continuation of an Event of Default), to inspect all
books and records related to the Pledged Collateral;

     (g) Except as permitted by the Note Purchase Agreements, during the term of this
Agreement, such Pledgor shall not sell, assign, replace, retire, transfer or otherwise
dispose of such Pledgor’s Pledged Collateral;

     (h) Such Pledgor will not change its state of principal residence without providing
thirty (30) days prior written notice to the Secured Party; and

     (i) Such Pledgor will not change its name without providing thirty (30) days prior
written notice to the Secured Party.

     6. Other Rights with Respect to Pledged Collateral. In addition to the other rights with
respect to the Pledged Collateral granted to the Secured Party hereunder, at any time and from time
to time, after and during the continuation of an Event of Default, the Secured Party, at its option
and at the expense of the Pledgors, may (a) transfer into its own name, or into the name of its
nominee, all or any part of the Pledged Collateral, thereafter receiving all dividends, income or
other distributions upon the Pledged Collateral, (b) take control of and manage all or any of the
Pledged Collateral, (c) apply to the payment of any of the Secured Obligations, whether any be due
and payable or not, any moneys, including cash dividends and income from any Pledged Collateral,
now or hereafter in the hands of the Secured Party, on deposit or otherwise, belonging to any
Pledgor, as the Secured Party in its sole discretion shall determine, and (d) do anything which the
Pledgors are required but fail to do hereunder.

     7. Additional Remedies upon Event of Default. Except as otherwise provided in Section 11
hereof upon the Pledged Collateral Release Event (as defined below), upon the occurrence of any
Event of Default and while such Event of Default shall be continuing, the Secured Party shall have,
in addition to all rights and remedies of a secured party under the UCC or other applicable
Governmental Rules, and in addition to its rights under Section 6 above and under the other
Financing Agreements, the following rights and remedies:

(a) The Secured Party may, after ten (10) days’ advance written notice to the Pledgors
sell, assign, give an option or options to purchase or otherwise dispose of the Pledged
Collateral or any part thereof at a public or private sale, at any of the Secured Party’s
offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms
as the Secured Party may deem commercially reasonable. Each Pledgor agrees that ten (10)
days’ advance written notice of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification. The Secured
Party shall not be obligated to make any sale of Pledged Collateral regardless of notice of
sale having been given. The Secured Party may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each Pledgor
recognizes that the Secured Party may be compelled to resort to
one or more private sales of the Pledged Collateral to a restricted group of purchasers who
will be obligated to agree, among other things, to acquire such

9

 

securities, shares, capital
stock, investment property or ownership interests for their own account for investment and
not with a view to the distribution or resale thereof.

     (b) The proceeds of any collection, sale or other disposition of the Pledged
Collateral, or any part thereof, shall, after the Secured Party has made all deductions of
expenses, including but not limited to attorneys’ fees and other expenses incurred in
connection with repossession, collection, sale or disposition of such Pledged Collateral or
in connection with the enforcement of the Secured Party’s rights with respect to the Pledged
Collateral, including in any insolvency, bankruptcy or reorganization proceedings, be
applied against the Secured Obligations, whether or not all the same be then due and
payable, as follows:

     (i) first, to the Secured Obligations and to reimburse the Secured Party for
out-of-pocket costs, expenses and disbursements, including without limitation
reasonable attorneys’ fees and legal expenses, incurred by the Secured Party in
connection with realizing on the Pledged Collateral or collection of any obligation
of the Pledgor under any of the Financing Agreements, including advances made
subsequent to an Event of Default by the Secured Party for the reasonable
maintenance, preservation, protection or enforcement of, or realization upon, the
Pledged Collateral, including without limitation advances for taxes, insurance, and
the like, and reasonable expenses incurred to sell or otherwise realize on, or
prepare for sale of or other realization on, any of the Pledged Collateral, in such
order as the Secured Party may determine in its discretion; and

     (ii) the balance, if any, as required by Governmental Rules.

     8. Lender’s Duties. The powers conferred on the Secured Party hereunder are solely to protect
its interest in the Pledged Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Pledged Collateral in its possession and the accounting
for moneys actually received by it hereunder, the Secured Party shall have no duty as to any
Pledged Collateral or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Pledged Collateral.

     9. [Intentionally Omitted.]

     10. No Waiver; Cumulative Remedies. No failure to exercise, and no delay in exercising, on
the part of the Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or privilege hereunder
preclude any further exercise thereof or the exercise of any other right, power or privilege. No
waiver of a single Event of Default shall be deemed a waiver of a subsequent Event of Default. The
remedies herein provided are cumulative and not exclusive of any remedies provided under the other
Financing Agreements or by Governmental Rules and the Secured Party may enforce any one or more
remedies hereunder successively or concurrently at its option. Each Pledgor waives any right to
require the Secured Party to proceed against any
other Person or to exhaust any of the Pledged Collateral or other security for the Secured
Obligations or to pursue any remedy in the Secured Party’s power.

10

 

     11. No Discharge Until Indefeasible Payment of the Secured Obligations; Certain Pledged
Collateral Release Event. The pledge, security interests, and other Liens and the obligations of
each Pledgor hereunder shall not be discharged or impaired or otherwise diminished by any failure,
default, omission, or delay, willful or otherwise, by the Secured Party or any other obligor on any
of the Secured Obligations, or by any other act or thing or omission or delay to do any other act
or thing which may or might in any manner or to any extent vary the risk of the Pledgors or which
would otherwise operate as a discharge of the Pledgors as a matter of law or equity, except that,
and notwithstanding anything contained in this Agreement to the contrary, in the event that all
principal of, interest on, and make-whole amount, other premium and break charges, if any, with
respect to, the Notes and the other Obligations of the Pledgors then due under each of the other
Financing Agreements have been performed and satisfied in full (the “Pledged Collateral Release
Event"), then the Secured Party shall release its pledge, security interest and other Liens in the
Pledged Collateral, and promptly return to the Pledgors any certificates in its possession
evidencing such Pledged Collateral. Without limiting the generality of the foregoing, including
without limitation, the terms and conditions of the Pledged Collateral Release Event, each Pledgor
hereby consents to, and the pledge, security interests, and other Liens given by each Pledgor
hereunder shall not be diminished, terminated, or otherwise similarly affected by any of the
following at any time and from time to time:

     (a) Any lack of genuineness, legality, validity, enforceability, or allowability, (in a
bankruptcy, insolvency, reorganization or similar proceeding, or otherwise), or any
avoidance or subordination, in whole or in part, of any Financing Agreement or any of the
Secured Obligations and regardless of any Governmental Rules, regulation, or order now or
hereafter in effect in any jurisdiction affecting any of the Secured Obligations, any of the
terms of the Financing Agreements, or any rights of the Secured Party or any other Person
with respect thereto;

     (b) Any increase, decrease, or change in the amount, nature, type or purpose of any of
the Secured Obligations (whether or not contemplated by the Financing Agreements as
presently constituted); any change in the time, manner, method, or place of payment or
performance of or in any other term of, any of the Secured Obligations; any execution or
delivery of any additional Financing Agreements or any amendment, modification or supplement
to, or refinancing or refunding’ of, any Financing Agreement or any of the Secured
Obligations;

     (c) Any failure to assert any breach of or default under any Financing Agreement or any
of the Secured Obligations; any extensions of credit in excess of the amount committed under
or contemplated by the Financing Agreements, or in circumstances in which any condition to
such extensions of credit has not been satisfied; any other exercise or non-exercise, or any
other failure, omission, breach, default, delay, or wrongful action in connection with any
exercise or non-exercise, or any right or remedy against the Pledgors or any other Person
under or in connection with any Financing Agreement or any of the Secured Obligations; any
refusal of payment or
performance of any of the Secured Obligations, whether or not with any reservation of rights
against any Pledgor; or any application of collections (including collections resulting from
realization upon any direct or indirect security for the Secured

11

 

Obligations) or other obligations, if any, not entitled to the benefits of this Agreement, in preference to
Secured Obligations or, if any collections are applied to Secured Obligations, any
application to particular Secured Obligations;

     (d) Any taking, exchange, amendment modification, supplement, termination,
subordination, release, loss, or impairment of, or any failure to protect, perfect, or
preserve the value of, or any enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or any failure, omission, breach, default, delay, or
wrongful action by the Secured Party or any other Person in connection with the enforcement
of, realization upon, or exercise of rights or remedies under or in connection with, or, any
other action or inaction by the Secured Party or any other Person in respect of, any direct
or indirect security for any of the Secured Obligations (including the Pledged Collateral).
As used in this Agreement, “direct or indirect security” for the Secured Obligations, and
similar phrases, includes any collateral security, guaranty, suretyship, letter of credit,
capital maintenance agreement, put option, subordination agreement, or other right or
arrangement of any nature providing direct or indirect assurance of payment or performance
of any of the Secured Obligations, made by or on behalf of any Person;

     (e) Any merger, consolidation, liquidation, dissolution, winding-up, charter
revocation, or forfeiture, or other change in, restructuring or termination of the
corporate, partnership or limited liability company structure or existence, as applicable,
of any Pledgor, or any other Person; any bankruptcy, insolvency, reorganization or similar
proceeding with respect to any Pledgor or any other Person; or any action taken or election
(including any election under Section 1111(b)(2) of the United States Bankruptcy Code or any
comparable law of any jurisdiction) made by the Secured Party, any Pledgor or any other
Person in connection with any such proceeding;

     (f) Any defense, setoff, or counterclaim which may at any time be available to or be
asserted by any Pledgor or any other Person with respect to any Financing Agreement or any
of the Secured Obligations; or any discharge by operation of law or release of any Pledgor
or any other Person from the performance or observance of any Financing Agreement or any of
the Secured Obligations; or

     (g) Any other event or circumstance, whether similar or dissimilar to the foregoing,
and whether known or unknown, which might otherwise constitute a defense available to, or
limit the liability of a guarantor or a surety, including the Pledgors, excepting only full,
strict, and indefeasible payment and performance of the Secured Obligations in full.

     12. [Intentionally Omitted.]

     13. Waivers. Each Pledgor hereby waives any and all defenses which such Pledgor may now or
hereinafter have based on principals of suretyship, impairment of collateral, or the like. Without
limiting the generality of the foregoing and to the fullest extent permitted by applicable
Governmental Rules, each Pledgor hereby further waives each of the following:

12

 

     (a) All notices, disclosures and demands of any nature which otherwise might be
required from time to time to preserve intact any rights against such Pledgor, including the
following: any notice of any event or circumstance described in the immediately preceding
section hereof; any notice required by any Governmental Rules, regulation, or order now or
hereafter in effect in any jurisdiction; any notice of nonpayment, nonperformance, dishonor,
or protest under any Financing Agreement or any of the Secured Obligations; any notice of
the incurrence of any Secured Obligations; any notice of any default or any failure on the
part of any Pledgor or any other Person to comply with any Financing Agreement or any of the
Secured Obligations or any requirement pertaining to any direct or indirect security for any
of the Secured Obligations; and any notice or other information pertaining to the business,
operations, condition (financial or otherwise), or prospects of any Pledgor to any other
Person;

     (b) Any right to any marshalling of assets, to the filing of any claim against any
Pledgor or any other Person in the event of any bankruptcy, insolvency, reorganization, or
similar proceeding, or to the exercise against any Pledgor or any other Person of any other
right or remedy under or in connection with any Financing Agreement or any of the Secured
Obligations or any direct or indirect security for any of the Secured Obligations; any
requirement of promptness or diligence on the part of the Secured Party or any other Person;
any requirement to exhaust any remedies under or in connection with, or to mitigate the
damages resulting from default under any Financing Agreement or any of the Secured
Obligations or any direct or indirect security for any of the Secured Obligations; any
benefit of any statute of limitations; and any requirement of acceptance of this Agreement
or any other Financing Agreement, and any requirement that the Pledgor receive notice of any
such acceptance; and

     (c) Any defense or other right arising by reason of any Governmental Rules now or
hereafter in effect in any jurisdiction pertaining to election of remedies (including
anti-deficiency laws, “one action” laws, or the like), or by reason of any election of
remedies or other action or inaction by the Secured Party (including commencement or
completion of any judicial proceeding or nonjudicial sale or other action in respect of
collateral security for any of the Secured Obligations), which results in denial or
impairment of the right of the Secured Party to seek a deficiency against any Pledgor or any
other Person or which otherwise discharges or impairs any of the Secured Obligations.

     14. Assignment. All rights of the Secured Party under this Agreement shall inure to the
benefit of its successors and assigns and to all other holders of the Notes from time to time. All
obligations of the Pledgors shall bind each Pledgor’s successors, assigns, heirs, executors and
personal representatives, as the case may be; provided, however, no Pledgor may assign or
transfer any of such Pledgor’s rights and obligations hereunder or any interest herein, and any
such purported assignment or transfer shall be null and void.

     15. Severability. Any provision of this Agreement (or portion hereof) which shall be held
invalid or unenforceable shall be ineffective without invalidating the remaining provisions hereof
(or portions thereof).

13

 

     16. Governing Law. This Agreement shall be construed in accordance with and governed by the
internal laws of the State of Ohio without regard to its conflicts of law principles, except to the
extent the validity or perfection of the security interests or the remedies hereunder in respect of
any Pledged Collateral are governed by the law of a jurisdiction other than the State of Ohio.

     17. Notices. All notices, requests, demands, directions and other communications
(collectively, “notices”) given to or made upon any party hereto under the provisions of this
Agreement shall be given or made as set forth in Section 18 [Notices] of the applicable Note
Purchase Agreement.

     18. Specific Performance. Each Pledgor acknowledges and agrees that, in addition to the other
rights of the Secured Party hereunder and under the other Financing Agreements, because the Secured
Party’s remedies at law for failure of the Pledgors to comply with the provisions hereof relating
to the Secured Party’s rights (i) to inspect the books and records related to the Pledged
Collateral, (ii) to receive the various notifications the Pledgors are required to deliver
hereunder, (iii) to obtain copies of agreements and documents as provided herein with respect to
the Pledged Collateral, (iv) to enforce the provisions hereof pursuant to which the Pledgors have
appointed the Secured Party each Pledgor’s attorney-in-fact, and (v) to enforce the Secured Party’s
remedies hereunder, would be inadequate and that any such failure would not be adequately
compensable in damages, each Pledgor agrees that each such provision hereof may be specifically
enforced.

     19. Voting Rights in Respect of the Pledged Collateral; Dividends and Distributions. So long
as no Event of Default shall occur and be continuing under either Note Purchase Agreement, each
Pledgor (i) shall have the right to receive revenue, distributions and dividends paid or payable on
the Pledged Collateral and (ii) may exercise any and all voting and other consensual rights
pertaining to the Pledged Collateral or any part thereof for any purpose not inconsistent with the
terms of this Agreement or the other Financing Agreements; provided, however, that no Pledgor will
enter into any agreement or undertaking restricting the right or ability of any Pledgor or the
Secured Party to sell, assign or transfer any of the Pledged Collateral. Upon the occurrence and
during the continuance of an Event of Default, all rights of the Pledgors to exercise the voting
and other consensual rights or receive and retain revenue, distributions and dividends that it
would otherwise be entitled to exercise or receive and retain, as applicable pursuant to this
Section 19, shall cease, and all such rights shall thereupon become vested in the Secured Party who
shall thereupon have the sole right to exercise such voting or other consensual rights and to
receive and retain such cash dividends and distributions in accordance with Sections 6 and 7
hereof, as applicable.

     20. Consent to Jurisdiction. Each Pledgor hereby irrevocably submits to the
nonexclusive jurisdiction of the Court of Common Pleas of Lake County, Ohio and of the District
Court of the United States for the Northern District of Ohio in any action or proceeding arising
out of or relating to this Agreement, and each Pledgor hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in the Court of Common Pleas of
Lake County, Ohio and in the District Court of the United States for the Northern District of Ohio.

14

 

Each Pledgor hereby waives to the fullest extent such Pledgor may effectively do so, the defense
of an inconvenient forum to the maintenance of any such action or proceeding. Each Pledgor agrees
that a final judgment in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions (or any political subdivision thereof) by suit on the judgment or in any other
manner provided by law.

     21. Waiver of Jury Trial. Except as prohibited by law, each Pledgor hereby waives any
right such Pledgor may have to a trial by a jury in respect of any litigation directly or
indirectly arising out of, under, or in connection with this Agreement or any other documents or
transactions relating thereto.

     22. Entire Agreement; Amendments. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior agreements relating to a
grant of a security interest in the Pledged Collateral by the Pledgors. This Agreement may not be
amended or supplemented, and no provision of this Agreement shall be waived, except, in each case,
by a writing signed by the Secured Party and the Pledgors.

     23. Counterparts; Electronic Signatures. This Agreement may be executed in any number of
counterparts, and by different parties hereto in separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall constitute one and the same
instrument. Delivery of an executed counterpart of this Agreement by facsimile or email shall be
as effective as delivery of a manually executed counterpart of this Agreement.

     24. Additional Pledgors. Additional Subsidiaries that are required by the terms of Section 9.8
of each of the Note Purchase Agreements, shall execute and deliver to the Secured Party an Addendum
in the form of Exhibit A attached hereto and shall, thereafter, become a Pledgor hereunder.

[Remainder of Page Intentionally Blank]

15

 

     In Witness Whereof, and intending to be legally bound, the parties hereto have caused
this Agreement to be duly executed as of the date first above written.

	 	 	 	 	 
	 	INITIAL PLEDGORS:

Northeast Ohio Natural Gas Corp.

 	 
	 	By:  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Orwell Natural Gas Company

 	 
	 	By:  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Brainard Gas Corp.

 	 
	 	By:  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Great Plains Natural Gas Company

 	 
	 	By:  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 

16

 

	 	 	 	 	 

	 	 	 	 	 
	 	Lightning Pipeline Company, Inc.

 	 
	 	By:  	
/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Kidron Pipeline, LLC

 	 
	 	By:  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Spelman Pipeline Holdings, LLC

 	 
	 	By:  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Gas Natural Service Company, LLC

 	 
	 	By:  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	Gas Natural Inc.

 	 
	 	By:  	/s/ Thomas J. Smith
 	 
	 	 	Name:  	Thomas J. Smith 	 
	 	 	Title:  	Chief Financial Officer 	 

17

 

	 	 	 	 	 

This Agreement is hereby accepted and agreed to as of the date thereof.

	 	 	 	 	 
	 	SECURED PARTY:

Sun Life Assurance Company of Canada

 	 
	 	By:  	/s/ John Chamberlain
 	 
	 	 	Name:  	John Chamberlain 	 
	 	 	Title:  	Senior Director, Private Fixed
Income 	 
	 	 	 
	 	By:  	                                                    /s/ Paul Sinclair
 	 
	 	 	Name:  	Paul Sinclair 	 
	 	 	Title:  	Managing Director, Head of Private
Debt, Private Fixed Income 	 
	 

18

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