Document:

SIXTH AMENDED REPLACEMENT
AND RESTATED CREDIT AGREEMENT

 

New York

December 17, 2021

 

	Borrower:  	Corning Natural Gas Corporation
	a(n) ☐ individual  ☒ corporation  ☐ general partnership   ☐ limited liability company   ☐
	organized under the laws of  	New York
     
	having its chief executive office at 	330 West
William Street, Corning, New York 14830

 

		Bank:	M&T BANK, a New York banking corporation with its chief executive office at One M&T Plaza,
Buffalo, NY 14203. Attention: Office of General Counsel.

 

The Bank and the Borrower agree as follows:

 

1.     DEFINITIONS.

 

		a.	“Agreement” means this Sixth Amended Replacement and Restated Credit Agreement.

 

		b.	“Capital Expenditures” (“CAPEX”) means, at any time, all acquisitions of
machinery, equipment, land, leaseholds, buildings, improvements and all other expenditures considered to be for fixed assets under G.A.A.P.,
consistently applied. Where an asset is acquired under a capital lease, the amount required to be capitalized shall be considered a capital
expenditure during the first year of the lease.

 

		c.	“Cash Flow” means the sum of (i) net income after tax,
dividends and distributions, plus (ii) depreciation expense and amortization, plus (iii) Interest Expense, plus (iv) non-cash expenses
and minus (v) non-cash income, all determined in accordance with G.A.A.P. all determined in accordance with G.A.A.P.

 

		d.	“Cash Flow Coverage” means the ratio of Cash Flow to the sum of (i) the current portion
of all Long Term Debt as specified in the financial statement dated twelve (12) months prior, plus (ii) Interest Expense, all determined
in accordance with G.A.A.P

 

		e.	“Credit” means any and all credit facilities and any other financial accommodations
made by the Bank in favor of the Borrower whether now or hereafter in existence.

 

		f.	“Current Assets” means, at any time, the aggregate amount of all current assets, including,
but not limited to, cash, cash equivalents, marketable securities, receivables maturing within twelve (12) months from such time, and
inventory (net of LIFO Reserve), but excluding prepaid expenses and officer, stockholder, employee and related entity advances and receivables,
all as determined in accordance with G.A.A.P.

 

		g.	“Current Portion of Long-Term Debt” (“CPLTD”) means, for any period, the
scheduled principal loan or capital lease payments paid or required to be paid during the applicable period.

 

		h.	“Current Liabilities” means, at any time, the aggregate amount of all liabilities and
obligations which are due and payable on demand or within twelve (12) months from such time, or should be properly reflected as attributable
to such twelve (12) month period in accordance with G.A.A.P.

 

		i.	“Current Ratio” means the ratio of Current Assets to Current Liabilities.

 

		i-1.	“Debt Service Coverage Ratio” means the ratio of (i) net income after taxes, dividends/distributions,
plus (ii) interest expenses, plus/minus (iii) non-cash expenses/income to (iv) the sum of CPLTD plus interest expense.

 

     

     

    
		j.	“Distributions” means any dividend or other form of distribution (whether in cash,
securities or other property) with respect to any stock, membership or other form of equity interest in Borrower or any Subsidiary, or
any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such interests or any option, warrant or other right to acquire
any such interests, in each case in accordance with the applicable governing documents of Borrower or Subsidiary, as the case may be,
or otherwise.

 

		k.	“EBITDA” shall mean net income after tax, plus depreciation, plus amortization, plus interest
expense, plus non-cash expenses, less non-cash income, all as determined in accordance with G.A.A.P.

 

 

		l.	“Fixed Charge Coverage Ratio” means, at any time, EBITDA less CAPEX less Distributions
(but not preferred dividends) plus rental and operating lease payments plus other defined fixed charges divided by CPLTD plus capital
leases plus Interest Expense plus rental and operating lease payments.

 

		m.	“G.A.A.P.” means, with respect to any date of determination, generally accepted accounting
principles as used by the Financial Accounting Standards Board and/or the American Institute of Certified Public Accountants consistently
applied and maintained throughout the periods indicated.

 

		n.	“Interest Expense” means all finance charges reflected on the income statement as interest
expense for all obligations of Borrower to any person, including, but not limited to, Bank, as shown on any properly prepared balance
sheet in accordance with G.A.A.P.

 

		o.	“Long Term Debt” means all obligations of Borrower to any person, including, but not
limited to, the Obligations, payable more than twelve (12) months from the date of their creation, which in accordance with G.A.A.P. are
properly shown on the balance sheet as a liability (excluding reserves for deferred income taxes) for the period then ended.

 

p.       “Obligations”
means any and all indebtedness or other obligations of the Borrower to the Bank in any capacity, now existing or hereafter incurred, however
created or evidenced, regardless of kind, class or form, whether direct, indirect, absolute or contingent (including obligations pursuant
to any guaranty, endorsement, other assurance of payment or otherwise), whether joint or several, whether from time to time reduced and
thereafter increased, or entirely extinguished and thereafter reincurred, together with all extensions, renewals and replacements thereof,
and all interest, fees, charges, costs or expenses which accrue on or in connection with the foregoing, including any indebtedness or
obligations (i) not yet outstanding but contracted for, or with regard to which any other commitment by the Bank exists; (ii) arising
prior to, during or after any pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding; (iii) owed by the Borrower to others and which the Bank obtained, or may obtain, by assignment
or otherwise; and (iv) payable under this Agreement, and (v) any amounts now or hereafter due and owing from Borrower to Bank arising
from or in connection with any interest rate swap agreement, now existing or hereafter entered into between Borrower and Bank, and any
costs incurred by bank in connection therewith, including without limitation, any interest, expenses, fees, penalties or other charges
associated with any obligations undertaken by Bank to hedge or offset Bank’s obligations pursuant to such swap agreement, or the
termination of any such obligations, shall be (i) deemed additional interest and/or a related expense (to be determined in the sole discretion
of Bank) due in connection with the principal amount of the Obligations subject to this Sixth Amended Replacement and Restated Credit
Agreement to the full extent thereof, and included in any judgment in any proceeding instituted by Bank or its agents against Debtor for
collection of any of the Obligations owed by Borrower to Bank.

 

		q.	“Permitted Distributions” has the meaning set forth in the Schedule.

 

		r.	“Permitted Guaranties” has the meaning set forth in the Schedule.

 

		s.	“Permitted Indebtedness” has the meaning set forth in the Schedule.

 

		t.	“Permitted Investments” has the meaning set forth in the Schedule.

 

		u.	“Permitted Liens” has the meaning set forth in the Schedule.

 

		v.	“Permitted Loans” has the meaning set forth in the Schedule.

 

		w.	“Quick Ratio” means the ratio of Current Assets less inventory (net of LIFO Reserve),
to Current Liabilities.

 

		x.	“Schedule” means Schedule A, attached hereto and made a part hereof.

 

     

     

    

		y.	“Subordinated Debt” means all indebtedness of the Borrower which has been formally
subordinated to payment and collection of the Obligations on written terms approved by Bank in writing.

 

		z.	“Subsidiary” means any corporation or other business entity of which at least fifty
percent (50%) of the voting stock or other ownership interest is owned by the Borrower directly or indirectly through one or more Subsidiaries.

 

		aa.	“Tangible Net Worth” means the aggregate assets of Borrower
excluding all intangible assets, including, but not limited to, goodwill, licenses, trademarks, patents, copyrights, organization costs,
appraisal surplus, officer, stockholder, related entity and employee advances or receivables, mineral rights and the like, less liabilities,
plus Subordinated Debt, all determined in accordance with G.A.A.P. (except to the extent that under G.A.A.P. “tangible net worth”
excludes leasehold improvements which are included in “Tangible Net Worth” as defined herein).

 

		bb.	“Total Funded Debt divided by EBITDA” means as the sum of all obligations for borrowed
money (including Subordinated Debt and guaranties of obligations for borrowed money) plus all capital lease obligations, divided
by EBITDA, in each case calculated in accordance with G.A.A.P.

 

		cc.	“Total Liabilities” means the aggregate amount of all assets of the Borrower less the
sum of shareholder equity and Subordinated Debt (if any), as shown on the balance sheet properly prepared in accordance with G.A.A.P.

 

		dd.	“Transaction Documents” means this Agreement and all documents, instruments or other
agreements by the Borrower in favor of the Bank in connection (directly or indirectly) with the Obligations, whether now or hereafter
in existence, including, without limitation, promissory notes, security agreements, guaranties and letter of credit reimbursement agreements.

 

		ee.	“Unencumbered Liquid Assets” means cash, cash equivalents and/or publicly traded/quoted
marketable securities acceptable to Bank in its sole discretion, free of any lien or other encumbrance. Account assets held in a fiduciary
capacity by Borrower shall not qualify as Unencumbered Liquid Assets.

 

		ff.	“Unfunded Capital Expenditures” means, for any relevant period, the amount of Capital
Expenditures paid for out of ordinary operating cash flow and not financed through the incurrence of debt or the issuance of equity.

 

		gg.	“Working Capital” means that amount which is equal to the excess of Current Assets
over Current Liabilities.

 

		hh.	Corning Revolver. Means the Replacement Revolving Line Note between Bank and Corning Natural Gas Corporation
dated December 17, 2021 in the maximum principal amount of $8,500,000.00, including any extension or modification thereof.

 

		2.	REPRESENTATIONS AND WARRANTIES. The Borrower makes the following representations and warranties
and any “Additional Representations and Warranties” on the Schedule, all of which shall be deemed to be continuing representations
and warranties as long as this Agreement is in effect:

 

		a.	Good Standing; Authority. The Borrower and each Subsidiary (if either is not an individual) is
duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was formed. The Borrower and each
Subsidiary is duly authorized to do business in each jurisdiction in which failure to be so qualified might have a material adverse effect
on its business or assets and has the power and authority to own each of its assets and to use them in the ordinary course of business
as contemplated now and in the future.

 

		b.	Compliance. The Borrower and each Subsidiary conducts its business and operations and the ownership
of its assets in compliance with each applicable statute, regulation and other law, including environmental laws. All approvals, including
authorizations, permits, consents, franchises, licenses, registrations, filings, declarations, reports and notices (the “Approvals”)
necessary for the conduct of the Borrower’s and each Subsidiary’s business and for the Credit have been duly obtained and
are in full force and effect. The Borrower and each Subsidiary is in compliance with the Approvals. The Borrower and each Subsidiary (if
either is not an individual) is in compliance with its certificate of incorporation, by-laws, partnership agreement, articles of organization,
operating agreement or other applicable organizational or governing document as may be applicable to the Borrower or a Subsidiary depending
on its organizational structure (“Governing Documents”). The Borrower and each Subsidiary is in compliance with each agreement
to which it is a party or by which it or any of its assets is bound.

 

		c.	Legality. The execution, delivery and performance by the Borrower of this Agreement and all related
documents, including the Transaction Documents, (i) are in furtherance of the Borrower’s purposes and within its power and authority;
(ii) do not (A) violate any statute, regulation or other law or any judgment, order or award of any court, agency or other governmental
authority or of any arbitrator with respect to the Borrower or any Subsidiary or (B) violate the Borrower’s or any Subsidiary’s
Governing Documents (if either is not an individual), constitute a default under any agreement binding on the Borrower or any Subsidiary
or result in a lien or encumbrance on any assets of the Borrower or any Subsidiary; and (iii) if the Borrower or any Subsidiary is not
an individual, have been duly authorized by all necessary organizational actions.

 

     

     

    

		d.	Fiscal Year. The fiscal year of the Borrower is the calendar year unless the following blank states
otherwise: year ending September 30th.

 

		e.	Title to Assets. The Borrower and each Subsidiary has good and marketable title to each of its
assets free of security interests, mortgages or other liens or encumbrances, except as set forth on the Schedule titled “Permitted
Liens” or pursuant to the Bank’s prior written consent.

 

		f.	Judgments and Litigation. There is no pending or threatened claim, audit, investigation, action
or other legal proceeding or judgment, order or award of any court, agency or other governmental authority or arbitrator (any, an “Action”)
which involves the Borrower, its Subsidiaries or their respective assets and might have a material adverse effect upon the Borrower or
any Subsidiary or threaten the validity of the Credit, any Transaction Document or any related document or action. Borrower will immediately
notify the Bank in writing upon acquiring knowledge of any such Action.

 

		g.	Full Disclosure. Neither this Agreement nor any certificate, financial statement or other writing
provided to the Bank by or on behalf of the Borrower or any Subsidiary contains any statement of fact that is incorrect or misleading
in any material respect or omits to state any fact necessary to make any such statement not incorrect or misleading. The Borrower has
not failed to disclose to the Bank any fact that might have a material adverse effect on the Borrower or any Subsidiary.

 

		3.	AFFIRMATIVE COVENANTS. So long as this Agreement is in effect, the Borrower will comply, and cause
each of its Subsidiaries to comply, with the following covenants and any other “Additional Affirmative Covenant” contained
in the Schedule:

 

 

 

 

 

a)       Financial Statements and Other Information.
Promptly deliver to the Bank (i) within sixty (60) days after the end of each of its first three fiscal quarters, an internally prepared
financial statement of the Borrower and each subsidiary as of the end of such quarter, which financial statement shall consist
of income and cash flows for the quarter, for the corresponding quarter in the previous fiscal year and for the period from the end of
the previous fiscal year, with a consolidating and consolidated balance sheet as of the fiscal year end all in such detail as the
Bank may request; (ii) Borrower shall cause Corning Natural Gas Holding Corporation (“Holding”) to promptly deliver
to the Bank copies of all annual reports, proxy statements and similar information distributed to shareholders, partners or members and
of all filings with the Securities and Exchange Commission and the Pension Benefit Guaranty Corporation and shall provide in form
satisfactory to the Bank: (i) within sixty (60) days after the end of each of its first three fiscal quarters, consolidating and
consolidated statements of income and cash flows for the quarter, for the corresponding quarter in the previous fiscal year and for the
period from the end of the previous fiscal year, with a consolidating and consolidated balance sheet as of the quarter end; and (ii) within
one-hundred twenty days (120) after the end of each fiscal year, consolidating and consolidated statements of Holding’s
income and cash flows and its consolidating and consolidated balance sheet as of the end of such fiscal year, setting forth comparative
figures for the preceding fiscal year and to be:

 

☒
audited          o
reviewed          q
compiled

 

by an independent certified public accountant acceptable
to the Bank; all such statements shall be certified by Holding’s chief financial officer or partner to be correct, not misleading
and in accordance with Holding’s records and to present fairly the results of Holding’s operations and cash
flows and if annual its financial position at year end in conformity with generally accepted accounting principles. If no box is checked,
Holding shall deliver financial statements and information in the form and at the times satisfactory to the Bank. Holding
represents that its assets are not subject to any liens, encumbrances or contingent liabilities except as fully disclosed to the Bank
in such statements. Holding authorizes the Bank from time to time to obtain, verify and review all financial data deemed appropriate
by the Bank in connection with the Obligations, including without limitation credit reports from agencies. Holding understands
this requirement and has satisfied itself as to its meaning and consequences and acknowledges that it has made its own arrangements
for keeping informed of changes or potential changes affecting the Borrower including the Borrower’s financial condition; within
one hundred twenty (120) days after the end of each fiscal year, internally prepared statement of the Borrower and internally prepared
consolidating and consolidated statements of income and cash flows and its consolidating and consolidated balance sheet as of the
end of such fiscal year, 

     

     

    

setting forth comparative figures for the preceding fiscal year; all such statements shall be certified by the
Borrower’s chief financial officer to be correct and in accordance with the Borrower’s and each Subsidiary’s records
and to present fairly the results of the Borrower’s and each Subsidiary’s operations and cash flows and its financial position
at year end; and (iii) with each of the financial statements set forth above in clauses (i) and (ii) statement of income, a certificate
executed by the Borrower’s chief executive or chief financial officers or other such person responsible for the financial management
of the Borrower (A) setting forth the computations required to establish the Borrower’s compliance with each financial covenant,
if any, during the statement period, (B) stating that the signer of the certificate has reviewed this Agreement and the operations and
condition (financial or other) of the Borrower and each of its Subsidiaries during the relevant period and (C) stating that no Event of
Default occurred during the period, or if an Event of Default did occur, describing its nature, the date(s) of its occurrence or period
of existence and what action the Borrower has taken with respect thereto; and (iv) prior to December 31 of each year, Borrower’s
operating and capital budgets for the succeeding year. The Borrower shall also promptly provide the Bank with copies of all annual reports,
proxy statements and similar information distributed to shareholders, partners or members, and copies of all filings with the Securities
and Exchange Commission and the Pension Benefit Guaranty Corporation, and shall provide, in form satisfactory to the Bank, such additional
information, reports or other information as the Bank may from time to time reasonably request regarding the financial and business affairs
of the Borrower or any Subsidiary. If the Borrower is an individual, the Borrower shall provide annually a personal financial statement
in form and detail acceptable to the Bank and such other financial information as the Bank may from time to time reasonably request. Promptly
upon the request of the Bank from time to time, Borrower shall supply all additional information requested and permit the Bank’s
officers, employees, accountants, attorneys and other agents to (x) visit and inspect each of Borrower’s premises, (y) Upon no less
than seven (7) days advance written notice to Borrower Bank may, at Bank’s sole expense, examine, audit, copy and extract from Borrower’s
records and (z) discuss Borrower’s or its affiliates’ business, operations, assets, affairs or condition (financial or other)
with its responsible officers and independent accountants.

 

		b.	Accounting; Tax Returns and Payment of Claims. Maintain a system of accounting and reserves in
accordance with generally accepted accounting principles, has filed and will file each tax return required of it and, except as disclosed
in the Schedule, has paid and will pay when due each tax, assessment, fee, charge, fine and penalty imposed by any taxing authority upon
it or any of its assets, income or franchises, as well as all amounts owed to mechanics, materialmen, landlords, suppliers and the like
in the normal course of business. Borrower shall notify Bank of any pending assessments or adjustments of its income tax payable with
respect to any year.

 

		c.	Inspections. Promptly upon the Bank’s request permit the Bank’s officers, attorneys
or other agents to inspect its and its Subsidiary’s premises, examine and copy its records and discuss its and its Subsidiary’s
business, operations and financial or other condition with its and its Subsidiary’s responsible officers and independent accountants.

 

		d.	Operating Accounts. Maintain all bank accounts with the Bank.

 

		e.	Changes in Management and Control. Immediately upon any change in the identity of the Borrower’s
chief executive officers or in its beneficial ownership, the Borrower will provide to the Bank a certificate executed by its senior individual
authorized to transact business on behalf of the Borrower, specifying such change.

 

		f.	Borrower Notices. Immediately upon acquiring reason to know of (i) any Event of Default, (ii) any
event or condition that might have a material adverse effect upon the Borrower or any Subsidiary or (iii) any change of its address or
of the location of any collateral securing the Obligations, the Borrower will provide to the Bank a certificate executed by the Borrower’s
senior individual authorized to transact business on behalf of the Borrower, specifying the date(s) and nature of the event and what action
the Borrower or its Subsidiary has taken or proposes to take with respect to it.

 

		g.	Insurance. Maintain its property in good repair and will on request provide the Bank with evidence
of insurance coverage satisfactory to the Bank, including fire and hazard, liability, workers’ compensation and business interruption
insurance and flood hazard insurance as required.

 

		h.	Additional Closing Conditions. As an additional condition to any advance of new funds to Borrower on
or after the date of this Agreement to be evidenced by the Multiple Disbursement Term Note: (i) Borrower must provide to Bank evidence
that it has contributed from working capital the amount of not less than 30% of the cost of any capital expenditure project financed with
such advance; and (ii) Borrower must provide a copy of its most current capital expenditure tracking report submitted to the State of
New York Public Service Commission with any request for advance.

  

		4.	NEGATIVE COVENANTS. As long as this Agreement is in effect, the Borrower shall not violate, and
shall not suffer or permit any of its Subsidiaries to violate, any of the following covenants and any “Additional Negative Covenant”
on the Schedule. The Borrower shall not:

 

		a.	Intentionally Omitted.

 

     

     

    

		b.	Intentionally Omitted.

 

		c.	Intentionally Omitted.

 

		d.	Intentionally Omitted. 

 

		e.	Intentionally Omitted.

 

		f.	Intentionally Omitted. 

 

		g.	Changes in Form or Control. (i) Transfer or dispose of substantially all of its assets, (ii) acquire
substantially all of the assets of any other entity, (iii) do business under or otherwise use any name other than its true name or (iv)
make any material change in its business, structure, ownership, purposes or operations. If the Borrower or any Subsidiary is not an individual,
(i) participate in any merger, consolidation or other absorption or (ii) make, terminate or permit to be revoked any election pursuant
to Subchapter S of the Internal Revenue Code.

 

		h.	Sale of Assets. Sell, transfer lease or otherwise dispose of any assets (including, without limitation,
pursuant to any sale/leaseback transaction, securitization transaction, or with respect to any equity interest owned by it) other than
sales, transfers and dispositions of (y) inventory in the ordinary course of business and (z) used, obsolete, worn out or surplus equipment
or property in the ordinary course of business;

 

		5.	FINANCIAL COVENANTS. During the term of this Agreement, the Borrower shall not violate, and shall
not suffer or permit any of its Subsidiaries to violate, any of the following covenants (complete applicable financial covenant) or any
Additional Financial Covenants on the Schedule. For purposes of this Section, if the Borrower has any Subsidiaries all references to
the Borrower shall include the Borrower and all of its Subsidiaries on a consolidated basis. Unless a different measurement period
is specified, compliance for the financial covenants shall be required at all times.

 

☐       A.       Borrower
shall maintain Tangible Net Worth of not less than $_________________, measured (select one: quarterly or annually) ______________ as
of each (select one: quarter or fiscal year) ___________ end.

 

☒       B.       Borrower
shall maintain a ratio of Total Funded Debt, excluding the then principal balance on the Corning Revolver, to Tangible Net Worth
of not greater than 1:40:1.0, measured quarterly based on Borrower’s trailing twelve (12) month operating performance
as reflected in Borrower’s fiscal quarterly financial statements. 

 

☐       C.       Borrower
shall maintain a Fixed Charge Coverage Ratio of not less than [___.___] to 1.00 measured quarterly on a trailing twelve month basis, commencing
with the period ending [__________________].

 

☒       D.       Borrower
shall maintain a ratio of Total Funded Debt, (excluding the then principal balance due on the Corning Revolver) to EBITDA of not
greater than 3.75:1.0, measured quarterly based on Borrower’s trailing twelve (12) month operating performance
as reflected in Borrower’s fiscal quarterly financial statements

 

☐       E.       Borrower
shall not have suffered a net loss as of each fiscal year end, as determined in accordance with G.A.A.P., as reflected on its financial
statements furnished to Bank pursuant to the requirements of this Agreement.

 

☐       F.       Borrower
shall maintain a Current Ratio of not less than ________________:______________, measured (select one: quarterly or annually) ______________
as of each (select one: quarter or fiscal year) ___________ end.

 

☐       G.       Borrower
shall maintain a Quick Ratio of not less than ________________ to 1.00, measured [quarterly/annually] as of each quarter/fiscal year]
end.

 

☐       H.       Borrower
shall maintain Working Capital of not less than $______________________________, measured (select one: quarterly or annually) ______________
as of each (select one: quarter or fiscal year)___________ end.

 

☒       I.       Minimum
Debt Service Coverage Ratio. Borrower shall maintain a Minimum Debt Service Coverage Ratio of not less than 1.10:1.0, measured
quarterly based on Borrower’s trailing twelve (12) month operating performance as reflected in Borrower’s fiscal quarterly
financial statements. 

 

☐       J.       Without
the prior written consent of Bank, Borrower shall not make any Capital Expenditures in excess of $______________ in the aggregate during
any fiscal year of Borrower.

 

☐       K.       Borrower
shall not pay or accrue during any fiscal year compensation (including but not limited to all salary, bonuses, consulting, management
or other fees, rentals and other payments to any person owning or managing 5%or more of 

     

     

    

the Borrower or any relative or cohabitant of
such a person, and to any entity under common control with or controlling the Borrower) exceeding $_______________ in the aggregate.

 

☐       L.       Borrower
shall not become obligated as lessee pursuant to operating leases exceeding $_______________ in the aggregate during any fiscal year.

 

		6.	DEFAULT.

 

		a.	Events of Default. Any of the following events or conditions shall constitute an “Event of
Default”: (i) failure by the Borrower to pay when due (whether at the stated maturity, by acceleration or otherwise) the Obligations,
or any part thereof, or there occurs any event or condition which after notice, lapse of time or both will permit acceleration of any
Obligation; (ii) Borrower defaults in the performance of any obligation, condition, covenant or other provision of this Agreement, the
other Transaction Documents or any other agreement with the Bank or any of its affiliates or subsidiaries (collectively, “Affiliates”);
(iii) failure by the Borrower to pay when due (whether at the stated maturity, by acceleration, upon demand or otherwise) any indebtedness
or obligation owing to any third party or Affiliate or the occurrence of any event which could result in acceleration of payment of any
such indebtedness or the failure to perform any agreement with any third party or Affiliate; (iv) the sale, assignment transfer or delivery,
by operation of law or otherwise, of all or substantially all of the assets of the Borrower or the ownership interest in Borrower
to a third party; (v) a non-individual Borrower, without the Bank’s prior written consent, engages in, agrees to or approves a plan
for (a) reorganization, (b) merger or consolidation, (c) division into (or of) one or more entities or series of entities or allocation
or transfer of any of Borrower’s assets or liabilities as a result of such a division, (d) conversion to another form of business
entity, or (e) dissolution of Borrower or cessation by Borrower as a going business concern; (vi) the death or judicial declaration of
incompetency of Borrower, if an individual; (vii) failure by Borrower to pay, withhold or collect any tax as required by law; the service
or filing against Borrower or any of its assets of any lien (other than a lien permitted in writing by the Bank), judgment, garnishment,
order or award which Bank in good faith determines shall have a material adverse effect on the Borrower or the Borrower’s ability
to pay or perform the Obligations; (viii) if Borrower becomes insolvent or is generally not paying its debts as such debts become
due; (ix) the making of any general assignment by Borrower for the benefit of creditors; the appointment of a receiver or similar trustee
for Borrower or its assets; or the making of any, or sending notice of any intended, bulk sale; (x) Borrower commences (or has commenced
against it and not dismissed or stayed within forty-five (45) days) any proceeding or request for relief under any bankruptcy, insolvency
or similar laws now or hereafter in effect in the United States of America or any state or territory thereof or any foreign jurisdiction
or any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against or winding up of affairs of Borrower;
(xi) any representation or warranty made in this Agreement, any other Transaction Documents, any related document, any other agreement
between Borrower and the Bank or any Affiliate or in any financial statement of Borrower or elsewhere was misleading in any material respect
when made; Borrower omits to state a material fact necessary to make the statements made in this Agreement, any other Transaction Document,
any related document, any other agreement between Borrower and the Bank or any Affiliate or any financial statement of Borrower or elsewhere
not misleading in light of the circumstances in which they were made; or, if upon the date of execution of this Agreement, there shall
have been any material adverse change in any of the facts disclosed in any financial statement, representation, warranty or elsewhere
that was not disclosed in writing to the Bank at or prior to the time of execution hereof; (xii) any pension plan of Borrower fails to
comply with applicable law or has vested unfunded liabilities that, in the opinion of the Bank, might have a material adverse effect on
Borrower’s ability to repay its debts; (xiii) an adverse change in the Borrower, its business, assets, operations, management, ownership,
affairs or condition (financial or otherwise) or the Bank’s collateral from the status shown on any financial statement or other
document submitted to the Bank or any Affiliate, and which change the Bank determines will have a material adverse effect on (a) the Bank’s
collateral, the Borrower, its business, assets, operations or condition (financial or otherwise), or (b) the ability of the Borrower to
pay or perform any obligation to the Bank; (xiv) any indication or evidence received by the Bank that the Borrower may have directly or
indirectly engaged in any type of activity which, in the Bank’s discretion, might result in the forfeiture of any property of the
Borrower to any governmental authority; (xv) the occurrence of any event described in sub-paragraph (i) through and including (xiv) hereof
with respect to any Subsidiary, endorser, guarantor or any other party liable for, or whose assets or any interest therein secures, payment
of any of the Obligations; (xvi) Borrower fails to supply new or additional collateral within ten (10) days of request by the Bank; or
(xvii) the Bank in good faith deems itself insecure with respect to payment or performance of the Obligations.

 

		b.	Rights and Remedies Upon Default. Upon the occurrence of any Event of Default, the Bank without
demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law) to
or upon the Borrower, any Subsidiary or any other person (all and each of which demands, presentments, protests, advertisements and notices
are hereby waived), may exercise all rights and remedies under the Borrower’s or its Subsidiaries’ agreements with the Bank
or its Affiliates, applicable law, in equity or otherwise and may declare all or any part of any Obligations not payable on demand to
be immediately due and payable without demand or notice of any kind and terminate any obligation it may have to grant any additional loan,
credit or other financial accommodation to the Borrower or any Subsidiary. All or any part of any Obligations whether or not payable on
demand, shall be immediately due and payable automatically upon the occurrence of an Event of Default in sub-paragraphs (ix) or (x) above.
The provisions hereof are not intended in any way to affect any rights of the Bank with respect to any Obligations which may now or hereafter
be payable on demand.

 

     

     

    

		7.	EXPENSES. The Borrower shall pay to the Bank on demand all costs and expenses (including all fees
and disbursements of counsel retained for advice, suit, appeal or other proceedings or purpose and of any experts or agents it may retain),
which the Bank may incur in connection with (i) the administration of the Obligations, including any administrative fees the Bank may
impose for the preparation of discharges, releases or assignments to third-parties; (ii) the enforcement and collection of any Obligations
or any guaranty thereof; (iii) the exercise, performance, enforcement or protection of any of the rights of the Bank hereunder; or (iv)
the failure of the Borrower or any Subsidiary to perform or observe any provisions hereof. After such demand for payment of any cost,
expense or fee under this Section or elsewhere under this Agreement, the Borrower shall pay interest at the highest default rate specified
in any instrument evidencing any of the Obligations from the date payment is demanded by the Bank to the date reimbursed by the Borrower.
All such costs, expenses or fees under this Agreement shall be added to the Obligations.

 

		8.	TERMINATION. This Agreement shall remain in full force and effect until (i) all Obligations outstanding,
or contracted or committed for (whether or not outstanding), shall be finally and irrevocably paid in full and (ii) all Transaction Documents
have been terminated by the Bank.

 

		9.	RIGHT OF SETOFF. If an Event of Default occurs, the Bank shall have the right to set off against
the amounts owing under this Agreement and the other Transaction Documents any property held in a deposit or other account or otherwise
with the Bank or its Affiliates or otherwise owing by the Bank or its Affiliates in any capacity to the Borrower, its Subsidiary or any
guarantor of, or endorser of any of the Transaction Documents evidencing, the Obligations. Such setoff shall be deemed to have been exercised
immediately at the time the Bank or such Affiliate elect to do so.

 

		10.	USA PATRIOT ACT NOTICE. Bank hereby notifies the Borrower that pursuant to the requirements of
the USA PATRIOT Act (“Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other information that will allow Bank to identify the Borrower in
accordance with the Patriot Act.  The Borrower agrees to, promptly following a request by Bank, provide all such other documentation
and information that Bank requests in order to comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the Patriot Act.

 

		11.	MISCELLANEOUS.

 

		a.	Notices. Any demand or notice hereunder or under any applicable law pertaining hereto shall be
in writing and duly given if delivered to Borrower (at its address on the Bank’s records) or to the Bank (at the address on page
one and separately to the Bank officer responsible for Borrower’s relationship with the Bank). Such notice or demand shall be deemed
sufficiently given for all purposes when delivered (i) by personal delivery and shall be deemed effective when delivered, or (ii) by mail
or courier and shall be deemed effective three (3) business days after deposit in an official depository maintained by the United States
Post Office for the collection of mail or one (1) business day after delivery to a nationally recognized overnight courier service (e.g.,
Federal Express). Notice by e-mail is not valid notice under this or any other agreement between Borrower and the Bank.

 

		b.	Generally Accepted Accounting Principles. Any financial calculation to be made, all financial statements
and other financial information to be provided, and all books and records, system of accounting and reserves to be kept in connection
with the provisions of this Agreement, shall be in accordance with generally accepted accounting principles consistently applied during
each interval and from interval to interval; provided, however, that in the event changes in generally accepted accounting principles
shall be mandated by the Financial Accounting Standards Board or any similar accounting body of comparable standing, or should be recommended
by Borrower’s certified public accountants, to the extent such changes would affect any financial calculations to be made in connection
herewith, such changes shall be implemented in making such calculations only from and after such date as Borrower and the Bank shall have
amended this Agreement to the extent necessary to reflect such changes in the financial and other covenants to which such calculations
relate.

 

		c.	Indemnification. If after receipt of any payment of all, or any part of, the Obligations, the Bank
is, for any reason, compelled to surrender such payment to any person or entity because such payment is determined to be void or voidable
as a preference, an impermissible setoff, or a diversion of trust funds, or for any other reason, the Transaction Documents shall continue
in full force and the Borrower shall be liable, and shall indemnify and hold the Bank harmless for, the amount of such payment surrendered.
The provisions of this Section shall be and remain effective notwithstanding any contrary action which may have been taken by the Bank
in reliance upon such payment, and any such contrary action so taken shall be without prejudice to the Bank’s rights under the Transaction
Documents and shall be deemed to have been conditioned upon such payment having become final and irrevocable. The provisions of this Section shall
survive the termination of this Agreement and the Transaction Documents.

 

     

     

    

		d.	Further Assurances. The Borrower shall take, and cause its Subsidiaries and affiliates to take,
such action and execute and deliver to the Bank such additional documents, instruments, certificates, and agreements as the Bank may reasonably
request from time to time to effectuate the purposes of the Transaction Documents and the transactions contemplated thereby, including,
without limitation, causing any Subsidiary, affiliate, entity or series of entities it may create hereafter through merger, division or
otherwise, to execute agreements, in form and substance acceptable to the Bank, (i) assuming or guarantying the Borrower’s obligations
under this Agreement and all related agreements and (ii) pledging assets to the Bank to the same extent as the Borrower.

 

		e.	Cumulative Nature and Non-Exclusive Exercise of Rights and Remedies. All rights and remedies of
the Bank pursuant to this Agreement and the Transaction Documents shall be cumulative, and no such right or remedy shall be exclusive
of any other such right or remedy. In the event of any unreconcilable inconsistencies, this Agreement shall control. No single or partial
exercise by the Bank of any right or remedy pursuant to this Agreement or otherwise shall preclude any other or further exercise thereof,
or any exercise of any other such right or remedy, by the Bank.

 

		f.	Governing Law; Jurisdiction. This Agreement has been delivered to and accepted by the Bank and
will be deemed to be made in the State of New York. Except as otherwise provided under federal law, this Agreement will be interpreted
in accordance with the laws of the State of New York excluding its conflict of laws rules. BORROWER HEREBY IRREVOCABLY CONSENTS TO
THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE THE BANK MAINTAINS
A BRANCH AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWER’S ADDRESS SET FORTH ABOVE FOR
PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS AGREEMENT WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING
ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER
WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION. Borrower acknowledges and agrees that the venue provided
above is the most convenient forum for both the Bank and Borrower. Borrower waives any objection to venue and any objection based on a
more convenient forum in any action instituted under this Agreement.

 

		g.	Joint and Several; Successors and Assigns. If there is more than one Borrower, each of them shall
be jointly and severally liable for all amounts, which become due, and the performance of all obligations under this Agreement, and the
term “the Borrower” shall include each as well as all of them. This Agreement shall be binding upon the Borrower and upon
its heirs and legal representatives, its successors and assignees, and shall inure to the benefit of, and be enforceable by, the Bank,
its successors and assignees and each direct or indirect assignee or other transferee of any of the Obligations; provided, however, that
this Agreement may not be assigned by the Borrower without the prior written consent of the Bank.

 

		h.	Waivers; Changes in Writing. No failure or delay of the Bank in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance
of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.
The Borrower expressly disclaims any reliance on any course of dealing or usage of trade or oral representation of the Bank (including
representations to make loans to the Borrower) and agrees that none of the foregoing shall operate as a waiver of any right or remedy
of the Bank. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall
in any event be effective unless made specifically in writing by the Bank and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No modification to any provision of this Agreement shall be effective unless made
in writing in an agreement signed by the Borrower and the Bank.

 

		i.	Interpretation. Unless the context otherwise clearly requires, references to plural includes the
singular and references to the singular include the plural; references to “individual” shall mean a natural person and shall
include a natural person doing business under an assumed name (e.g., a “DBA”); the word “or” has the inclusive
meaning represented by the phrase “and/or”; the word “including”, “includes” and “include”
shall be deemed to be followed by the words “without limitation”; and captions or section headings are solely for convenience
and not part of the substance of this Agreement. Any representation, warranty, covenant or agreement herein shall survive execution and
delivery of this Agreement and shall be deemed continuous. Each provision of this Agreement shall be interpreted as consistent with existing
law and shall be deemed amended to the extent necessary to comply with any conflicting law. If any provision nevertheless is held invalid,
the other provisions shall remain in effect. The Borrower agrees that in any legal proceeding, a photocopy of this Agreement kept in the
Bank’s course of business may be admitted into evidence as an original.

 

     

     

    

		j.	Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.

 

		k.	Waiver of Jury Trial. The Borrower and the Bank hereby knowingly,
voluntarily, and intentionally waive any right to trial by jury the Borrower and the Bank may have in any action or proceeding, in law
or in equity, in connection with this Agreement or any transactions related hereto. The Borrower represents and warrants that no representative
or agent of the Bank has represented, expressly or otherwise, that the Bank will not, in the event of litigation, seek to enforce this
jury trial waiver. The Borrower acknowledges that the Bank has been induced to enter into this Agreement by, among other things, the provisions
of this Section.

 

This Sixth Amended Replacement and Restated
Credit Agreement is intended to supersede and fully replace the previous Fifth Amended Replacement and Restated Credit Agreement which
was executed by the parties hereto on June 25, 2021. This Sixth Amended Replacement and Restated Credit Agreement shall govern the Replacement
Term Note between Borrower and Bank in the principal amount of $29,000,000.00 dated November 30, 2017, the Multiple Disbursement Term
Note between Borrower and Bank in the principal amount of $3,600,000.00 dated August 15, 2018, the Multiple Disbursement
Term Note between Borrower and Bank in the principal amount of $3,127,000.00 dated June 27, 2019, the Multiple Disbursement Term Note
between Borrower and Bank in the principal amount of $3,178,000.00 dated August 31, 2020, the Replacement Revolving Line Note between
Borrower and Bank in the principal amount of $8,500,000.00 dated December 17, 2021, the Multiple Disbursement Term Note in the principal
amount of $4,665,000.00 dated June 25, 2021, the Multiple Disbursement Term Note in the principal amount of $150,000.00 dated June 25,
2021 and the Demand Note in the principal amount of $1,900,000.00 dated June 25, 2021, including extensions or modifications thereto.

 

 

Acknowledgment. Borrower acknowledges that
it has read and understands all the provisions of this Agreement, including the Governing Law, Jurisdiction and Waiver
of Jury Trial, and has been advised by counsel as necessary or appropriate.

 

	 	 	M&T BANK
	 	 	 	 
	 	 	By	 /s/ William Hoffmann
	Signature of Witness	 	 	 
	 	 	Name:	William
    Hoffmann 
	Typed Name of Witness	 	 	 
	 	 	Title:	Relationship
    Manager 
	 	 	 	 
	 	 	 	 
		 	CORNING NATURAL GAS CORPORATION
	 	 	 	 
	 	 	 	 
	 	 	By	 /s/ Charles Lenns
	Signature of Witness	 	 	 
	 	 	Name:	Charles
    Lenns
	Typed Name of Witness	 	 	 
	     	 	Title:	Vice
    President/Chief Financial Officer 

 

 

ACKNOWLEDGMENT

 

	STATE OF NEW YORK 	 )
	 	 : SS.
	COUNTY OF BROOME	 )

 

On the ______day of December in
the year 2021, before me, the undersigned, a Notary Public in and for said State, personally appeared WILLIAM HOFFMANN, personally
known to me or proved to me on the basis of satisfactory evidence to be the individual whose 

     

     

    

name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.

 

	 	 
	 	Notary Public

 

 

ACKNOWLEDGMENT

 

	STATE OF NEW YORK 	 )
	 	 : SS.
	COUNTY OF STEUBEN	 )

 

On the ________day of December
in the year 2021, before me, the undersigned, a Notary Public in and for said State, personally appeared CHARLES LENNS, personally
known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.

 

	 	 
	 	Notary Public

 

 

 

 

FOR BANK USE ONLY

 

	Authorization Confirmed:  	 
		SignatureGENERAL SECURITY AGREEMENT

New York

 

 

Debtor (Name): Corning Natural Gas Corporation

(Organizational Structure): Corporation 

(State Law organized under): New York 

(Organizational Identification Number, if any; note
that this is NOT a request for the Taxpayer Identification Number):

(Address of residence/chief executive office): 330
West William Street, Corning, New York 14830

 

Bank/Secured Party: M&T Bank, a New York
banking corporation with its banking offices at One M&T Plaza, Buffalo, New York 14203 Attention: Office of General Counsel.

 

For good and valuable consideration, the receipt and
sufficiency of which is acknowledged, and intending to be legally bound, Debtor agrees with Secured Party as follows:

 

1.       Security
Interests.

 

1.1       Grant.
As security for the prompt and complete payment and performance when due of all of the Obligations, Debtor does hereby grant to Secured
Party a continuing security interest (“Security Interest”) in all personal property and fixtures of Debtor, wherever located,
whether now existing or owned or hereafter arising or acquired, whether or not subject to the Uniform Commercial Code, as the same may
be in effect in the State of New York, as amended from time to time (“UCC”), and whether or not affixed to any realty, including,
without limitation, (i) all accounts, chattel paper, investment property, deposit accounts, documents, goods, equipment, farm products,
general intangibles (including trademarks, service marks, trade names, patents, copyrights, licenses and franchises), instruments, inventory,
money, letter of credit rights, causes of action (including tort claims) and other personal property (including agreements and instruments
not constituting chattel paper or a document, general intangible or instrument); (ii) all additions to, accessions to, substitutions for,
replacements of and supporting obligations of the foregoing; (iii) all proceeds, products, rents, issues, profits and accounts arising
from the foregoing and substitutions therefore, including, without limitation, insurance proceeds; and (iv) all business records and information
relating to any of the foregoing and any software or other programs for accessing and manipulating such information and (v) all rights,
tangible and intangible (including pipelines, easements, rights of way and compressors) in the Debtor’s gas distribution system
pursuant to municipal franchise or otherwise (collectively, the “Collateral”). Debtor acknowledges and agrees that the foregoing
collateral description is intended to cover all assets of Debtor.

 

If, now or in the
future, any of the obligations secured pursuant to any security interest or lien created by this instrument include any Special Flood
Zone Loan, then the following shall apply: any such Special Flood Zone Loan shall not be secured pursuant to any security interest
or lien created by this instrument in personal property that would constitute "contents" located within Flood Zone Improvements
securing such Special Flood Zone Loan, where, for purposes of the foregoing, "Flood Zone Improvements" means any "improved"
real property that is located within a Special Flood Hazard Area, a "Special Flood Zone Loan" means a loan, line of credit or
other credit facility which is secured by Flood Zone Improvements, and
the terms "improved" real property, "Special Flood Hazard Area," and "contents" shall have the meaning ascribed
to them by the Flood Disaster Protection Act of 1973, 42 U.S.C.
§ 4001 et seq., and implementing regulations, 44 C.F.R. Parts 59 et seq., and/or the Federal
Emergency Management Agency, all as may be amended from time to time.

 

1.2       Obligations. The term
“Obligations” means any and all indebtedness or other obligations of Debtor to Secured Party in any capacity, now existing
or hereafter incurred, however created or evidenced, regardless of kind, class or form, whether direct, indirect, absolute or contingent
(including obligations pursuant to any guaranty, endorsement, other assurance of payment or otherwise), whether joint or several, whether
from time to time reduced and thereafter increased, or entirely extinguished and thereafter reincurred, together with all extensions,
renewals and replacements thereof, and all interest, fees, charges, costs or expenses which accrue on or in connection with the foregoing,
including, without limitation, any indebtedness or obligations (i) not yet outstanding but contracted for, or with regard to which any
other commitment by Secured Party exists; (ii) arising prior to, during or after any pendency of any bankruptcy, insolvency, receivership
or other similar proceeding, regardless of whether allowed or allowable in such proceeding; (iii) owed by Debtor to others and which Secured
Party obtained, or may obtain, by assignment or otherwise; or (iv) payable under this Agreement, or (v) any amounts now or hereafter
due and owing from Debtor to Bank arising from or in connection with any interest rate swap agreement, now existing or hereafter entered
into between Debtor and Bank, and any costs incurred by bank in connection therewith, including without limitation, any interest, expenses,
fees, penalties or other charges associated with any obligations undertaken by Bank to hedge or offset Bank’s obligations pursuant
to such swap agreement, or the termination of any such obligations, shall be (i) deemed additional interest and/or a related expense (to
be determined in the sole discretion of Bank) due in connection with the principal amount of the Obligation secured by this General Security
Agreement to the full extent thereof, and included in any judgment in any proceeding instituted by Bank or its agents against Debtor for
enforcement of this General Security Agreement of otherwise.

 

    1 

     

    

2.       Covenants.
Debtor covenants and agrees as follows:

 

2.1       Perfection
of Security Interest. Debtor shall execute and deliver to Secured Party such financing statements, control agreements or other documents,
in form and content satisfactory to Secured Party, as Secured Party may from time to time request to perfect and continue the Security
Interest. Upon the request of Secured Party, Debtor shall deliver to Secured Party any and all instruments, chattel paper, negotiable
documents or other documents evidencing or constituting any part of the Collateral properly endorsed or assigned, in a manner satisfactory
to Secured Party. Until such delivery, Debtor shall hold such portion of the Collateral in trust for Secured Party. Debtor shall pay all
expenses for the preparation, filing, searches and related costs in connection with the grant and perfection of the Security Interest.
Debtor authorizes (both prospectively and retroactively) Secured Party to file financing statements, and any continuations and amendments
thereof, with respect to the Collateral without Debtor’s signature. A photocopy or other reproduction of any financing statement
or this Agreement shall be sufficient as a financing statement for filing in any jurisdiction.

 

2.2       Negative
Pledge; Disposition of Collateral. Debtor shall not grant or allow the imposition of any lien, security interest or encumbrance on,
or assignment of, the Collateral unless consented to in writing by Secured Party. Debtor shall not make or permit to be made any sale,
transfer or other disposition of the Collateral; provided, however, prior to the occurrence of an Event of Default, Debtor may in the
ordinary course of business consistent with its past practices and with prudent and standard practices used in the industry that is the
same or similar to that in which Debtor is engaged: (i) dispose of any Collateral consisting of equipment that is obsolete or worn-out;
(ii) sell or exchange any Collateral consisting of equipment in connection with the acquisition of other equipment that is at least as
valuable as such equipment, that Debtor intends to use for substantially the same purposes as such equipment and that is not subject to
any security interest or other lien or encumbrance; (iii) collect Collateral consisting of accounts or assign such Collateral for purposes
of collection; or (iv) sell or lease Collateral consisting of inventory. A sale, lease or other transfer of such Collateral consisting
of inventory in the ordinary course of Debtor’s business does not include a transfer in partial or complete satisfaction of any
liability or obligation or any bulk sale.

 

2.3       Condition
of Collateral; Impermissible Use. Debtor shall keep the Collateral consisting of goods in good condition and shall not commit or permit
damage or destruction (other than ordinary wear and tear) to such Collateral. Debtor shall not permit any Collateral consisting of goods
(i) to be used in such a manner that would violate any insurance policy or warranty covering the Collateral or that would violate any
applicable law of any governmental authority (including any environmental law) now or hereafter in effect; (ii) to become fixtures on
any real property on which Secured Party does not have a first priority mortgage lien (unless Secured Party has been provided with an
acceptable landlord/mortgagee waiver) or become an accession to any goods not included in the Collateral; or (iii) to be placed in any
warehouse that may issue a negotiable document with regard to such Collateral.

 

2.4       Modification
to Collateral. Debtor shall not, without Secured Party’s prior written consent, grant any extension on, compound, settle for
less than the full amount of, release (in whole or in part), modify, cancel, or allow for any substitution, credit or adjustment on Collateral
consisting of accounts, chattel paper, general intangibles, instruments, documents or investment property, except that in the absence
of an Event of Default, Debtor may grant to account debtors, or other persons obligated with respect to the Collateral, extensions, credits,
discounts, compromises or settlements in the ordinary course of business consistent with its past practices and consistent with prudent
and standard practices used in the industries that are the same or similar to those in which Debtor is engaged.

 

2.5       Titled
Goods. Debtor shall cause all goods included in the Collateral to be properly titled and registered to the extent required by applicable
law. Upon the request of Secured Party, Debtor shall cause the interest of Secured Party to be properly indicated on any certificate of
title relating to such goods and deliver to Secured Party each such certificate, and any additional evidence of ownership, certificates
of origin or other documents evidencing any interest in such goods.

 

2.6       Insurance.
Debtor shall, at its own expense and at all times, maintain effective insurance policies covering damage to persons and against fire,
flood, theft and all other risks to which the Collateral may be subject, all in such amounts, with such deductibles and issued by such
insurance company as shall be satisfactory to Secured Party. Such insurance policies shall have all endorsements that Secured Party may
require and shall further (i) name Secured Party, exclusively, as the additional insured on the casualty insurance and the lender’s
loss payee and/or mortgagee on the hazard insurance; (ii) provide that Secured Party shall receive a minimum of thirty (30) days prior
written notice of any amendment or cancellation; and (iii) insure Secured Party notwithstanding any act or neglect of Debtor or other
owner of the property described in such insurance. If Debtor fails to obtain the required insurance as provided herein, Secured Party
may, but is not obligated, to obtain such insurance as Secured Party may deem appropriate, including, without limitation, if Secured Party
so chooses, “single interest insurance” which will cover only Secured Party’s interest in the Collateral. Debtor shall
pay or reimburse to Secured Party the cost of such insurance. Secured Party shall have the option, in its sole discretion, to hold insurance
proceeds as part of the Collateral, apply any insurance proceeds toward the Obligations or allow the Debtor to apply the insurance proceeds
towards repair or replacement of the item of Collateral in respect of which such proceeds were received. Upon the request of Secured Party,
Debtor shall from time to time deliver to Secured Party such insurance policies, or other evidence of such policies satisfactory to Secured
Party, and such other related information Secured Party may request.

 

2.7       Collateral
Information. Debtor shall provide all information, in form and substance satisfactory to Secured Party, that Secured Party shall from
time to time request to (i) identify the nature, extent, value, age and location of any of the Collateral, or (ii) identify any account
debtor or other party obligated with respect to any chattel paper, general intangible, instrument, investment property, document or deposit
account included in the Collateral.

 

2.8       Financial
Information. Debtor shall furnish to Secured Party financial statements in such form (e.g., audited, reviewed, compiled) and
at such intervals as Secured Party shall request from time to time plus any additional financial information that Secured Party may request.
All such financial statements shall be in conformity with generally accepted accounting principles consistently applied.

    2 

     

    

2.9       Taxes;
Licenses; Compliance with Laws. Before the end of any applicable grace period, Debtor shall pay each tax, assessment, fee and charge
imposed by any governmental authority upon the Collateral, the ownership, disposition or use of any of the Collateral, this Agreement
or any instrument evidencing any of the Obligations. Debtor shall maintain in full force and effect each license, franchise or other authorization
needed for any ownership, disposition or use of the Collateral and the conduct of its business, operations or affairs. Debtor shall comply
with all applicable law of any governmental authority (including any environmental law), now or hereafter in effect, applicable to the
ownership, disposition or use of the Collateral or the conduct of its business, operations or affairs.

 

2.10       Records;
Legend. Debtor shall maintain accurate and complete books and records relating to the Collateral in conformity with generally accepted
accounting principles consistently applied. At Secured Party’s request, Debtor will legend, in form and manner satisfactory to Secured
Party, its books and records to indicate the Security Interest.

 

2.11       Additional
Collateral. If at any time the liquidation value of any of the Collateral is unsatisfactory to Secured Party, then, on demand of Secured
Party, Debtor shall immediately (i) furnish such additional collateral satisfactory to Secured Party to be held by Secured Party as if
originally pledged hereunder and execute such additional security agreements, financing statements or other agreements as requested by
Secured Party, or (ii) repay the Obligations to bring the outstanding amount of the Obligations to within a satisfactory relationship
to the liquidation value of the Collateral.

 

2.12       Debtor
Notices. Immediately upon acquiring knowledge or reason to know of any of the following, Debtor shall notify Secured Party of the
occurrence or existence of (i) any Event of Default; (ii) any event or condition that, after notice, lapse of time or after both notice
and lapse of time, would constitute an Event of Default; (iii) any account or general intangible that arises out of a contract with any
governmental authority (including the United States); (iv) any event or condition that has or (so far as can be foreseen) will or might
have any material adverse effect on the Collateral (including a material loss, destruction or theft of, or of any damage to, the Collateral,
material decline in value of the Collateral or a material default by an account debtor or other party’s performance of obligations
with respect to the Collateral), on Debtor or its business, operations, affairs or condition (financial or otherwise).

 

2.13       Lien
Law. If any account or general intangible included in the Collateral represents money owing pursuant to any contract for the improvement
of real property or for a public improvement for purposes of the Lien Law of the State of New York (the “Lien Law”), Debtor
shall (i) give Secured Party notice of such fact; (ii) receive and hold any money advanced by Secured Party with respect to such account
or general intangible as a trust fund to be first applied to the payment of trust claims as such term and/or concept is defined in the
Lien Law (in Section 71 thereof, or otherwise); and (iii) until such trust claim is paid, not use or permit the use of any such money
for any purpose other than the payment of such trust claims.

 

2.14       Protection
of Collateral; Further Assurances. Debtor shall, at its own cost, faithfully preserve, defend and protect the Security Interest as
a prior perfected security interest in the Collateral under the UCC and other applicable law, superior and prior to the rights of all
third parties (other than those permitted pursuant to Section 3.1) and shall defend the Collateral against all setoffs, claims, counterclaims,
demands and defenses. Debtor shall, and shall cause its affiliates to take such action and execute and deliver to the Secured Party such
additional documents, instruments, certificates, and agreements as the Secured Party may reasonably request from time to time to effectuate
the purposes and intent of the transaction(s) contemplated hereby, including, without limitation, (i) to attach, continue, preserve, perfect
or protect the Security Interest and Secured Party’s interests in the Collateral and rights hereunder, including obtaining waivers
(in form and content acceptable to Secured Party) from landlords, warehousemen and mortgagees and (ii) causing any affiliate, entity or
series of entities it may create hereafter through merger, division or otherwise, to execute agreements, in form and substance acceptable
to Secured Party, (a) assuming or guarantying the Debtor’s obligations under this Agreement and all related agreements and (b) pledging
assets to the Secured Party to the same extent as the Debtor. Debtor hereby irrevocably appoints Secured Party, its officers, employees
and agents, or any of them, as attorneys-in-fact for Debtor with full power and authority in the place and stead of Debtor and in the
name of Debtor or its own name from time to time in Secured Party’s discretion, to perform all acts which Secured Party deems appropriate
to attach, continue, preserve or perfect and continue the Security Interest, including signing for Debtor (to the extent such signature
may be required by applicable law) UCC-1 financing statements, UCC-3 amendment or other instruments and documents to accomplish the purposes
of this Agreement. This power of attorney, being coupled with an interest, is irrevocable and shall not be affected by the subsequent
disability or incompetence of Debtor.

 

3.       Representations
and Warranties. Debtor represents, warrants and agrees as follows:

 

3.1       Title.
Debtor holds good and marketable title to the Collateral free and clear from any security interest or other lien or encumbrance of any
party, other than the Security Interest or such liens, security interests or other liens or encumbrances specifically permitted by Secured
Party and set forth on Exhibit A hereto (“Permitted Liens”). Debtor has not made any prior sale, pledge, encumbrance, assignment
or other disposition of any of the Collateral except for the Permitted Liens.

 

3.2       Authority.
If Debtor is a business entity, it is duly organized, validly existing and in good standing under the laws of the above-named state of
organization. Debtor has the full power and authority to grant the Security Interest and to execute, deliver and perform its obligations
in accordance with this Agreement. The execution and delivery of this Agreement will not (i) violate any applicable law of any governmental
authority or any judgment or order of any court, other governmental authority or arbitrator; (ii) violate any agreement governing Debtor
or to which Debtor is a party; or (iii) result in a security interest or other lien or encumbrance on any of Debtor’s assets, except
in favor of Secured Party. Debtor’s certificate of incorporation, by-laws or other organizational documents do not prohibit any
term or condition of this Agreement. Each authorization, approval or consent from, each registration and filing with, each declaration
and notice to, and each other act by or relating to, any party required as a condition of Debtor’s execution, delivery or performance
of this Agreement (including any shareholder or board of directors or similar approvals) has been duly obtained and is in full force and
effect. Debtor has the power and authority to transact the business in which it is engaged and is duly licensed or qualified and in good
standing in each jurisdiction in which the conduct of its business or ownership of property requires such licensing or such qualifications.

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3.3       Judgments
and Litigation. There is no pending or threatened claim, audit, investigation, action or other legal proceeding or judgment or order
of any court, agency or other governmental authority or arbitrator which involves Debtor or the Collateral and which might have a material
adverse effect upon the Collateral, the Debtor, its business, operations, affairs or condition (financial or otherwise), or threaten the
validity of this Agreement or any related document or action. Debtor will immediately notify Secured Party upon acquiring knowledge of
the foregoing.

 

3.4       Enforceability
of Collateral. Instruments, chattel paper, accounts or documents which constitute any part of the Collateral are genuine and enforceable
in accordance with their terms, comply with the applicable law of any governmental authority concerning form, content, manner of preparation
and execution, and all persons appearing to be obligated on such Collateral have authority and capacity to contract and are in fact obligated
as they appear to be on such Collateral. There are no restrictions on any assignment or other transfer or grant of the Security Interest
by Debtor. Each sum represented by Debtor from time to time as owing on accounts, instruments, deposit accounts, chattel paper and general
intangibles constituting any part of the Collateral by account debtors and other parties with respect to such Collateral is the sum actually
and unconditionally owing by account debtors and other parties with respect thereto at such time, except for applicable normal cash discounts.
None of the Collateral is subject to any defense, set-off, claim or counterclaim of a material nature against Debtor except as to which
Debtor has notified Secured Party in writing.

 

3.5       Location
of Chief Executive Office, Records, Collateral. The locations of the following are listed on page one of this Agreement or, if different
or additional, on Exhibit A hereto: (i) Debtor’s residence, principal place of business and chief executive office; (ii) the office
in which Debtor maintains its books or records relating to the Collateral; (iii) the facility (including any storage facility) at which
now owned or subsequently acquired inventory, equipment, goods, fixtures and other tangible personal property constituting any part of
the Collateral shall be kept; and (iv) the real property on which any crop included in the Collateral is growing or is to be grown, or
on which any timber constituting any part of the Collateral is or is to be standing. Debtor will not effect or permit any change in any
of the foregoing locations (or remove or permit the removal of the records or Collateral therefrom, except for mobile equipment included
in the Collateral which may be moved to another location for not more than thirty (30) days) without thirty (30) days prior written notice
to Secured Party and all actions deemed necessary by Secured Party to maintain the Security Interest intended to be granted hereby at
all times fully perfected and in full force and effect have been taken. All of the locations listed on page one or Exhibit A are owned
by Debtor, or if not, by the party(ies) identified on Exhibit A.

 

3.6       Structure;
Name. Debtor’s organizational structure, state of registration and organizational identification number (if any) are stated
accurately on page one of this Agreement, and its full legal name and any trade name used to identify it are stated accurately on page
one of this Agreement, or if different or additional are listed on Exhibit A hereto. Debtor will not change its name, any trade names
or its identity, its organizational structure, state of registration or organizational identification number without thirty (30) days
prior written notice to Secured Party. All actions deemed necessary by Secured Party to maintain the Security Interest intended to be
granted hereby at all times fully perfected and in full force and effect have been taken.

 

4.       Performance
and Expenditures by Secured Party. If Debtor fails to perform or comply with any of the terms hereof, Secured Party, at its option,
but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such terms including the
payment or discharge of all taxes, fees, security interest or other liens, encumbrances or claims, at any time levied or placed on the
Collateral. An election to make expenditures or to take action or perform an obligation of Debtor under this Agreement, after Debtor’s
failure to perform, shall not affect Secured Party’s right to declare an Event of Default and to exercise its remedies. Nor shall
the provisions of this Section relieve Debtor of any of its obligations hereunder with respect to the Collateral or impose any obligation
on Secured Party to proceed in any particular manner with respect to the Collateral. Interest on any judgment entered against Debtor related
to this Agreement shall accrue at the highest default rate specified in any instrument evidencing any of the Obligations.

 

5.       Duty
of Secured Party. Secured Party’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral
in its possession shall be to deal with it in the same manner as Secured Party deals with similar property for its own account. Neither
Secured Party nor its directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon the Collateral
or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of the Collateral upon the request of Debtor
or any other person or to take any other action whatsoever with regard to the Collateral. The powers conferred on Secured Party hereunder
are solely to protect Secured Party’s interests in the Collateral and shall not impose any duty upon any Secured Party to exercise
any such powers. Secured Party shall be accountable only for amounts that it actually receives as a result of the exercise of its powers
under this Agreement, and neither it nor its officers, directors, employees or agents shall be responsible to Debtor for any act or failure
to act hereunder, except for its own gross negligence or willful misconduct.

 

6.       Certain
Rights and Remedies.

 

6.1       Inspection;
Verification. Secured Party, and such persons as it may designate, shall have the right from time to time to (i) audit and inspect
(a) the Collateral, (b) all books and records related thereto (and make extracts and copies from such records), and (c) the premises upon
which any of the Collateral or books and records may be located; (ii) discuss Debtor’s business, operations, affairs or condition
(financial or otherwise) with its officers, accountants; and (iii) verify the validity, amount, quality, quantity, value, condition and
status of, or any other matter relating to the Collateral in any manner and through any medium Secured Party may consider appropriate
(including contacting account debtors or third party possessing the Collateral for purpose of making such verification). Debtor shall
furnish all assistance and information and perform any acts Secured Party may require regarding thereto. Debtor shall bear the cost and
expense of any such inspection and verification.

 

6.2       Notification
of Security Interest. Secured Party may notify any or all account debtors and other person obligated with respect to the Collateral
of the Security Interest therein. Upon the request of Secured Party, Debtor agrees to enter into such warehousing, lockbox or other custodial
arrangement with respect to any of the Collateral that Secured Party shall deem necessary or desirable.

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6.3       Application
of Proceeds. Secured Party may apply the proceeds from the sale, lease or other disposition or realization upon the Collateral to
the Obligations in such order and manner and at such time as Secured Party shall, in its sole discretion, determine. Debtor shall remain
liable for any deficiency if the proceeds of any sale, lease or other disposition or realization upon the Collateral are insufficient
to pay the Obligations. Any proceeds received by Debtor from the Collateral after an Event of Default shall (i) be held by Debtor in trust
for Secured Party in the same medium in which received; (ii) not be commingled with any assets of Debtor; and (iii) be delivered to Secured
Party in the form received, properly indorsed to permit collection. After an Event of Default, Debtor shall promptly notify Secured Party
of the return to or repossession by Debtor of goods constituting part of the Collateral, and Debtor shall hold the same in trust for Secured
Party and shall dispose of the same as Secured Party directs.

 

6.4       Income
and Proceeds of Instruments and Investment Property. Until the occurrence of an Event of Default, Debtor reserves the right to request
to receive all cash income or cash distribution (whether in cash or evidenced by check) payable on account of any instrument or investment
property constituting part of the Collateral (collectively, “Cash Distribution”). Until actually paid, all rights in the foregoing
shall remain subject to the Security Interest. Any other income, dividend, distribution, increase in or profits (including any stock issued
as a result of any stock split or dividend, any capital distributions and the like) on account of any instrument or investment property
constituting part of the Collateral and, upon the occurrence of an Event of Default, all Cash Distributions, shall be delivered to Secured
Party immediately upon receipt, in the exact form received and without commingling with other property which may be received by, paid
or delivered to Debtor or for Debtor’s account, whether as an addition to, in discharge of, in substitution of, or in exchange of
the Collateral. Until delivery, such Collateral shall be held in trust for Secured Party.

 

6.5       Registered
Holder of the Collateral. Secured Party shall have the right to transfer to or register (with or without reference to this Agreement)
in the name of Secured Party or its nominee any investment property, general intangible, instrument or deposit account constituting part
of the Collateral so that Secured Party or such nominee shall appear as the sole owner of record thereof; provided, however, that so long
as no Event of Default has occurred, Secured Party shall deliver to Debtor all notices, statements or other communications received by
it or its nominee as such registered owner, and upon demand and receipt of payment of necessary expenses thereof, shall give to Debtor
or its designee a proxy or proxies to vote and take all action with respect to such Collateral. After the occurrence of any Event of Default,
Debtor waives all rights to be advised of or to receive any notices, statements or communications received by Secured Party or its nominee
as such record owner, and agrees that no proxy or proxies given by Secured Party to Debtor or its designee as aforesaid shall thereafter
be effective.

 

7.       Default.

 

7.1       Events
of Default. Any of the following events or conditions shall constitute an “Event of Default”: (i) failure by the Debtor
to pay when due (whether at the stated maturity, by acceleration or otherwise) the Obligations, or any part thereof, or there occurs any
event or condition which after notice, lapse of time or both will permit acceleration of any Obligation; (ii) Debtor defaults in the performance
of any obligation, condition, covenant or other provision of this Agreement, the other Transaction Documents or any other agreement with
the Secured Party or any of its affiliates or subsidiaries (collectively, “Affiliates”); (iii) failure by the Debtor to pay
when due (whether at the stated maturity, by acceleration, upon demand or otherwise) any indebtedness or obligation owing to any third
party or Affiliate or the occurrence of any event which could result in acceleration of payment of any such indebtedness or the failure
to perform any agreement with any third party or Affiliate; (iv) the sale, assignment transfer or delivery, by operation of law or otherwise,
of all or substantially all of the assets of the Debtor or the ownership interest in Debtor to a third party; (v) a non-individual
Debtor, without the Secured Party’s prior written consent, engages in, agrees to or approves a plan for (a) reorganization (b) merger
or consolidation, (c) division into (or of) one or more entities or series of entities or allocation or transfer of any of Debtor’s
assets or liabilities as a result of such a division, (d) conversion to another form of business entity, or (e) dissolution of Debtor
or cessation by Debtor as a going business concern; (vi) the death or judicial declaration of incompetency of Debtor, if an individual;
(vii) failure by Debtor to pay, withhold or collect any tax as required by law; the service or filing against Debtor or any of its assets
of any lien (other than a lien permitted in writing by the Secured Party), judgment, garnishment, order or award which Secured Party
in good faith determines shall have a material adverse effect on the Debtor or the Debtor’s ability to pay or perform the Obligations;
(viii) if Debtor becomes insolvent or is generally not paying its debts as such debts become due; (ix) the making of any general assignment
by Debtor for the benefit of creditors; the appointment of a receiver or similar trustee for Debtor or its assets; or the making of any,
or sending notice of any intended, bulk sale; (x) Debtor commences (or has commenced against it and not dismissed or stayed within forty-five
(45) days) any proceeding or request for relief under any bankruptcy, insolvency or similar laws now or hereafter in effect in the United
States of America or any state or territory thereof or any foreign jurisdiction or any formal or informal proceeding for the dissolution
or liquidation of, settlement of claims against or winding up of affairs of Debtor; (xi) any representation or warranty made in this Agreement,
any other Transaction Documents, any related document, any other agreement between Debtor and the Secured Party or any Affiliate or in
any financial statement of Debtor or elsewhere was misleading in any material respect when made; Debtor omits to state a material fact
necessary to make the statements made in this Agreement, any other Transaction Document, any related document, any other agreement between
Debtor and the Secured Party or any Affiliate or any financial statement of Debtor or elsewhere not misleading in light of the circumstances
in which they were made; or, if upon the date of execution of this Agreement, there shall have been any material adverse change in any
of the facts disclosed in any financial statement, representation, warranty or elsewhere that was not disclosed in writing to the Secured
Party at or prior to the time of execution hereof; (xii) any pension plan of Debtor fails to comply with applicable law or has vested
unfunded liabilities that, in the opinion of the Secured Party, might have a material adverse effect on Debtor’s ability to repay
its debts; (xiii) an adverse change in the Debtor, its business, assets, operations, management, ownership, affairs or condition (financial
or otherwise) or the Secured Party’s collateral from the status shown on any financial statement or other document submitted to
the Secured Party or any Affiliate, and which change the Secured Party determines will have a material adverse effect on (a) the Secured
Party’s collateral, the Debtor, its business, assets, operations or condition (financial or otherwise), or (b) the ability of the
Debtor to pay or perform any obligation to the Secured Party; (xiv) any indication or evidence received by the Secured Party that the
Debtor may have directly or indirectly engaged in any type of activity which, in the Secured Party’s discretion, might result in
the forfeiture of any property of the Debtor to any governmental authority; (xv) the occurrence of any event described in sub-paragraph
(i) through and including (xiv) hereof with respect to any Subsidiary, endorser, guarantor or any other party liable for, or whose assets
or any interest therein secures, payment of any of the Obligations; (xvi) Debtor fails to supply new or additional collateral within ten
(10) days of request by the Secured Party; or (xvii) the Secured Party in good faith deems itself insecure with respect to payment or
performance of the Obligations.

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7.2       Rights
and Remedies Upon Default. Upon the occurrence of any Event of Default, Secured Party without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice required by law) to or upon Debtor or any other person (all
and each of which demands, presentments, protests, advertisements and notices are hereby waived), may exercise all rights and remedies
of a secured party under the UCC, under other applicable law, in equity or otherwise or available under in this Agreement including:

 

7.2.1       Obligations
Immediately Due; Termination of Lending. Secured Party may declare all or any part of any Obligations not payable on demand to be
immediately due and payable without demand or notice of any kind. All or any part of any Obligations whether or not payable on demand,
shall be immediately due and payable automatically upon the occurrence of an Event of Default in Section 7.1 (ix) or (x) above. The provisions
hereof are not intended in any way to affect any rights of Secured Party with respect to any Obligations which may now or hereafter be
payable on demand. Secured Party may terminate any obligation it may have to grant any additional loan, credit or other financial accommodation
to Debtor.

 

7.2.2       Access
to Collateral. Secured Party, or its agents, may peaceably retake possession of the Collateral with or without notice or process of
law, and for that purpose may enter upon any premises where the Collateral is located and remove the same. At Secured Party’s request,
Debtor shall assemble the Collateral and deliver it to Secured Party or any place designated by Secured Party, at Debtor’s expense.

 

7.2.3       Sell
Collateral. Secured Party shall have the right to sell, lease or otherwise dispose of the Collateral in one or more parcels at public
or private sale or sales upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. Each purchaser at any such sale shall hold the property sold absolutely,
free from any claim or right on the part of Debtor. Debtor hereby waives (to the extent permitted by law) all rights of redemption, stay
and appraisal which Debtor now has or may at any time in the future have under any applicable law now existing or hereafter enacted. Secured
Party shall have the right to use Debtor’s premises and any materials or rights of Debtor (including any intellectual property rights)
without charge for such sales or disposition of the Collateral or the completion of any work in progress for such times as Secured Party
may see fit. Without in any way requiring notice to be given in the following time and manner, Debtor agrees that with respect to any
notice by Secured Party of any sale, lease or other disposition or realization or other intended action hereunder or in connection herewith,
whether required by the UCC or otherwise, such notice shall be deemed reasonable and proper if given at least five (5) days before such
action in the manner described below in the Section entitled “Notices”.

 

7.2.4       Collect
Revenues. Secured Party may either directly or through a receiver (i) demand, collect and sue on any Collateral consisting of accounts
or any other Collateral including notifying account debtors or any other persons obligated on the Collateral to make payment on the Collateral
directly to Secured Party; (ii) file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by Secured Party with respect to the Collateral or to enforce any other right in respect of the Collateral; (iii) take control,
in any manner, of any payment or proceeds from the Collateral; (iv) prosecute or defend any suit, action or proceeding brought against
Debtor with respect to the Collateral; (v) settle, compromise or adjust any and all claims arising under the Collateral or, to give such
discharges or releases as Secured Party may deem appropriate; (vi) receive and collect all mail addressed to Debtor, direct the place
of delivery thereof to any location designated by Secured Party; to open such mail; to remove all contents therefrom; to retain all contents
thereof constituting or relating to the Collateral; (vii) execute, sign or endorse any and all claims, endorsements, assignments, checks
or other instruments with respect to the Collateral; or (viii) generally, use, sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral; and Debtor hereby irrevocably appoints Secured Party, its officers, employees and agents,
or any of them, as attorneys-in-fact for Debtor with full power and authority in the place and stead of Debtor and in the name of Debtor
or in its own name from time to time in Secured Party’s discretion, to take any and all appropriate action Secured Party deems necessary
or desirable to accomplish any of the foregoing or otherwise to protect, preserve, collect or realize upon the Collateral or to accomplish
the purposes of this Agreement. Debtor revokes each power of attorney (including any proxy) heretofore granted by Debtor with regard to
the Collateral. This power of attorney, being coupled with an interest, is irrevocable and shall not be affected by the subsequent disability
or incompetence of Debtor.

 

7.2.5       Setoff.
Secured Party may place an administrative hold on and set off against the Obligations any property held in a deposit or other account
with Secured Party or any of its Affiliates or otherwise owing by Secured Party or any of its Affiliates in any capacity to Debtor. Such
set-off shall be deemed to have been exercised immediately at the time Secured Party or such Affiliate elects to do so.

 

7.2.6       Appointment
of Receiver. Secured Party, upon occurrence of an Event of Default, shall be entitled, and Debtor hereby consents, without notice
or demand and without regard to the adequacy of any security for the indebtedness and other Obligations or the solvency or insolvency
of any person liable for the payment thereof, to the appointment of a receiver for the Collateral. The receiver shall have all rights
and powers permitted under applicable law and such other powers as the court making such appointment shall confer. The expenses, including,
without limitation, receiver’s fees, attorneys’ fees, court costs, and agent’s compensation, incurred pursuant to or
arising from the powers herein contained shall be secured by the Collateral. The right of a receiver, among other rights and powers, to
enter and take possession of and to manage and operate the Collateral, and to collect the rents, issues, profits and proceeds thereof
shall be cumulative to any other rights or remedies hereunder or afforded by law, and may be exercised concurrently therewith or independently
thereof. Notwithstanding the appointment of any receiver or other custodian, Secured Party shall be entitled as pledgee to the possession
and control of any cash, deposits, or instruments or other Collateral at the time held by, or payable or deliverable under the terms of
this Agreement to Secured Party.

 

8.       Expenses.
Debtor shall pay to Secured Party on demand all costs and expenses (including all reasonable fees and disbursements of all counsel retained
for advice, suit, appeal or other proceedings or purpose and of any experts or agents it may retain), which Secured Party may incur in
connection with (i) the administration of this Agreement, including any administrative fees Secured Party may impose for the preparation
of discharges, releases or assignments to third-parties; (ii) the custody or preservation of, or the sale, lease or other disposition
or realization on the Collateral; (iii) the enforcement and collection of any Obligations or any guaranty thereof; (iv) the exercise,
performance, enforcement or protection 

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of any of the rights of Secured Party hereunder; or (v) the failure of Debtor to perform or observe
any provisions hereof. After such demand for payment of any cost, expense or fee under this Section or elsewhere under this Agreement,
Debtor shall pay interest at the highest default rate specified in any instrument evidencing any of the Obligations from the date payment
is demanded by Secured Party to the date reimbursed by Debtor. All such costs, expenses or fees under this Agreement shall be added to
the Obligations.

 

9.       Indemnification.
Debtor shall indemnify Secured Party and its Affiliates and each officer, employee, accountant, attorney and other agent thereof (each
such person being an “Indemnified Party”) on demand, without any limitation as to amount, against each liability, cost and
expense (including all reasonable fees and disbursements of all counsel retained for advice, suit, appeal or other proceedings or purpose,
and of any expert or agents an Indemnified Party may retain) heretofore or hereafter imposed on, incurred by or asserted against any Indemnified
Party (including any claim involving any allegation of any violation of applicable law of any governmental authority (including any environmental
law or criminal law)), however asserted and whether now existing or hereafter arising, arising out of any ownership, disposition or use
of any of the Collateral; provided, however, the foregoing indemnity shall not apply to liability, cost or expense solely attributable
to an Indemnified Party’s gross negligence or willful misconduct. This indemnity agreement shall survive the termination of this
Agreement. Any amounts payable under this or any other section of this Agreement shall be additional Obligations secured hereby.

 

10.       USA
PATRIOT Act Notice. Secured Party hereby notifies the Debtor that pursuant to the requirements of the USA PATRIOT Act (“Patriot
Act”), it is required to obtain, verify and record information that identifies the Debtor, which information includes the name and
address of the Debtor and other information that will allow Secured Party to identify the Debtor in accordance with the Patriot Act. 
The Debtor agrees to, promptly following a request by Secured Party, provide all such other documentation and information that Secured
Party requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering
rules and regulations, including the Patriot Act.

 

11.       Miscellaneous.

 

11.1       Notices.
Any demand or notice hereunder or under any applicable law pertaining hereto shall be in writing and duly given if delivered to Debtor
(at its address on Secured Party’s records) or to Secured Party (at the address on page one and separately to Secured Party’s
officer responsible for Debtor’s relationship with Secured Party). Such notice or demand shall be deemed sufficiently given for
all purposes when delivered (i) by personal delivery and shall be deemed effective when delivered, or (ii) by mail or courier and shall
be deemed effective three (3) business days after deposit in an official depository maintained by the United States Post Office for the
collection of mail or one (1) business day after delivery to a nationally recognized overnight courier service (e.g., Federal Express).
Notice by e-mail is not valid notice under this or any other agreement between Debtor and Secured Party.

 

11.2       Governing
Law; Jurisdiction. This Agreement has been delivered to and accepted by Secured Party and will be deemed to be made in the State of
New York. Except as otherwise provided under federal law, this Agreement will be interpreted in accordance with the laws of the State
of New York excluding its conflict of laws rules. DEBTOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE SECURED PARTY MAINTAINS A BRANCH AND CONSENTS THAT SECURED
PARTY MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT DEBTOR’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED
THAT NOTHING CONTAINED IN THIS AGREEMENT WILL PREVENT SECURED PARTY FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING
ANY RIGHTS AGAINST DEBTOR INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF DEBTOR WITHIN ANY OTHER COUNTY, STATE OR OTHER
FOREIGN OR DOMESTIC JURISDICTION. Debtor acknowledges and agrees that the venue provided above is the most convenient forum for both
Secured Party and Debtor. Debtor waives any objection to venue and any objection based on a more convenient forum in any action instituted
under this Agreement.

 

11.3       Security
Interest Absolute. All rights of Secured Party hereunder, the Security Interest and all obligations of Debtor hereunder shall be absolute
and unconditional irrespective of (i) any filing by or against Debtor of any petition in bankruptcy or any action under federal or state
law for the relief of debtors or the seeking or consenting to of the appointment of an administrator, receiver, custodian or similar officer
for the wind up of its business; (ii) any lack of validity or enforceability of any agreement with respect to any of the Obligations,
(iii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to any departure from any agreement or instrument with respect to the Obligations, (iv)any exchange, release
or non-perfection of any lien or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing
all or any of the Obligations, or (v) any other circumstance that might otherwise constitute a defense available to, or a discharge of,
Debtor in respect of the Obligations or this Agreement. If, after receipt of any payment of all or any part of the Obligations, Secured
Party is for any reason compelled to surrender such payment to any person or entity, because such payment is determined to be void or
voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, such payment shall be reinstated
as part of the Obligations and this Agreement shall continue in full force notwithstanding any contrary action which may have been taken
by Secured Party in reliance upon such payment, and any such contrary action so taken shall be without prejudice to Secured Party’s
rights under this Agreement and shall be deemed to have been conditioned upon such payment having become final and irrevocable.

 

11.4       Remedies
Cumulative; Preservation of Rights. The rights and remedies herein are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies which Secured Party may have under other agreements now or hereafter in effect between Debtor
and Secured Party, at law (including under the UCC) or in equity. No failure or delay of Secured Party in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other
right or power. Debtor expressly disclaims any reliance on any course of dealing or usage of trade or oral representation of Secured Party
including representations to make loans to Debtor. No notice to or demand on Debtor in any case shall entitle Debtor to any other or further
notice or demand in similar or other circumstances.

    7 

     

    

11.5       Joint
and Several; Successors and Assigns. If there is more than one Debtor, each of them shall be jointly and severally liable for all
amounts, which become due, and the performance of all obligations under this Agreement and the term “Debtor” shall include
each as well as all of them. This Agreement shall be binding upon Debtor and upon its heirs and legal representatives, its successors
and assignees, and shall inure to the benefit of, and be enforceable by, Secured Party, its successors and assignees and each direct or
indirect assignee or other transferee of any of the Obligations; provided, however, that this Agreement may not be assigned by Debtor
without the prior written consent of Secured Party.

 

11.6       Waivers;
Changes in Writing. No course of dealing or other conduct, no oral agreement or representation made by Secured Party or usage of trade
shall operate as a waiver of any right or remedy of Secured Party. No waiver of any provision of this Agreement or consent to any departure
by Debtor therefrom shall in any event be effective unless made specifically in writing by Secured Party and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which given. No modification to any provision of this Agreement
shall be effective unless made in writing in an agreement signed by Debtor and Secured Party.

 

11.7       Interpretation.
Unless the context otherwise clearly requires, references to plural includes the singular and references to the singular include the plural;
the word “or” has the inclusive meaning represented by the phrase “and/or”; the word “including”,
“includes” and “include” shall be deemed to be followed by the words “without limitation”; and captions
or section headings are solely for convenience and not part of the substance of this Agreement. Any representation, warranty, covenant
or agreement herein shall survive execution and delivery of this Agreement and shall be deemed continuous. Each provision of this Agreement
shall be interpreted as consistent with existing law and shall be deemed amended to the extent necessary to comply with any conflicting
law. If any provision nevertheless is held invalid, the other provisions shall remain in effect. Debtor agrees that in any legal proceeding,
a photocopy of this Agreement kept in Secured Party’s course of business may be admitted into evidence as an original. Terms not
otherwise defined in this Agreement shall have the meanings attributed to such terms in the UCC.

 

11.8       Waiver
of Jury Trial. Debtor and Secured Party hereby knowingly, voluntarily, and intentionally
waive any right to trial by jury Debtor and Secured Party may have in any action or proceeding, in law or in equity, in connection with
this Agreement or any transactions related hereto. Debtor represents and warrants that no representative or agent of Secured Party has
represented, expressly or otherwise, that Secured Party will not, in the event of litigation, seek to enforce this jury trial waiver.
Debtor acknowledges that Secured Party has been induced to enter into this Agreement by, among other things, the provisions of this section.

 

    8 

     

    

Dated December 17, 2021

 

 

 

	 	 	CORNING NATURAL GAS CORPORATION
	 	 	 	 
	 	 	By:	/s/ Charles Lenns
	Signature of  Witness	 	Name:	Charles Lenns
	 	 	Title:	Vice President/Chief Financial Officer
	Typed Name of Witness	 	 	 
	 	 		 

 

ACKNOWLEDGMENT

 

	STATE OF NEW YORK 	 )
	 	 : SS.
	COUNTY OF 	 )

 

On the       day of December, in the
year 2021, before me, the undersigned, a Notary Public in and for said State, personally appeared CHARLES LENNS, personally known
to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person
upon behalf of which the individual acted, executed the instrument.

 

 

	 	 
	 	Notary Public

 

 

 

 

 

 

_______________________________________________________________________________________________________________________________________

FOR SECURED PARTY USE ONLY:

	Authorization confirmed: 	 

If Debtor’s Obligations arise under a guaranty in favor of Secured
Party, list the name whose indebtedness is being guaranteed under such guaranty:

 

    9 

     

    

Exhibit A

 

 

		1.	Permitted Liens (§3.1)

 

None

 

 

		2.	Residence, principal place of business or chief executive office (§3.5(i))

 

330 West William Street, Corning,
New York 14830

 

 

		3.	Location of Books and Records (§3.5(ii))

 

330 West William Street, Corning,
New York 14830

 

 

		4.	Location of Inventory, Equipment, Fixtures, Crops or Timber (§3.5(iii) and §3.5(iv))

 

330 West William Street, Corning, New
York 14830, as well as multiple locations containing the Debtor’s gas distribution infrastructure. 

 

 

		5.	Locations Not Owned by Debtor and Name of Record Owner (§3.5)

 

N/A

 

 

		6.	Trade Name, “Doing Business As” Name or Assumed Name (§3.6)

 

N/A

 

 

    10

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