Borrower:
Roanoke Gas Company
Account Number:
9531668488
BB&T
Note Number:
'00005
Address:
519 Kimball Avenue NE
Roanoke
, Virginia
 
Roanoke, VA 24016-2131
PROMISSORY NOTE
Date:
November 1, 2016

ROANOKE GAS COMPANY (the “Borrower”), (whether one or more) HEREBY REPRESENTS
THAT THE LOAN EVIDENCED HEREBY IS BEING OBTAINED FOR BUSINESS/COMMERCIAL OR
AGRICULTURAL PURPOSES AND NOT FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES. For
value received, the Borrower, jointly and severally if more than one, promises
to pay to BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation
(the "Bank"), or order, at any of Bank's offices in the above referenced city
(or such other place or places that may be hereafter designated by Bank), the
sum of SEVEN MILLION Dollars ($7,000,000), together with interest on the
outstanding balance thereof at the rate or rates provided below, in immediately
available currency of the United States of America.

¨     Borrower shall pay a prepayment fee as set forth in the Prepayment Fee
Addendum attached to this Promissory Note (“Note”).

Interest shall accrue from the date hereof on the unpaid balance outstanding
from time to time at the:

¨ Fixed rate of % per annum.
¨ Variable rate of the Bank's Prime Rate plus % per annum to be adjusted as the
Bank's Prime Rate changes. If checked here¨, the interest rate will not exceed
a(n)¨ fixed ¨average maximum rate of % or a ¨floating maximum rate of the
greater of % or the Bank's Prime Rate; and the interest rate will not decrease
below a fixed minimum rate of %. If an average maximum rate is specified, a
determination of any required reimbursement of interest by Bank will be made: ¨
when the Note is repaid in full by Borrower ¨ annually beginning on .
¨ Fixed rate of % per annum through which automatically converts on to a
variable rate equal to the Bank's Prime Rate plus % per annum which shall be
adjusted as such Prime Rate changes.
x The Adjusted LIBOR Rate, as defined on the attached Addendum to Promissory
Note.

Principal and interest are payable as follows:

x Principal (plus any accrued interest not otherwise scheduled herein)
        is due in full at maturity on November 1, 2021.
¨ Principal plus accrued interest    
¨ Payable in consecutive installments of ¨ Principal
commencing on
        ¨Principal and Interest
and continued on the same day of each calendar period thereafter, in equal
payments of $ , with one final payment of
all remaining principal and accrued interest due on .
x Accrued interest is payable monthly commencing on December 1, 2016 and
continuing on the same day of each calendar period
thereafter, with one final payment of all remaining interest due on November 1,
2021.
¨ Bank reserves the right in its sole discretion to adjust the fixed payment due
hereunder on and continuing on the same day of each
calendar period thereafter, in order to maintain an amortization period of no
more than months from the date of this Note. Borrower
understands the payment may increase if interest rates increase.
¨ Prior to an event of default, Borrower may borrow, repay, and reborrow
hereunder pursuant to the terms of the Loan Agreement,
hereinafter defined.
¨
¨ Borrower hereby authorizes Bank to automatically draft from its demand,
deposit, or savings account(s) with Bank or other bank, any
payment(s)due under this Note on the date(s) due. Borrower shall provide
appropriate account number(s) for account(s) at Bank or other bank.

Borrower shall pay to Bank, or order, a late fee in the amount of four percent
(4%) of any installment past due for fifteen (15) or more days. When any
installment payment is past due for fifteen (15) or more days, subsequent
payments shall first be applied to the past due balance. In addition, Borrower
shall pay to Bank a returned payment fee if the Borrower or any other obligor
hereon makes any payment at any time by check or other instrument, or by any
electronic means, which is returned to Bank because of nonpayment due to
nonsufficient funds.
All interest shall be computed and charged for the actual number of days elapsed
on the basis of a year consisting of three hundred sixty (360) days. In the
event periodic accruals of interest shall exceed any periodic fixed payment
amount described above, the fixed payment amount shall be immediately increased,
or additional supplemental interest payments required on the same periodic basis
as specified above (increased fixed payments or supplemental payments to be
determined in the Bank's sole discretion), in such amounts and at such times as
shall be necessary to pay all accruals of interest for the period and all
accruals of unpaid interest from previous periods. Such adjustments to the fixed
payment amount or supplemental payments shall remain in effect for so long as
any interest accruals shall exceed the original fixed payment amount and shall
be further adjusted upward or downward to reflect changes in any variable
interest rate; provided that unless elected otherwise above, the fixed payment
amount shall not be reduced below the original fixed payment amount. However,
Bank shall have the right, in its sole discretion, to lower the fixed payment
amount below the original payment amount. Notwithstanding any other provision
contained in this Agreement, in no event shall the provisions of this paragraph
be applicable to any promissory note which requires disclosures pursuant to the
Consumer Protection Act (Truth-In-Lending Act), 15 USC § 1601, et seq., as
implemented by Regulation Z.
This Note is executed and delivered by Borrower in connection with the following
agreements (if any) between Borrower or other parties owning collateral and
Bank:
Deed(s) of Trust / Mortgage(s)/Security Deeds granted in favor of Bank as
beneficiary / mortgagee:
¨ dated securing the maximum principal amount of $_________ granted by
________________________________________.
¨ dated securing the maximum principal amount of $________ granted by
________________________________________.
Assignment of Leases and Rents made to Bank as assignee:
¨ dated granted by
Security Agreement(s) conveying a security interest to Bank:
¨ dated given by
¨dated given by
                                              
1472 VA NB                             Page 1 of 4

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¨    Securities Account Pledge and Security Agreement dated , executed by .
¨    Control Agreement(s) dated , covering     Deposit Account(s)    Investment
Property
Letter of Credit Rights Electronic Chattel Paper
¨
Assignment of Certificate of Deposit, Security Agreement, and Power of Attorney
(for Certificated Certificates of Deposit) dated ,      executed by .

¨ Pledge and Security Agreement for Publicly Traded Certificated Securities
dated , executed by .
Assignment of Life Insurance Policy as Collateral dated , executed by .
x    Loan Agreement dated November 1, 2016, executed by Borrower and
Guarantor(s).
.
All of the terms, conditions and covenants of the above described agreements
(the "Agreements") are expressly made a part of this Note by reference in the
same manner and with the same effect as if set forth herein at length, and any
holder of this Note is entitled to the benefits of and remedies provided in the
Agreements and any other agreements by and between Borrower and Bank.
No delay or omission on the part of Bank or other holder hereof in exercising
any right hereunder shall operate as a waiver of such right or of any other
right of such holder, nor shall any delay, omission or waiver on any one
occasion be deemed a bar to or waiver of the same or of any other right on any
future occasion. Each Borrower under this Note regardless of the time, order or
place of signing waives presentment, demand, protest and notices of every kind
and assents to any one or more extensions or postponements of the time of
payment or any other indulgences, to any substitutions, exchanges or releases of
collateral if at any time there be available to the holder collateral for this
Note, and to the additions or releases of any other parties or persons primarily
or secondarily liable herefor.
An Event of Default (as defined in the Term Loan Agreement dated of even date
herewith between Bank and Borrower) shall constitute an event of default
hereunder.
    From and after any event of default hereunder, interest shall accrue on the
sum of the principal balance then outstanding at the variable rate equal to the
Bank's Prime Rate plus 5% per annum ("Default Rate") until such principal and
interest have been paid in full, provided that such rate shall not exceed at any
time the highest rate of interest permitted by the laws of the Commonwealth of
Virginia; and further provided that such rate shall apply after judgment. In
addition, upon default, the Bank may pursue its full legal remedies under the
Agreements and other remedies at law or equity, and the balance due hereunder
may be charged against any obligation of the Bank to any party including any
Obligor. Bank shall not be obligated to accept any check, money order, or other
payment instrument marked "payment in full" on any disputed amount due
hereunder, and Bank expressly reserves the right to reject all such payment
instruments. Borrower agrees that tender of its check or other payment
instrument so marked will not satisfy or discharge its obligation under this
Note, disputed or otherwise, even if such check or payment instrument is
inadvertently processed by Bank unless in fact such payment is in fact
sufficient to pay the amount due hereunder.
Unless otherwise required under a Loan Agreement, if applicable, and as long as
any indebtedness evidenced by this Note remains outstanding or as long as Bank
remains obligated to make advances, the Borrower shall furnish annually an
updated financial statement in a form satisfactory to Bank, which, when
delivered shall be the property of the Bank.
The term "Prime Rate," if used herein, means the rate of interest per annum
announced by the Bank from time to time and adopted as its Prime Rate at its
executive offices in Winston-Salem, North Carolina. The Prime Rate is one of
several rate indexes employed by the Bank when extending credit, and not
necessarily the lowest rate. Any change in the interest rate resulting from a
change in the Bank's Prime Rate shall become effective as of the opening of
business on the effective date of the change. If this Note is placed with an
attorney for collection, the Borrower agrees to pay, in addition to principal,
interest, and late fees, if any, all costs of collection, including but not
limited to all reasonable attorneys' fees incurred by Bank. All obligations of
the Borrower shall bind his heirs, executors, administrators, successors, and/or
assigns. Use of the masculine pronoun herein shall include the feminine and the
neuter, and also the plural. If more than one party shall execute this Note, the
term "Borrower" as used herein shall mean all the parties signing this Note and
each of them, and all such parties shall be jointly and severally obligated
hereunder. Wherever possible, each provision of this Note shall be interpreted
in such a manner to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under such law, such
provision shall be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note. Each Borrower hereby waives all exemptions
and homestead laws. The proceeds of the loan evidenced by this Note may be paid
to any Borrower.
From time to time the maturity date of this Note may be extended, or this Note
may be renewed in whole or in part, or a new note of different form may be
substituted for this Note, or changes may be made in consideration of loan
extensions, and the holder hereof, from time to time may waive or surrender,
either in whole or in part any rights, guaranties, security interests or liens,
given for the benefit of the holder in connection with the payment and the
securing of payment of this Note; but no such occurrence shall in any manner
affect, limit, modify, or otherwise impair any rights, guaranties or security of
the holder hereof not specifically waived, released, or surrendered in writing,
nor shall the Borrower or any obligor be released from liability by reason of
the occurrence of any such event. The holder hereof, from time to time, shall
have the unlimited right to release any person who might be liable hereon, and
such release shall not affect or discharge the liability of any other person who
is or might be liable hereon. No waivers and modifications shall be valid unless
in writing and signed by Bank. The Bank may, at its option, charge any fees for
the modification, renewal, extension, or amendment of any of the terms of this
Note unless expressly prohibited by the law of Virginia. In case of a conflict
between the terms of this Note and any Loan Agreement executed in connection
herewith, the priority of controlling terms shall be first this Note, then the
Loan Agreement. This Note shall be governed by and construed in accordance with
the laws of Virginia.

1472 VA NB                     Page 2 of 4

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REQUIRED INFORMATION FOR A NEW LOAN: To help the government fight the funding of
terrorism and money laundering activities, federal law requires Bank to obtain,
verify and record information that identifies each person or entity obtaining a
loan including the borrower's legal name, address, date of birth, driver's
license, organizational documents or other identifying documents. 

UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE BORROWER HEREBY WAIVES THE
RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS NOTE OR ANY
OF THE LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF
THE RELATIONSHIP BETWEEN THE BORROWER AND BANK. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR BANK TO MAKE THE LOAN AND ENTER INTO THIS AGREEMENT. FURTHER, THE
BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S
COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT SEEK TO
ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE OR AGENT
OF BANK, NOR BANK’S COUNSEL, HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY
THIS PROVISION.

(SIGNATURES ON FOLLOWING PAGE)

1472 VA NB                     Page 3 of 4

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PROMISSORY NOTE SIGNATURE PAGE
 
 
 
 
 
 
 
Borrower:
Roanoke Gas Company
Account Number:
9531668488
Note Number:
5
Note Amount:
$7,000,000
Date:
November 1, 2016

IN WITNESS WHEREOF, the Borrower, on the day and year first written above, has
executed, or caused this Note to be executed by its authorized officer or
representative, under seal.

If Borrower is a Corporation:
 
 
 
 
 
 
 
 
ROANOKE GAS COMPANY
WITNESS:
 
 

 
 
         /s/ Ray Vaughan
 
By:
                   /s/ John S. D'Orazio  
 
 
 
 
John S. D’Orazio
 
 
 
Title:
President
 
 
 
 
 
 
        /s/ Ray Vaughan
 
By:
                       /s/ Paul W. Nester
 
 
 
 
Paul W. Nester
 
 
 
Title:
Vice President

STATE OF __Virginia____________ )
CITY/COUNTY OF_Roanoke___________ )
 

   I HEREBY CERTIFY, that on this   1st     day of
  November            ,    2016                        , before me, the
undersigned, a Notary Public of the State aforesaid, personally appeared John S.
D'Orazio/Paul W. Nester                                                  , who
acknowledged himself to be the President/Vice President           of Roanoke Gas
Company                                                                                     a
Virginia Corporation                                 , who is personally known
to me, or has been satisfactorily proven to be, the person whose name is
subscribed to the foregoing instrument, and he acknowledged that he, being so
authorized to do, executed the foregoing instrument for the purposes therein
contained as the duly authorized            President/Vice
Pres.                                                  of said
                                   Corporation                                                                  by
signing the name of the
   Corporation                                             by himself
as                                             President/Vice
President               .

   Given under my hand and official seal this   1st    day of
  November          , 2016       .
 
(SEAL)
    /s/ Diane Light Conner
(SEAL)
 
Notary Public
 
 
My Commission Expires:
February 28, 2018
 

1472 VA NB                     Page 4 of 4

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BB&T

ADDENDUM TO PROMISSORY NOTE

THIS ADDENDUM TO PROMISSORY NOTE (“Addendum”) is hereby made a part of the
Promissory Note dated November 1, 2016, from ROANOKE GAS COMPANY (“Borrower”)
payable to the order of Branch Banking and Trust Company (“Bank”) in the
principal amount of $7,000,000 (including all renewals, extensions,
modifications and substitutions thereof, the “Note”).

I.    DEFINITIONS.

1.1    Adjusted LIBOR Rate means a rate of interest per annum equal to the sum
obtained (rounded upwards, if necessary, to the next higher 1/100th of 1.0%) by
adding (i) the One Month LIBOR plus (ii) 0.90 percent (%) per annum, which shall
be adjusted monthly on the first day of each LIBOR Interest Period. The Adjusted
LIBOR Rate shall be adjusted for any change in the LIBOR Reserve Percentage so
that Bank shall receive the same yield. The interest rate will in no instance
exceed the maximum rate permitted by applicable law and if checked here ¨ the
interest rate will not decrease below a fixed minimum rate of ______%. If
checked here ¨ the interest rate will not exceed ¨ a fixed maximum rate of
_______% or ¨ an average maximum rate of      %. If an average maximum rate is
specified, a determination of any required reimbursement of interest by Bank
will be made: ¨ when the Note is repaid in full by Borrower or ¨ annually
beginning on __________. If the loan has been repaid prior to this date, no
reimbursement will be made.

1.2    Business Day means a day other than a Saturday, Sunday, legal holiday or
any other day when the Bank is authorized or required by applicable law to be
closed.

1.3    LIBOR Advance means the advances made by Bank to Borrower evidenced by
this Note upon which the Adjusted LIBOR Rate of interest shall apply.

1.4    LIBOR Interest Period means the period, as may be elected by the Borrower
applicable to any LIBOR Advance, commencing on the date the Note is first made
(or the date of any subsequent LIBOR addendum to the Note) and (i) if adjusted
monthly, ending on the day that is immediately prior to the numerically
corresponding day of each month thereafter or (ii) if adjusted quarterly, ending
on the day that is immediately prior to the numerically corresponding day of
each quarter thereafter; provided that:

(a) any LIBOR Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such LIBOR Interest
Period shall end on the next preceding Business Day; and

(b) any LIBOR Interest Period which begins on a day for which there is no
numerically corresponding day in a subsequent month if adjusted monthly or in a
subsequent quarter if adjusted quarterly, shall end on the last Business Day of
each subsequent month if adjusted monthly or on the last Business Day of each
subsequent quarter if adjusted quarterly.

1.5    LIBOR Reserve Percentage means the maximum aggregate rate at which
reserves (including, without limitation, any marginal supplemental or emergency
reserves) are required to be maintained under Regulation D by member banks of
the Federal Reserve System with respect to dollar funding in the London
interbank market. Without limiting the effect of the foregoing, the LIBOR
Reserve Percentage shall reflect any other reserves required to be maintained by
such member banks by reason of any applicable regulatory change against (i) any
category of liability which includes deposits by reference to which the Adjusted
LIBOR Rate is to be determined or (ii) any category of extensions of credit or
other assets related to LIBOR.

1.6    One Month LIBOR means the average rate quoted on Reuters Screen LIBOR01
Page (or such replacement page) on the determination date for deposits in U. S.
Dollars offered in the London interbank market for one month determined as of
11:00 am London time two (2) Business Days prior to the commencement of the
applicable LIBOR Interest Period; provided that if the above method for
determining one month LIBOR shall not be available, the rate quoted in The Wall
Street Journal, or a rate determined by a substitute method of determination
agreed on by Borrower and Bank; provided, if such agreement is not reached
within a reasonable period of time (in Bank's sole judgment), a rate reasonably
determined by Bank in its sole discretion as a rate being paid, as of the
determination date, by first class banking organizations (as determined by Bank)
in the London interbank market for U. S. Dollar deposits.

1.7    Standard Rate means, for any day, a rate per annum equal to the Bank's
announced Prime Rate minus 0% per annum, and each change in the Standard Rate
shall be effective on the date any change in the Prime Rate is publicly
announced as being effective.

II.    LOAN BEARING ADJUSTED LIBOR RATE

2.1    Application of Adjusted LIBOR Rate. The Adjusted LIBOR Rate shall apply
to the entire principal balance outstanding of a LIBOR Advance for any LIBOR
Interest Period.

2.2    Adjusted LIBOR Based Rate Protections.

(a)    Inability to Determine Rate. In the event that Bank shall have
determined, which determination shall be final, conclusive and binding, that by
reason of circumstances occurring after the date of this Note affecting the
London interbank market, adequate and fair means do not exist for ascertaining
the One Month LIBOR on the basis provided for in this Note, Bank shall give
notice (by telephone

Account #9531668488 /Note #00005
(LIBOR Note Add'n (VA)(NB)1906
WCSR 37534472v1                        1

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confirmed in writing or by telecopy) to Borrower of such determination,
whereupon (i) no LIBOR Advance shall be made until Bank notifies Borrower that
the circumstances giving rise to such notice no longer exist, and (ii) any
request by Borrower for a LIBOR Advance shall be deemed to be a request for an
advance at the Standard Rate.

(b)    Illegality; Impracticability. In the event that Bank shall determine,
which determination shall be final, conclusive and binding, that the making,
maintaining or continuance of any portion of a LIBOR Advance (i) has become
unlawful as a result of compliance by Bank with any law, treaty, governmental
rule, regulation, guideline or order (or would conflict with any of the same not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause Bank material
hardship, as a result of contingencies occurring after the date of this Note
materially and adversely affect the London interbank market or Bank's ability to
make LIBOR Advances generally, then, and in any such event, Bank shall give
notice (by telephone confirmed in writing or by telecopy) to Borrower of such
determination. Thereafter, (x) the obligation of Bank to make any LIBOR Advances
or to convert any portion of the loan to a LIBOR Advance shall be suspended
until such notice shall be withdrawn by Bank, and (y) any request by Borrower
for a LIBOR Advance shall be deemed to be a request for an advance at the
Standard Rate.

This Addendum shall operate as a sealed instrument.

 
 
 
 
 
 
 
ROANOKE GAS COMPANY
 
WITNESS:
 
 
 
 
 
 
 
   /s/ Ray Vaughan
By:
/s/ John S. D'Orazio
(SEAL)
 
Name:
John S. D’Orazio
 
 
Title:
President
 
 
 
 
 
   /s/ Ray Vaughan
By:
/s/ John S. D'Orazio
(SEAL)
 
Name:
Paul W. Nester
 
 
Title:
Vice President
 
 
 
 
 
 
 
 
 

Account #9531668488 /Note #00005
(LIBOR Note Add'n (VA)(NB)1906
WCSR 37534472v1                        2