Document:

exv10w3

Exhibit 10.3

Execution Copy

 

Northeast Ohio Natural Gas Corp.

Orwell Natural Gas Company

Brainard Gas Corp.

First Amendment and Joinder to Note Purchase Agreement

Dated as of May 3, 2011

Re:

Note Purchase Agreement dated as of November 1, 2010

and

Senior Secured Guaranteed Notes due June 1, 2017

 

 

 

Table of Contents

(Not a part of this First Amendment and Joinder to Note Purchase Agreement)

	 	 	 	 	 
	Section	 	Heading	 	Page
	 
	 	 	 	 
	Section 1.

	 	 Amendments To Current Note Purchase Agreement
	 	2
	 
	 	 	 	 
	Section 2.

	 	Joinder
	 	8
	 
	 	 	 	 
	Section 3.

	 	Conditions Precedent
	 	8
	 
	 	 	 	 
	Section 4.

	 	Representations and Warranties
	 	9
	 
	 	 	 	 
	Section 5.

	 	Miscellaneous
	 	10

Schedule 5.4 — Subsidiaries of the Company and Ownership of Subsidiary Stock

Schedule 5.14 — Use of Proceeds

Schedule 5.15 — Existing Indebtedness

Schedule 5.19 — Real Property

Exhibit 1 — Form of Senior Secured Guaranteed Note due June 1, 2017

- i -

 

Northeast Ohio Natural Gas Corp.

Orwell Natural Gas Company

Brainard Gas Corp.

8500 Station Street, Suite 100

Mentor, Ohio 44060

First Amendment and Joinder to Note Purchase Agreement

Dated as of May 3, 2011

Re: Note Purchase Agreement dated as of November 1, 2010

and

Senior Secured Guaranteed Notes due June 1, 2017

To Sun Life Assurance Company of Canada

Ladies and Gentlemen:

          This First Amendment and Joinder to Note Purchase Agreement (this “Amendment”) is made as of
May 3, 2011, by and among 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 “Issuers” and,
individually, as an “Issuer”), Great Plains Natural Gas Company, an Ohio corporation (“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, Great
Plains, Lightning, Spelman, Kidron and Service Company are referred to herein, collectively, as the
“Guarantors” and, individually, as a “Guarantor”), and Sun Life Assurance Company of Canada (the
“Purchaser”).

          Reference is made to the Note Purchase Agreement (the “Current Note Purchase Agreement”) dated
as of November 1, 2010, by and among the Issuers, Great Plains, Lightning, the Parent and the
Purchaser pursuant to which, among other things, (i) the Issuers agreed to authorize the issue and
sale of $17,700,000 aggregate principal amount of their Senior Secured Guaranteed Notes due June 1,
2017 (the “Notes”) at a closing on the fourth Business Day following receipt by the Issuers and the
Parent of all regulatory approvals necessary for the issuance of the Notes and the guaranty by the
Parent of such Notes (and which provides that the closing must occur on or prior to November
28, 2010) and (ii) Great Plains, Lightning and the Parent agreed to jointly and severally
guarantee the Guaranteed Obligations (as defined therein). Capitalized terms used in this
Amendment without definition shall have the meanings given such terms in the Current Note Purchase
Agreement, as hereby amended by this Amendment (as amended, the “Note Purchase Agreement”). In
addition, the Current Note Purchase Agreement

 

 

			
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contemplated that Richard M. Osborne, individually, and as Trustee of the Richard M. Osborne Trust
under Restated Trust Agreement dated January 13, 1995, would guaranty the Notes and the other
Obligations under the Note Purchase Agreement.

          For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Obligors request the amendment of certain provisions of the Current Note Purchase
Agreement as hereinafter provided.

          Upon your acceptance hereof in the manner hereinafter provided and upon satisfaction of all
conditions to the effectiveness hereof and receipt by the Obligors of similar acceptances from the
Purchaser, this Amendment shall be effective, but only in the respects hereinafter set forth:

Section 1. Amendments To Current Note Purchase Agreement.

     Section 1.1. Release of Individual Guarantor and Individual Guarantee Agreement. As of the
Effective Date (defined below), (a) the Purchaser agrees to release Richard M. Osborne,
individually, and as Trustee of the Richard M. Osborne Trust under Restated Trust Agreement dated
January 13, 1995, from his obligation to guaranty the Notes and the other Obligations under the
Note Purchase Agreement, and (b) the parties hereto agree that each reference in the Current Note
Purchase Agreement to the “Individual Guarantor” and to the “Individual Guarantee Agreement” shall
be deleted.

     Section 1.2. Decreased Purchase Price. As of the Effective Date, the parties hereto agree that
(a) the purchase price for the Notes shall be decreased from “$17,700,000” to “$15,334,000” and (b)
each reference to the phrase “$17,700,000” in the Current Note Purchase Agreement (including,
without limitation, on the cover page thereof and in the Schedules and Exhibits thereto) shall be
deemed to be a reference to the phrase “$15,334,000”.

     Section 1.3. Interest Rate. The first sentence of Section 1.2(b) of the Current Note Purchase
Agreement is hereby amended and restated in its entirety to read as follows:

The Applicable Rate for the Notes shall be determined by the
Purchaser, and notice thereof shall be given to the Issuers, on the
Business Day immediately preceding the date of Closing, together
with a copy of the relevant screen used for the determination of the
Applicable Rate and a calculation of the Applicable Rate, and any
such determination made in accordance with the provisions of this
Agreement, shall be presumptively correct absent manifest error.

     Section 1.4. Closing. The first sentence of Section 3 of the Current Note Purchase Agreement
is hereby amended and restated in its entirety to read as follows:

The sale and purchase of the Notes to be purchased by the Purchaser
shall occur at the offices of Chapman and Cutler LLP, 111 West
Monroe Street, Chicago, Illinois 60603 at 10:00 a.m. Chicago time,
at a closing (the “Closing”) on the second Business

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Day following (i) receipt by the Issuers and the Parent of all
regulatory approvals necessary for the issuance of the Notes and the
guaranty by the Parent of such Notes and (ii) expiration of all
applicable appeal periods with respect thereto, provided that the
date of Closing shall occur on or prior to July 31, 2011.

     Section 1.5. Opinions of Counsel. Section 4.4 of the Current Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

     Section 4.4. Opinions of Counsel. Such Purchaser shall
have received opinions in form and substance satisfactory to such
Purchaser, dated the date of the Closing (a) from Kegler Brown Hill
& Ritter LPA and Kohrman Jackson & Krantz P.L.L., respective counsel
for the Obligors, covering the matters set forth in Exhibit 4.4(a)
and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or its counsel may reasonably
request (and the Obligors hereby instruct their respective counsel
to deliver such opinions to the Purchaser) and (b) from Chapman and
Cutler LLP, the Purchaser’s special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b)
and covering such other matters incident to such transactions as
such Purchaser may reasonably request.

     Section 1.6. Evidence of Title. Section 4.16 of the Current Note Purchase Agreement is hereby
amended by (a) replacing the phrase “One Million Five Hundred Forty Thousand Dollars ($1,540,000)”
appearing therein with the phrase “One Million Seven Hundred Eighty One Thousand One Hundred Thirty
Dollars ($1,781,130)” and (b) replacing the phrase “NEO” appearing therein with the phrase “NEO and
Spelman, as applicable”.

     Section 1.7. Sale of Other Notes. Section 4.19 of the Current Note Purchase Agreement is
hereby amended by replacing the phrase “$2,300,000” appearing therein with the phrase “$3,000,000”.

     Section 1.8. Representations and Warranties. The introductory paragraph of Section 5 of the
Current Note Purchase Agreement is hereby amended by replacing the phrase “Financing Documents”
appearing therein with the phrase “Financing Agreements”.

     Section 1.9. Existing Indebtedness; Future Liens. Section 5.15(a) of the Current Note Purchase
Agreement is hereby amended by replacing the phrase “September 30, 2010” appearing therein with the
phrase “March 31, 2011”.

     Section 1.10. Debt Service Reserve. Section 9 of the Current Note Purchase Agreement is hereby
amended by adding a new Section 9.10 at the end thereof as follows:

     Section 9.10. Debt Service Reserve. (a) The Obligors
will at all times maintain a debt service reserve fund

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available consisting of cash and money markets investments, if
available, in an amount equal to the interest payable on the Notes
for a 12-month period, such amount to be determined by the Purchaser
on the Business Day immediately preceding the date of Closing (the
“Debt Service Amount”). Such Debt Service Amount shall on the date
of Closing be deposited, and thereafter maintained, in an interest
bearing blocked account (the “Debt Service Reserve Account”) at Bank
of America, N.A., PNC Bank, National Association, or another banking
institution satisfactory to the Purchaser (the “Depository Bank”),
and such Debt Service Reserve Account shall at all times be subject
to a blocked account agreement among the Depository Bank, the
Obligors and the Purchaser, the form and substance of which shall be
acceptable to the Purchaser (the “Debt Service Control Agreement”).
The Debt Service Reserve Account and the Debt Service Amount on
deposit therein shall constitute part of the Collateral and be
subject to the Financing Agreements.

     (b) Following the occurrence and during the continuance of
an Event of Default, the Purchaser shall have all rights and
remedies with respect to the Debt Service Reserve Account and the
Debt Service Amount on deposit therein as provided in the Financings
Agreements.

     (c) The Obligors, jointly and severally, agree to maintain
the Debt Service Amount on deposit in the Debt Service Reserve
Account at the minimum amount required by paragraph (a) above. So
long as no Default or Event of Default shall have occurred and be
continuing, the Obligors shall be entitled to receive any accrued
earnings on the Debt Service Amount, subject to withdrawal pursuant
to the terms of the Debt Service Control Agreement, provided that at
no time shall the Debt Service Amount on deposit in the Debt Service
Reserve Account fall below the minimum amount required by paragraph
(a) above.

     (d) Upon the indefeasible payment in full of the Notes and
all other Obligations under the Financing Agreements, the Obligors
shall be entitled to withdrawal the Debt Service Amount on deposit
in the Debt Service Reserve Account and the Purchaser agrees to
release the same.

     Section 1.11. Indebtedness. Section 10.1 of the Current Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

     Section 10.1. Indebtedness. The Obligors shall not, and
shall not permit any Restricted Subsidiary to, create, assume, incur

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or in any manner become or remain liable in respect to, any
Indebtedness, except for:

     (i) the Obligations of the Obligors under the Financing
Agreements;

     (ii) Indebtedness of Great Plains, Lightning and the Parent
issued pursuant to the Floating Rate Note Purchase Agreement;

     (iii) Indebtedness incurred under Capitalized Leases and
purchase money obligations in an aggregate amount not to exceed
$500,000 at any one time outstanding;

     (iv) Indebtedness of the Obligors outstanding as of March
31, 2011 and set forth in Schedule 5.15 to the First Amendment
(excluding any such Indebtedness which is paid in full with the
proceeds of the Notes);

     (v) unsecured intercompany Indebtedness permitted pursuant
to Section 10.10(ii); and

     (vi) additional Indebtedness of the Obligors, provided that
such Indebtedness is otherwise permitted hereunder including,
without limitation, under Sections 10.2, 10.3 and 10.4 hereof.

     Section 1.12. Guaranties. Section 10.2 of the Current Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

     Section 10.2. Guaranties. The Obligors shall not, and
shall not permit any Restricted Subsidiary to, directly or
indirectly Guaranty the Indebtedness or obligation of any other
Person, except for (i) guarantees of Indebtedness for Capitalized
Leases and purchase money obligations to the extent permitted under
Section 10.1(iii), (ii) guarantees of the Obligations under the
Financing Agreements, (iii) guarantees of the Indebtedness issued
pursuant to the Floating Rate Note Purchase Agreement, (iv)
guarantees of Indebtedness outstanding as of March 31, 2011 and set
forth on Schedule 5.15 to the First Amendment (excluding any such
Indebtedness which is paid in full with the proceeds of the Notes),
(v) guarantees resulting from endorsement of negotiable instruments
for collection in the ordinary course of business, (vi) guarantees
by an Issuer of Indebtedness of another Issuer (provided that such
Indebtedness is permitted pursuant to Section 10.1(vi)), and (vii)
guarantees by the Parent of Indebtedness or obligations of its
Subsidiaries (provided that (A)

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with respect to such Indebtedness of a Restricted Subsidiary, such
Indebtedness is permitted pursuant to Section 10.1(vi) and (B) with
respect to such Indebtedness of an Unrestricted Subsidiary, the
guarantee thereof by the Parent shall constitute Indebtedness in the
principal amount thereof and otherwise be permitted pursuant to
Section 10.1(vi)). The Parent shall not permit Energy West or any
of Energy West’s Subsidiaries to, directly or indirectly Guaranty
the Indebtedness or other obligation of any other Person (other than
of Energy West or its Subsidiaries), unless Energy West or such
Subsidiary, as applicable, concurrently becomes a Guarantor pursuant
to Section 9.8.

     Section 1.13. Creation of Liens; Contractual Restrictions. Section 10.3(a) of the Current Note
Purchase Agreement is hereby amended by (a) replacing the reference to the phrase “Section
10.1(ii)” appearing in clause (ii) thereof with the phrase “Section 10.1(iii)”, (b) deleting the
reference to “and” at the end of clause (ix) thereof, (c) renumbering clause “(x)” thereof as
clause “(xi)” and replacing the phrase “items (i) through (x)” appearing in the last sentence
thereof with the phrase “items (i) through (xi)”, and (d) inserting the following new clause (x)
immediately after clause (ix) thereof:

     (x) Liens to secure the Indebtedness issued under the
Floating Rate Note Purchase Agreement; and

     Section 1.14. Events of Default. Section 11 of the Current Note Purchase Agreement is hereby
amended by adding a new clause (n) at the end thereof as follows:

     (n) any “Event of Default” (as defined in the Floating Rate
Note Purchase Agreement) occurs and is continuing under the Floating
Rate Note Purchase Agreement.

     Section 1.15. Amendment to Defined Terms. The definition of “Change of Control” set forth in
Schedule B of the Current Note Purchase Agreement is hereby amended by amending and restating the
first parenthetical appearing in clause (a) thereof in its entirety to read as follows:

(other than, with the Purchaser’s prior written consent which
consent shall not be unreasonably withheld, Richard M. Osborne,
individually, and as Trustee of the Richard M. Osborne Trust under
Restated Trust Agreement dated January 13, 1995)

     Section 1.16. Amendment to Defined Terms. The definitions of “Control Agreement” and
“Guarantors” set forth in Schedule B of the Current Note Purchase Agreement are hereby amended and
restated in their entirety to read as follows:

“Control Agreement” means (i) the Debt Service Control Agreement and
(ii) each other tri-party deposit account, securities

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account or commodities account control agreement by and among the
Obligors, as applicable, the Purchaser and the depository,
securities intermediary or commodities intermediary, each in form
and substance reasonably satisfactory in all respects to the
Purchaser and in any event providing to the Purchaser “control” of
such deposit account, securities or commodities account within the
meaning of Articles 8 and 9 of the UCC, and each as may be amended,
restated, joined, supplemented or otherwise modified from time to
time in accordance with the terms thereof.

“Guarantors” means, collectively, the Parent, Great Plains,
Lightning, Kidron, Spelman, Service Company and any other Person
becoming a Guarantor pursuant to Section 9.8 and “Guarantor” means,
individually, any one of them.

     Section 1.17. Amendment to Defined Terms. Schedule B to the Current Note Purchase Agreement is
hereby amended by adding the following new definitions thereto in proper alphabetical order:

“Brainard” means Brainard Gas Corp., an Ohio corporation.

“Debt Service Amount” is defined in Section 9.10(a).

“Debt Service Control Agreement” is defined in Section 9.10(a).

“Debt Service Reserve Account” is defined in Section 9.10(a).

“Depository Bank” is defined in Section 9.10(a).

“First Amendment” means the First Amendment and Joinder to Note
Purchase Agreement dated as of May 3, 2011 by and among the Issuers
and the Guarantors.

“Floating Rate Note Purchase Agreement” means the Note Purchase
Agreement dated as of November 1, 2010, as amended by the First
Amendment and Joinder to Note Purchase Agreement dated as of May 3,
2011, by and among Great Plains, Lightning, the Parent and the
Purchaser, pursuant to which Great Plains will issue and sell
$3,000,000 aggregate principal amount of its Senior Secured
Guaranteed Notes due 2013 to the Purchaser, as such agreement may be
further amended, restated, supplemented or otherwise modified from
time to time.

“Kidron” means Kidron Pipeline, LLC, an Ohio limited liability
company.

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“Service Company” means Gas Natural Service Company, LLC, an Ohio
limited liability company.

“Spelman” means Spelman Pipeline Holdings, LLC, an Ohio limited
liability company.

     Section 1.18. Amendment to Schedule 5.4. Schedule 5.4 (Subsidiaries of the Company and
Ownership of Subsidiary Stock) to the Current Note Purchase Agreement is hereby amended and
restated in its entirety to read as set forth in Schedule 5.4 to this Amendment.

     Section 1.19. Amendment to Schedule 5.14. Schedule 5.14 (Use of Proceeds) to the Current Note
Purchase Agreement is hereby amended and restated in its entirety to read as set forth in Schedule
5.14 to this Amendment.

     Section 1.20. Amendment to Schedule 5.15. Schedule 5.15 (Existing Indebtedness) to the Current
Note Purchase Agreement is hereby amended and restated in its entirety to read as set forth in
Schedule 5.15 to this Amendment.

     Section 1.21. Amendment to Schedule 5.19. Schedule 5.19 (Real Property) to the Current Note
Purchase Agreement is hereby amended and restated in its entirety to read as set forth in Schedule
5.19 to this Amendment.

     Section 1.22. Amendment to Form of Note. The Form of Note attached as Exhibit 1 to the Current
Note Purchase Agreement is hereby amended and restated in its entirety to read as set forth in
Exhibit 1 to this Amendment.

Section 2. Joinder.

          Spelman, Kidron and Service Company each hereby agree to become a “Guarantor” and an “Obligor”
and to be bound by all of the terms, covenants and conditions set forth in the Note Purchase
Agreement and each other Financing Agreement, as applicable, to the same extent that such Persons
would have been bound if such Persons had been a signatory to the Current Note Purchase Agreement
on the execution date of the Current Note Purchase Agreement. Spelman, Kidron and Service Company
each hereby (a) make each of the representations and warranties and agree to each of the covenants
applicable to it contained in the Current Note Purchase Agreement, this Amendment and each other
Financing Agreement, as applicable, (ii) agree to execute this Amendment and each Financing
Agreement, as applicable, and (iii) agree that each reference to a “Guarantor” or an “Obligor” set
forth in the Current Note Purchase Agreement, this Amendment and each other Financing Agreement, as
applicable, shall include Spelman, Kidron and Service Company.

Section 3. Conditions Precedent.

          This Amendment shall not become effective until, and shall become effective on, the Business
Day when each of the following conditions shall have been satisfied (the “Effective Date”):

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     (a) The Purchaser shall have received this Amendment, duly executed by each Obligor.

     (b) The Purchaser shall have consented to this Amendment as evidenced by its execution
hereof.

     (c) The representations and warranties of the Obligors set forth in Section 4 hereof
shall be true and correct as of the date of the execution and delivery of this Amendment and
as of the Effective Date.

     (d) Any consents from any holder or holders of any outstanding security or indebtedness
of the Obligors and any amendments of agreements pursuant to which any securities or
indebtedness may have been issued which shall be necessary to permit the consummation of the
transactions contemplated hereby shall have been obtained and all such consents or
amendments shall be reasonably satisfactory in form and substance to the Purchaser and its
special counsel.

     (e) The Purchaser shall have received all reasonable and necessary final,
non-appealable regulatory and other approvals in respect of the transactions contemplated by
this Amendment and the other Financing Agreements and evidence that in respect of the
transactions contemplated by this Amendment, the Obligors are in compliance with all
applicable regulatory and statutory requirements.

     (f) All corporate and other proceedings in connection with the transactions contemplated
by this Amendment and all documents and instruments incident to such transactions shall be
satisfactory to the Purchaser and its special counsel, and the Purchaser and its special
counsel shall have received all such counterpart originals or certified or other copies of
such documents as the Purchaser or its special counsel may reasonably request.

     (g) The Purchaser shall have received such certificates of officers of the Obligors as
it may reasonably request with respect to this Amendment and the transactions contemplated
hereby.

     (h) The Purchaser shall have received by wire transfer to its account specified in
Schedule A to the Note Purchase Agreement (or otherwise specified to the Obligors in a
separate writing) a non-refundable amendment fee equal to $25,000.

Section 4. Representations and Warranties.

          The Obligors hereby, jointly and severally, represent and warrant to the Purchaser that as of
the date of execution and delivery of this Amendment and as of the Effective Date:

     (a) Each Obligor is duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization.

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     (b) Each Obligor has the requisite power to own its property and to carry on its
business as now being conducted.

     (c) Each Obligor is duly qualified and in good standing as a foreign corporation or
limited liability company, as applicable, authorized to do business in each jurisdiction in
which the failure to do so would, individually or in the aggregate, have a Material Adverse
Effect.

     (d) This Amendment, the Note Purchase Agreement and the transactions contemplated hereby
are within the requisite powers of each Obligor, have been duly authorized by all necessary
corporate or limited liability company action, as applicable, on the part of each Obligor,
and this Amendment and the Note Purchase Agreement have been duly executed and delivered by
each Obligor and constitute legal, valid and binding obligations of each Obligor enforceable
in accordance with their respective terms.

     (e) After giving effect to this Amendment, there are no Defaults or Events of Default
under the Note Purchase Agreement.

     (f) The execution, delivery and performance of this Amendment and the Note Purchase
Agreement does not and will not result in a violation of or default under (i) the
organizational documents of any Obligor, (ii) any agreement to which any Obligor is a party
or by which any Obligor is bound or to which any Obligor or any of its properties is
subject, (iii) any order, writ, injunction or decree binding on any Obligor, or (iv) any
statute, regulation, rule or other law applicable to any Obligor.

     (g) Except for (i) the items described in Schedule 5.7 to the Note Purchase Agreement
(each of which will be satisfied prior to Closing, with no appeals having been filed and all
related appeal periods with respect thereto having passed) and (ii) the filing of the
Collateral Documents with the appropriate Governmental Authority (each of which will be
filed contemporaneously with the Closing), no consent, approval or authorization of, or
registration, filing or declaration with, any Governmental Authority is required in
connection with the execution, delivery or performance by the Obligors of this Amendment and
the Note Purchase Agreement.

     (h) All of the representations and warranties of the Obligors set forth in Section 5 of
the Current Note Purchase Agreement, as amended by this Amendment, are true and correct in
all respects.

Section 5. Miscellaneous.

     Section 5.1. Ratification of the Current Note Purchase Agreement. Except as amended herein,
all terms and provisions of the Current Note Purchase Agreement and related agreements and
instruments are hereby ratified, confirmed and approved in all respects. If and to the extent that
any of the terms or provisions of the Current Note Purchase Agreement are in conflict or
inconsistent with any of the terms or provisions of this Amendment, this Amendment shall govern.

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     Section 5.2. References to the Note Purchase Agreement. Each reference in the Current Note
Purchase Agreement to “this Agreement,” “hereunder,” “hereof,” or words of similar import in
instruments or documents provided for in the Current Note Purchase Agreement or delivered or to be
delivered thereunder or in connection therewith, shall, except where the context otherwise
requires, be deemed a reference to the Note Purchase Agreement.

     Section 5.3. Fees and Expenses of Counsel. Without limiting Section 15 of the Current Note
Purchase Agreement, the Obligors jointly and severally agree to pay the additional fees and
disbursements of the Purchaser’s special counsel, Chapman and Cutler LLP, incurred in connection
with the negotiation, preparation, execution and delivery of this Amendment, the Debt Service
Control Agreement, the Collateral Documents and the transactions contemplated hereby and thereby
which fees and disbursements shall be reflected in the statement of such special counsel delivered
to the Obligors in accordance with Section 4.6 of the Current Note Purchase Agreement.

     Section 5.4. Governing Law. This Amendment shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of Ohio excluding
choice-of-law principles of the law of such State that would permit the application of the laws of
a jurisdiction other than such State.

     Section 5.5. Survival. All warranties, representations, and covenants made by the Obligors
herein will be considered to have been relied upon by the Purchaser and will survive the execution
and delivery of this Amendment.

     Section 5.6. Successors and Assigns. This Amendment will inure to the benefit of and be
binding upon the successors and assigns of each of the parties. The provisions of this Amendment
for the benefit of the Purchaser are intended in all cases, whether explicitly so stated or not, to
be for the benefit of all holders, from time to time, of the Notes, and will be enforceable by any
such holder, whether or not an express assignment to such holder of rights under this Amendment has
been made by the Purchaser or its successors or assigns.

     Section 5.7. Counterparts. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which, taken together, shall constitute but
one and the same Amendment. Delivery of an executed counterpart of this Amendment by facsimile or
email shall be as effective as delivery of a manually executed counterpart of this Amendment.

     Section 5.8. Severability. Whenever possible, each provision of this Amendment will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Amendment is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without invalidating the
remainder of this Amendment unless the consummation of the transactions contemplated hereby is
materially adversely affected thereby.

     Section 5.9. No Novation. This Amendment shall, in no way, be deemed as a novation of the
terms of the Current Note Purchase Agreement.

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     Section 5.10. Further Assurances. At Obligors’ expense, the parties hereto shall execute and
deliver such additional documents and take such further action as may be necessary or desirable to
effectuate the provisions and purposes of this Amendment.

[Remainder of Page Intentionally Blank]

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The execution hereof by the Purchaser shall constitute a contract among the Obligors and the
Purchaser for the uses and purposes hereinabove set forth. This Amendment may be executed in any
number of counterparts, each executed counterpart constituting an original but all together only
one agreement.

	 	 	 	 	 
	 	Northeast Ohio Natural Gas Corp., as an

Issuer

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

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

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

Guarantor

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

13

 

	 	 	 	 	 

			
	Northeast Ohio Natural Gas Corp., et. al.
	 	First Amendment and Joinder

to Note Purchase Agreement

	 	 	 	 	 
	 	Lightning Pipeline Company, Inc., as a
Guarantor

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

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

Guarantor

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

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

14

 

	 	 	 	 	 

			
	Northeast Ohio Natural Gas Corp., et. al.
	 	First Amendment and Joinder

to Note Purchase Agreement

This Amendment is hereby accepted and agreed to as of the date aforesaid.

	 	 	 	 	 
	 	Sun Life Assurance Company of Canada

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

15exv10w4

Exhibit 10.4

Execution Copy
 

Great Plains Natural Gas Company

First Amendment and Joinder to Note Purchase Agreement

Dated as of May 3, 2011

Re:

Note Purchase Agreement dated as of November 1, 2010

and

Floating Rate Senior Secured Guaranteed Notes due 2013

 

 

 

Table of Contents

(Not a part of this First Amendment and Joinder to Note Purchase Agreement)

	 	 	 	 	 
	Section	 	Heading	 	Page
	Section 1.

	 	 Amendments To Current Note Purchase Agreement
	 	2
	 
	 	 	 	 
	Section 2.

	 	Joinder
	 	9
	 
	 	 	 	 
	Section 3.

	 	Conditions Precedent
	 	9
	 
	 	 	 	 
	Section 4.

	 	Representations and Warranties
	 	10
	 
	 	 	 	 
	Section 5.

	 	Miscellaneous
	 	11
	 
	 	 	 	 
	Schedule 5.4   —

	 	Subsidiaries of the Company and Ownership of Subsidiary Stock	 	 
	 
	 	 	 	 
	Schedule 5.15 —

	 	Existing Indebtedness	 	 
	 
	 	 	 	 
	Schedule 5.19 —

	 	Real Property	 	 
	 
	 	 	 	 
	Exhibit 1          —

	 	Form of Senior Secured Guaranteed Note due 2013	 	 

 i

 

Great Plains Natural Gas Company

8500 Station Street, Suite 100

Mentor, Ohio 44060

First Amendment and Joinder to Note Purchase Agreement

Dated as of May 3, 2011

Re: Note Purchase Agreement dated as of November 1, 2010

and

Floating Rate Senior Secured Guaranteed Notes due 2013

To Sun Life Assurance Company of Canada

Ladies and Gentlemen:

          This First Amendment and Joinder to Note Purchase Agreement (this “Amendment”) is made as of
May 3, 2011, by and among Great Plains Natural Gas Company, an
Ohio corporation (the “Issuer”),
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, Lightning, Spelman,
Kidron and Service Company are referred to herein, collectively, as the “Guarantors” and,
individually, as a “Guarantor”), and Sun Life Assurance Company of Canada (the “Purchaser”).

          Reference is made to the Note Purchase Agreement (the “Current Note Purchase Agreement”) dated
as of November 1, 2010, by and among the Issuer, Lightning, the Parent and the Purchaser pursuant
to which, among other things, (i) the Issuer agreed to authorize the issue and sale of $2,300,000
aggregate principal amount of its Floating Rate Senior Secured Guaranteed Notes due 2013 (the
“Notes”) at a closing on the fourth Business Day following receipt by the Issuer and the Parent of
all regulatory approvals necessary for the issuance of the Notes and the guaranty by Parent of such
Notes (and which provides that the closing must occur on or prior to November 28, 2010)
and (ii) Lightning and the Parent agreed to jointly and severally guarantee the Guaranteed
Obligations (as defined therein). Capitalized terms used in this Amendment without definition
shall have the meanings given such terms in the Current Note Purchase Agreement, as hereby amended
by this Amendment (as amended, the “Note Purchase Agreement”). In addition, the Current Note
Purchase Agreement contemplated that Richard M. Osborne, individually, and as Trustee of the
Richard M. Osborne Trust under Restated Trust Agreement dated January 13, 1995, would guaranty the
Notes and the other Obligations under the Note Purchase Agreement.

1

 

          For good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Obligors request the amendment of certain provisions of the Current Note Purchase
Agreement as hereinafter provided.

          Upon your acceptance hereof in the manner hereinafter provided and upon satisfaction of all
conditions to the effectiveness hereof and receipt by the Obligors of similar acceptances from the
Purchaser, this Amendment shall be effective, but only in the respects hereinafter set forth:

Section 1. Amendments To Current Note Purchase Agreement.

     Section 1.1. Release of Individual Guarantor and Individual Guarantee Agreement. As of the
Effective Date (defined below), (a) the Purchaser agrees to release Richard M. Osborne,
individually, and as Trustee of the Richard M. Osborne Trust under Restated Trust Agreement dated
January 13, 1995, from his obligation to guaranty the Notes and the other Obligations under the
Note Purchase Agreement, and (b) the parties hereto agree that each reference in the Current Note
Purchase Agreement to the “Individual Guarantor” and to the “Individual Guarantee Agreement” shall
be deleted.

     Section 1.2. Increased Purchase Price; Maturity Date. As of the Effective Date, the parties
hereto agree that (a) the purchase price for the Notes shall be increased from “$2,300,000” to
“$3,000,000” and (b) each reference to the phrase “$2,300,000” in the Current Note Purchase
Agreement (including, without limitation, on the cover page thereof and in the Schedules and
Exhibits thereto) shall be deemed to be a reference to the phrase “$3,000,000”.

     Section 1.3. Interest Rate. (a) Section 1.2(a) of the Current Note Purchase Agreement is
hereby amended and restated in its entirety to read as follows:

     (a) The Notes shall bear interest (computed on the basis of a
360-day year and actual days elapsed) on the unpaid principal
thereof from the date of issuance at a floating rate equal to the
Adjusted LIBOR Rate from time to time, payable quarterly on the
interest payment dates set forth in the first paragraph of the
Notes, until such principal sum shall have become due and payable,
whether at maturity, upon acceleration or otherwise (each such date
being referred to herein as an “Interest Payment Date”) and interest
(so computed) on any overdue principal and LIBOR Breakage Amount, if
any, and to the extent permitted by applicable law, on any overdue
interest, from the due date thereof (whether at maturity, upon
acceleration or otherwise) and, during the continuance of an Event
of Default, on the unpaid balance hereof, at the Default Rate until
paid.

     (b) The first sentence of Section 1.2(b) of the Current Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

2

 

The Adjusted LIBOR Rate for the Notes shall be determined by the
Issuer, and notice thereof shall be given to the holders of the
Notes, (i) with respect to the first Interest Period, on the
Business Day immediately preceding the date of Closing and (ii) with
respect to each other Interest Period, on the second Business Day
preceding the beginning of each such Interest Period, in each case,
together with a copy of the relevant screen used for the
determination of LIBOR, a calculation of the Adjusted LIBOR Rate for
such Interest Period, the number of days in such Interest Period,
the date on which interest for such Interest Period will be paid and
the amount of interest to be paid to each holder of Notes on such
date.

     Section 1.4. Closing. The first sentence of Section 3 of the Current Note Purchase Agreement
is hereby amended and restated in its entirety to read as follows:

The sale and purchase of the Notes to be purchased by the Purchaser
shall occur at the offices of Chapman and Cutler LLP, 111 West
Monroe Street, Chicago, Illinois 60603 at 10:00 a.m. Chicago time,
at a closing (the “Closing”) on the second Business Day following
(i) receipt by the Issuer and the Parent of all regulatory approvals
necessary for the issuance of the Notes and the guaranty by the
Parent of such Notes and (ii) expiration of all applicable appeal
periods with respect thereto, provided that the date of Closing
shall occur on or prior to July 31, 2011.

     Section 1.5. Opinions of Counsel. Section 4.4 of the Current Note Purchase Agreement is
hereby amended and restated in its entirety to read as follows:

     Section 4.4. Opinions of Counsel. Such Purchaser shall have
received opinions in form and substance satisfactory to such
Purchaser, dated the date of the Closing (a) from Kegler Brown Hill
& Ritter LPA and Kohrman Jackson & Krantz P.L.L., respective counsel
for the Obligors, covering the matters set forth in Exhibit 4.4(a)
and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or its counsel may reasonably
request (and the Obligors hereby instruct their respective counsel
to deliver such opinions to the Purchaser) and (b) from Chapman and
Cutler LLP, the Purchaser’s special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b)
and covering such other matters incident to such transactions as
such Purchaser may reasonably request.

     Section 1.6. Evidence of Title. Section 4.14 of the Current Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

3

 

     Section 4.14. Evidence of Title. With respect to each parcel
of Real Property, the Obligors shall have obtained the commitment of
Lake Title Company or another title insurance company of good
standing selected by the Obligors and satisfactory to the Purchaser
and its special counsel (the “Title Company”), to issue a policy of
mortgage title insurance on a standard ALTA Form Mortgage Title
Insurance Policy Loan Policy-2006 Form with certain endorsements
required by the Purchaser and its special counsel including, without
limitation, an ALTA 9 Comprehensive Endorsement, an access
endorsement and a surface disturbance endorsement (the “ALTA
Policy”) in the aggregate amount which will provide for mortgage
title insurance in an amount not less than Two Hundred Forty One
Thousand One Hundred Thirty Dollars ($241,130), covering such Real
Property, and showing fee simple title to such Real Property to be
vested in Spelman, subject only to:

     (a) the liens, charges and encumbrances, if any, permitted by
the applicable Mortgage;

     (b) such exceptions as are standard under an ALTA Policy (but
such policy shall not be subject to a survey or mechanic’s lien
exception); and

     (c) such other exceptions as shall be reasonably satisfactory
to the Purchaser and its special counsel; and

agreeing to insure the beneficiaries under such Mortgage, upon the
proper execution and recording of such Mortgage, against loss or
damage sustained by reason of such Mortgage not being a first and
paramount lien upon the title to the Real Property, subject only to
the exceptions referred to in the foregoing clauses (a) through (c).
All premiums in respect of the ALTA Policy shall have been paid in
full by the Obligors.

     Section 1.7. Environmental Assessment. Section 4.15 of the Current Note Purchase Agreement is
hereby amended and restated in its entirety to read as follows:

     Section 4.15. Environmental Assessment. The Purchaser and its
special counsel shall have received a Phase I environmental site
assessment prepared by an environmental engineering firm
satisfactory to the Purchaser for each parcel of Real Property, in
scope, form and substance satisfactory to the Purchaser and its
special counsel.

4

 

     Section 1.8. Sale of Other Notes. Section 4.19 of the Current Note Purchase Agreement is
hereby amended by replacing the phrase “$17,700,000” appearing therein with the phrase
“$15,334,000”.

     Section 1.9. Representations and Warranties. The introductory paragraph of Section 5 of the
Current Note Purchase Agreement is hereby amended by replacing the phrase “Financing Documents”
appearing therein with the phrase “Financing Agreements”.

     Section 1.10. Use of Proceeds. The first sentence of Section 5.14 of the Current Note
Purchase Agreement is hereby amended and restated in its entirety to read as follows:

The Issuer will apply the proceeds of the sale of the Notes to (i)
pay out and discharge all outstanding Indebtedness of the Issuer at
Citizens Bank and (ii) fund its Debt Service Reserve Account in the
amount of approximately $123,000 in accordance with that certain
Deposit Account Control Agreement (Hard Account Agreement) of even
date herewith, by and between Issuer and PNC Bank, National
Association. The amount remaining after applying the proceeds as
described in (i) and (ii) above will be applied towards outstanding
balances on intercompany receivables owed by the Issuer and/or its
wholly owned subsidiary, Northeast Ohio Natural Gas Corp., to
Parent.

     Section 1.11. Existing Indebtedness; Future Liens. Section 5.15(a) of the Current Note
Purchase Agreement is hereby amended by replacing the phrase “September 30, 2010” appearing therein
with the phrase “March 31, 2011”.

     Section 1.12. Collateral Documents. Section 5.19 of the Current Note Purchase Agreement is
hereby amended by adding the following language immediately at the end of such Section:

In the case of all Collateral consisting of the Real Property, the
security interests and mortgage Liens granted pursuant to the
Mortgages constitute valid and continuing perfected first priority
security interests (subject to Permitted Encumbrances) in favor of
the Purchaser subject only to the completion of the recordings and
other actions specified on Schedule 5.19 (which, in the case of all
recordings and other documents referred to on such Schedule, have
been recorded or delivered to the Title Company on or before the
date of Closing in completed and duly authorized form, as
applicable). All filing and recording fees and other, expenses in
connection with each such action shall be paid by the Obligors, and
the Purchaser shall be reimbursed by the Obligors, for any such
reasonable fees and expenses incurred by the Purchaser.

5

 

     Section 1.13 Debt Service Reserve. Section 9 of the Current Note Purchase Agreement is hereby
amended by adding a new Section 9.10 at the end thereof as follows:

     Section 9.10. Debt Service Reserve. (a) The Obligors will at
all times maintain a debt service reserve fund available consisting
of cash and money markets investments, if available, in an amount
equal to the interest payable on the Notes for a 12-month period,
such amount to be determined by the Purchaser on the Business Day
immediately preceding the date of Closing (the “Debt Service
Amount”). Such Debt Service Amount shall on the date of Closing be
deposited, and thereafter maintained, in an interest bearing blocked
account (the “Debt Service Reserve Account”) at Bank of America,
N.A., PNC Bank, National Association, or another banking institution
satisfactory to the Purchaser (the “Depository Bank”), and such Debt
Service Reserve Account shall at all times be subject to a blocked
account agreement among the Depository Bank, the Obligors and the
Purchaser, the form and substance of which shall be acceptable to
the Purchaser (the “Debt Service Control Agreement”). The Debt
Service Reserve Account and the Debt Service Amount on deposit
therein shall constitute part of the Collateral and be subject to
the Financing Agreements.

     (b) Following the occurrence and during the continuance of an
Event of Default, the Purchaser shall have all rights and remedies
with respect to the Debt Service Reserve Account and the Debt
Service Amount on deposit therein as provided in the Financings
Agreements.

     (c) The Obligors, jointly and severally, agree to maintain the
Debt Service Amount on deposit in the Debt Service Reserve Account
at the minimum amount required by paragraph (a) above. So long as
no Default or Event of Default shall have occurred and be
continuing, the Obligors shall be entitled to receive any accrued
earnings on the Debt Service Amount, subject to withdrawal pursuant
to the terms of the Debt Service Control Agreement, provided that at
no time shall the Debt Service Amount on deposit in the Debt Service
Reserve Account fall below the minimum amount required by paragraph
(a) above.

     (d) Upon the indefeasible payment in full of the Notes and all
other Obligations under the Financing Agreements, the Obligors shall
be entitled to withdrawal the Debt Service Amount on deposit in the
Debt Service Reserve Account and the Purchaser agrees to release the
same.

6

 

     Section 1.14. Indebtedness. Section 10.1(iv) of the Current Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

     (iv) Indebtedness of the Obligors and each other member of the
Ohio Group outstanding as of March 31, 2011 and set forth in
Schedule 5.15 to the First Amendment (excluding any such
Indebtedness which is paid in full with the proceeds of the Notes);

     Section 1.15. Guaranties. Section 10.2 of the Current Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

(iv) guarantees of Indebtedness outstanding as of March 31, 2011 and
set forth on Schedule 5.15 to the First Amendment (excluding any
such Indebtedness which is paid in full with the proceeds of the
Notes),

     Section 1.16. Amendment to Defined Terms. The definition of “Change of Control” set forth in
Schedule B of the Current Note Purchase Agreement is hereby amended by amending and restating the
first parenthetical appearing in clause (a) thereof in its entirety to read as follows:

(other than, with the Purchaser’s prior written consent which
consent shall not be unreasonably withheld, Richard M. Osborne,
individually, and as Trustee of the Richard M. Osborne Trust under
Restated Trust Agreement dated January 13, 1995)

     Section 1.17. Amendment to Defined Terms. The definitions of “Brainard”, “Control Agreement”,
“Fixed Rate Note Purchase Agreement” and “Guarantors” set forth in Schedule B of the Current Note
Purchase Agreement are hereby amended and restated in their entirety to read as follows:

“Brainard” means Brainard Gas Corp., an Ohio corporation and direct
subsidiary of Parent.

“Control Agreement” means (i) the Debt Service Control Agreement and
(ii) each other tri-party deposit account, securities account or
commodities account control agreement by and among the Obligors, as
applicable, the Purchaser and the depository, securities
intermediary or commodities intermediary, each in form and substance
reasonably satisfactory in all respects to the Purchaser and in any
event providing to the Purchaser “control” of such deposit account,
securities or commodities account within the meaning of Articles 8
and 9 of the UCC, and each as may be amended, restated, joined,
supplemented or otherwise modified from time to time in accordance
with the terms thereof.

7

 

“Fixed Rate Note Purchase Agreement” means the Note Purchase
Agreement dated as of November 1, 2010, as amended by the First
Amendment and Joinder to Note Purchase Agreement dated as of May 3,
2011 by and among the Obligors, Brainard, NEO, Orwell and the
Purchaser, pursuant to which NEO, Orwell and Brainard will issue and
sell $15,334,000 aggregate principal amount of their Senior Secured
Guaranteed Notes due June 1, 2017 to the Purchaser, as such
agreement may be further amended, restated, supplemented or
otherwise modified from time to time.

“Guarantors” means, collectively, the Parent, Lightning, Kidron,
Spelman, Service Company and any other Person becoming a Guarantor
pursuant to Section 9.8 and “Guarantor” means, individually, any one
of them.

     Section 1.18. Amendment to Defined Terms. Schedule B to the Current Note Purchase Agreement
is hereby amended by adding the following new definitions thereto in proper alphabetical order:

“Debt Service Amount” is defined in Section 9.10(a).

“Debt Service Control Agreement” is defined in Section 9.10(a).

“Debt Service Reserve Account” is defined in Section 9.10(a).

“Depository Bank” is defined in Section 9.10(a).

“First Amendment” means the First Amendment and Joinder to Note
Purchase Agreement dated as of May 3, 2011 by and among the Issuer
and the Guarantors.

“Kidron” means Kidron Pipeline, LLC, an Ohio limited liability
company.

“Service Company” means Gas Natural Service Company, LLC, an Ohio
limited liability company.

“Spelman” means Spelman Pipeline Holdings, LLC, an Ohio limited
liability company.

     Section 1.19 Amendment to Schedule 5.4. Schedule 5.4 (Subsidiaries of the Company and
Ownership of Subsidiary Stock) to the Current Note Purchase Agreement is hereby amended and
restated in its entirety to read as set forth in Schedule 5.4 to this Amendment.

8

 

     Section 1.20 Amendment to Schedule 5.15. Schedule 5.15 (Existing Indebtedness) to the Current
Note Purchase Agreement is hereby amended and restated in its entirety to read as set forth in
Schedule 5.15 to this Amendment.

     Section 1.21. Amendment to Schedule 5.19. Schedule 5.19 (Real Property) to the Current Note
Purchase Agreement is hereby amended and restated in its entirety to read as set forth in Schedule
5.19 to this Amendment.

     Section 1.22. Amendment to Form of Note. The Form of Note attached as Exhibit 1 to the
Current Note Purchase Agreement is hereby amended and restated in its entirety to read as set forth
in Exhibit 1 to this Amendment.

Section 2. Joinder.

          Spelman, Kidron and Service Company each hereby agree to become a “Guarantor” and an “Obligor”
and to be bound by all of the terms, covenants and conditions set forth in the Note Purchase
Agreement and each other Financing Agreement, as applicable, to the same extent that such Persons
would have been bound if such Persons had been a signatory to the Current Note Purchase Agreement
on the execution date of the Current Note Purchase Agreement. Spelman, Kidron and Service Company
each hereby (a) make each of the representations and warranties and agree to each of the covenants
applicable to it contained in the Current Note Purchase Agreement, this Amendment and each other
Financing Agreement, as applicable, (ii) agree to execute this Amendment and each Financing
Agreement, as applicable, and (iii) agree that each reference to a “Guarantor” or an “Obligor” set
forth in the Current Note Purchase Agreement, this Amendment and each other Financing Agreement, as
applicable, shall include Spelman, Kidron and Service Company.

Section 3. Conditions Precedent.

          This Amendment shall not become effective until, and shall become effective on, the Business
Day when each of the following conditions shall have been satisfied (the “Effective Date”):

     (a) The Purchaser shall have received this Amendment, duly executed by each Obligor.

     (b) The Purchaser shall have consented to this Amendment as evidenced by its execution
hereof.

     (c) The representations and warranties of the Obligors set forth in Section 4 hereof
shall be true and correct as of the date of the execution and delivery of this Amendment and
as of the Effective Date.

     (d) Any consents from any holder or holders of any outstanding security or indebtedness
of the Obligors and any amendments of agreements pursuant to which any
securities or indebtedness may have been issued which shall be necessary to permit the

9

 

consummation of the transactions contemplated hereby shall have been obtained and all such
consents or amendments shall be reasonably satisfactory in form and substance to the
Purchaser and its special counsel.

     (e) The Purchaser shall have received all reasonable and necessary final,
non-appealable regulatory and other approvals in respect of the transactions contemplated by
this Amendment and the other Financing Agreements and evidence that in respect of the
transactions contemplated by this Amendment, the Obligors are in compliance with all
applicable regulatory and statutory requirements.

     (f) All corporate and other proceedings in connection with the transactions
contemplated by this Amendment and all documents and instruments incident to such
transactions shall be satisfactory to the Purchaser and its special counsel, and the
Purchaser and its special counsel shall have received all such counterpart originals or
certified or other copies of such documents as the Purchaser or its special counsel may
reasonably request.

     (g) The Purchaser shall have received such certificates of officers of the Obligors as
it may reasonably request with respect to this Amendment and the transactions contemplated
hereby.

     (h) The Purchaser shall have received by wire transfer to its account specified in
Schedule A to the Note Purchase Agreement (or otherwise specified to the Obligors in a
separate writing) a non-refundable amendment fee equal to $25,000.

Section 4. Representations and Warranties.

          The Obligors hereby, jointly and severally, represent and warrant to the Purchaser that as of
the date of execution and delivery of this Amendment and as of the Effective Date:

     (a) Each Obligor is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization.

     (b) Each Obligor has the requisite power to own its property and to carry on its
business as now being conducted.

     (c) Each Obligor is duly qualified and in good standing as a foreign corporation or
limited liability company, as applicable, authorized to do business in each jurisdiction in
which the failure to do so would, individually or in the aggregate, have a Material Adverse
Effect.

     (d) This Amendment, the Note Purchase Agreement and the transactions contemplated
hereby are within the requisite powers of each Obligor, have been duly authorized by all
necessary corporate or limited liability company action, as applicable,
on the part of each Obligor, and this Amendment and the Note Purchase Agreement have

10

 

been
duly executed and delivered by each Obligor and constitute legal, valid and binding
obligations of each Obligor enforceable in accordance with their respective terms.

     (e) After giving effect to this Amendment, there are no Defaults or Events of Default
under the Note Purchase Agreement.

     (f) The execution, delivery and performance of this Amendment and the Note Purchase
Agreement does not and will not result in a violation of or default under (i) the
organizational documents of any Obligor, (ii) any agreement to which any Obligor is a party
or by which any Obligor is bound or to which any Obligor or any of its properties is
subject, (iii) any order, writ, injunction or decree binding on any Obligor, or (iv) any
statute, regulation, rule or other law applicable to any Obligor.

     (g) Except for (i) the items described in Schedule 5.7 to the Note Purchase Agreement
(each of which will be satisfied prior to Closing, with no appeals having been filed and all
related appeal periods with respect thereto having passed) and (ii) the filing of the
Collateral Documents with the appropriate Governmental Authority (each of which will be
filed contemporaneously with the Closing), no consent, approval or authorization of, or
registration, filing or declaration with, any Governmental Authority is required in
connection with the execution, delivery or performance by the Obligors of this Amendment and
the Note Purchase Agreement.

     (h) All of the representations and warranties of the Obligors set forth in Section 5 of
the Current Note Purchase Agreement, as amended by this Amendment, are true and correct in
all respects.

Section 5. Miscellaneous.

     Section 5.1. Ratification of the Current Note Purchase Agreement. Except as amended herein,
all terms and provisions of the Current Note Purchase Agreement and related agreements and
instruments are hereby ratified, confirmed and approved in all respects. If and to the extent that
any of the terms or provisions of the Current Note Purchase Agreement are in conflict or
inconsistent with any of the terms or provisions of this Amendment, this Amendment shall govern.

     Section 5.2. References to the Note Purchase Agreement. Each reference in the Current Note
Purchase Agreement to “this Agreement,” “hereunder,” “hereof,” or words of similar import in
instruments or documents provided for in the Current Note Purchase Agreement or delivered or to be
delivered thereunder or in connection therewith, shall, except where the context otherwise
requires, be deemed a reference to the Note Purchase Agreement.

     Section 5.3. Fees and Expenses of Counsel. Without limiting Section 15 of the Current Note
Purchase Agreement, the Obligors jointly and severally agree to pay the additional fees and
disbursements of the Purchaser’s special counsel, Chapman and Cutler LLP, incurred in connection
with the negotiation, preparation, execution and delivery of this Amendment, the
Debt Service Control Agreement, the Collateral Documents and the transactions contemplated

11

 

hereby
and thereby which fees and disbursements shall be reflected in the statement of such special
counsel delivered to the Obligors in accordance with Section 4.6 of the Current Note Purchase
Agreement.

     Section 5.4. Governing Law. This Amendment shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State of Ohio excluding
choice-of-law principles of the law of such State that would permit the application of the laws of
a jurisdiction other than such State.

     Section 5.5. Survival. All warranties, representations, and covenants made by the Obligors
herein will be considered to have been relied upon by the Purchaser and will survive the execution
and delivery of this Amendment.

     Section 5.6. Successors and Assigns. This Amendment will inure to the benefit of and be
binding upon the successors and assigns of each of the parties. The provisions of this Amendment
for the benefit of the Purchaser are intended in all cases, whether explicitly so stated or not, to
be for the benefit of all holders, from time to time, of the Notes, and will be enforceable by any
such holder, whether or not an express assignment to such holder of rights under this Amendment has
been made by the Purchaser or its successors or assigns.

     Section 5.7. Counterparts. This Amendment may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which, taken together, shall constitute but
one and the same Amendment. Delivery of an executed counterpart of this Amendment by facsimile or
email shall be as effective as delivery of a manually executed counterpart of this Amendment.

     Section 5.8 Severability. Whenever possible, each provision of this Amendment will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Amendment is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without invalidating the
remainder of this Amendment unless the consummation of the transactions contemplated hereby is
materially adversely affected thereby.

     Section 5.9. No Novation. This Amendment shall, in no way, be deemed as a novation of the
terms of the Current Note Purchase Agreement.

     Section 5.10. Further Assurances. At Obligors’ expense, the parties hereto shall execute and
deliver such additional documents and take such further action as may be necessary or desirable to
effectuate the provisions and purposes of this Amendment.

[Remainder of Page Intentionally Blank]

12

 

     The execution hereof by the Purchaser shall constitute a contract among the Obligors and the
Purchaser for the uses and purposes hereinabove set forth. This Amendment may be executed in any
number of counterparts, each executed counterpart constituting an original but all together only
one agreement.

	 	 	 	 	 
	 	Great Plains Natural Gas Company, as the
Issuer

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

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

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

13

 

	 	 	 	 	 

	 	 	 	 	 
	 	Spelman Pipeline Holdings, LLC, as a
Guarantor

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

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

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

14

 

	 	 	 	 	 

This Amendment is hereby accepted and agreed to as of the date aforesaid.

	 	 	 	 	 
	 	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 	 
	 

15

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