Document:

Exhibit 10.1

 EXHIBIT 10.1 
  

									
	Borrower:	 	ROANOKE GAS COMPANY	    		 		 	
					
	Account Number:	 	9531668488	    	 

	 	Note Number:	 	00001
	  
 Address:
	 	  
 519 KIMBALL AVE NE
	    	 	  
 Roanoke,
	 	  
 Virginia

		 	ROANOKE, VA 24016-2103	    	 	  
 Date:
	 	  
 10/31/08

             PROMISSORY NOTE

 THE UNDERSIGNED REPRESENTS THAT THE LOAN EVIDENCED HEREBY IS BEING OBTAINED FOR BUSINESS/COMMERCIAL OR AGRICULTURAL PURPOSES. For value received,
the undersigned, jointly and severally, if more than one, promises to pay to BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation (the “Bank”), or order, at any of Bank’s offices in the above referenced city (or such
other place or places that may be hereafter designated by Bank), the sum of FIVE MILLION DOLLARS & 00/100 Dollars ($5,000,000.00), in immediately available coin or currency of the United States of America. 
  

	 ̈	Borrower shall pay a prepayment fee as set forth in the Prepayment Fee Addendum attached hereto. 

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

	 ̈	Fixed rate of             % per annum. 

  

	 ̈	Variable rate of the Bank’s Prime Rate plus             % per annum to be adjusted
                                        
as the Bank’s Prime Rate changes. If checked here   ̈, the interest rate will not exceed a(n)     ̈
fixed     ̈ average maximum rate of             % or a     ̈
floating maximum rate of the greater of             % or the Bank’s Prime Rate; and the interest rate will not decrease below a fixed minimum rate of
            %. If an average maximum rate is specified, a determination of any required reimbursement of interest by Bank will be made:     ̈ when Note is repaid in full by Borrower     ̈ annually beginning on
                    . 

  

	 ̈	Fixed rate of             % per annum through
                                        
which automatically converts on                      to a variable rate equal to the Bank’s Prime Rate plus
            % per annum which shall be adjusted
                                        
as such Prime Rate changes. 

  

	x	The Adjusted LIBOR Rate, as Defined in the Attached Addendum to Promissory Note 

 Principal and interest is payable as follows 
  

											
	x	    	Principal (plus any accrued interest not otherwise scheduled herein)	  	}	  	is due in full at maturity on 12/01/2015.
	  
  ̈
	    	  
 Principal plus accrued interest
	  	  
						
	 ̈	    	Payable in consecutive                      installments of	  		  	 ̈  Principal	  	}	  	commencing on                     
		    		  		  	 ̈  Principal and Interest	  	  

 and continued on the same day of each calendar period thereafter, in
                     equal payments of $             , with one final
payment of all remaining principal and accrued interest due on                     . 
  

	 ̈	ChoiceLine Payment Option: 2% of outstanding balance is payable monthly commencing on
                     and continuing on the same day of each calendar period thereafter, with one final payment of all remaining principal and
accrued interest due on                     . 

  

	x	Accrued interest is payable Quarterly commencing on December 1, 2008 and continuing on the same day of each calendar period thereafter, with one final payment of all
remaining interest due on December 1, 2015. 

  

	 ̈	Bank reserves the right in its sole discretion to adjust the fixed payment due hereunder
                                        
on                      and continuing on the same day of each calendar period thereafter, in order to maintain an amortization period of no
more than                      months from the date of the initial principal payment due hereunder. Borrower understands the payment may
increase if interest rates increase. 

  

	 ̈	Prior to an event of default, Borrower may borrow, repay, and reborrow hereunder pursuant to the terms of the Loan Agreement, hereinafter defined. 

 

			
	 ̈	  	  

  

	 ̈	Borrower hereby authorizes Bank to automatically draft from its demand deposit or savings account(s) with Bank or other bank, any payment(s) due under this Note on the date(s)
due. Borrower shall provide appropriate account number(s) for account(s) at Bank or other bank. 

 The undersigned shall
pay to Bank a late fee in the amount of five percent (5%) of any installment past due for ten (10) or more days. When any installment payment is past due for ten (10) or more days, subsequent payments shall first be applied to the
past due balance. In addition, the undersigned shall pay to Bank a returned payment fee if the undersigned or any other obligor hereon makes any payment at any time by check or other instrument, or by any electronic means, which is returned to Bank
because of nonpayment due to nonsufficient funds. 
 All interest shall be computed and charged for the actual number of days elapsed
on the basis of a year consisting of three hundred sixty (360) days. In the event periodic accruals of interest shall exceed any periodic fixed payment amount described above, the fixed payment amount shall be immediately increased, or
additional supplemental interest payments required on the same periodic basis as specified above (increased fixed payments or supplemental payments to be determined in the Bank’s sole discretion), in such amounts and at such times as shall be
necessary to pay all accruals of interest for the period and all accruals of unpaid interest from previous periods. Such adjustments to the fixed payment amount or supplemental payments shall remain in effect for so long as the interest accruals
shall exceed the original fixed payment amount and shall be further adjusted upward or downward to reflect changes in the variable interest rate; provided that unless elected otherwise above, the fixed payment amount shall not be reduced below the
original fixed payment amount. However, Bank shall have the right, in its sole discretion, to lower the fixed payment amount below the original payment amount. 
 This note (“NOTE”) is given by the undersigned in connection with the following agreements (if any) between the undersigned and the Bank: 
 Deed(s) of Trust / Mortgage(s) granted in favor of Bank as beneficiary / mortgagee: 
  

			
	 ̈	  	dated                      in the maximum principal amount of $
                    
		
		  	granted by
                                         
                                         
                  
		
	 ̈	  	dated                      in the maximum principal amount of $
                    
		
		  	granted by
                                         
                                         
                  

 IMPORTANT NOTICE 
 THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR AND ALLOWS THE CREDITOR TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT ANY FURTHER
NOTICE. 
  

					
	 ACCOUNT# / NOTE#
  
 9531668488            00001
  
     1472VA (0807)
	 		 	
	 	

	 	Page 1 of 6
	 		 	

									
		 	Security Agreement(s) granting a security interest to Bank:
					
	 ̈	 	dated	 	  
	 	given by	 	  

		
		 	  

					
	 ̈	 	dated	 	  
	 	given by	 	  

		
		 	  

									
					
	 ̈	 	Securities Account Pledge and Security Agreement dated	 	  
	 	, executed by	 	
			
		 	  
	 	.

											
						
	 ̈	 	Control Agreement(s) dated	 	  
	 	, covering	  	 ̈  Deposit Account(s)	  	 ̈  Investment Property
						
		 		 		 		  	 ̈  Letter of Credit Rights	  	 ̈  Electronic Chattel Paper

									
			
	 ̈	 	Assignment of Certificate of Deposit, Security Agreement, and Power of Attorney (for Certificated Certificates of Deposit) dated	 	  

									
				
		 	  
	 	, executed by	 	  

		
		 	  

											
					
	 ̈	 	Pledge and Security Agreement for Publicly Traded Certificated Securities dated	 	  
	 	, executed	 	
				
		 	by	 	  
	 	.

									
					
	 ̈	 	Assignment of Life Insurance Policy as Collateral dated	 	  
	 	, executed by	 	
			
		 	  
	 	.

									
					
	x	 	Loan Agreement dated	 	 10/31/2008
	 	, executed by Borrower and    x  Guarantor(s).	 	
			
	 ̈	 	  
	 	.
			
	 ̈	 	  
	 	
		 	  
	 	
			
	 ̈	 	  
	 	.

 All of the terms, conditions and covenants of the above described agreements (the
“Agreements”) are expressly made a part of this Note by reference in the same manner and with the same effect as if set forth herein at length and any holder of this Note is entitled to the benefits of and remedies provided in the
Agreements and any other agreements by and between the undersigned and the Bank. 
 No delay or omission on the part of the holder in
exercising any right hereunder shall operate as a waiver of such right or of any other right of such holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or of any other right on any future
occasion. Every one of the undersigned and every endorser or guarantor of this Note regardless of the time, order or place of signing waives presentment, demand, protest and notices of every kind and assents to any one or more extensions or
postponements of the time of payment or any other indulgences, to any substitutions, exchanges or releases of collateral if at any time there be available to the holder collateral for this Note, and to the additions or releases of any other parties
or persons primarily or secondarily liable. 
 The failure to pay any part of the principal or interest when due on this Note or to fully
perform any covenant, obligation or warranty on this or on any other liability to the Bank by any one or more of the undersigned, by any affiliate of the undersigned (as defined in 11 USC Section (101) (2)), or by any guarantor or surety of
this Note (said affiliate, guarantor, and surety are herein called Obligor); or if any financial statement or other representation made to the Bank by any of the undersigned or any Obligor shall be found to be materially incorrect or incomplete; or
if any of the undersigned shall fail to furnish information to the Bank sufficient to verify the identity of the undersigned as required under the USA Patriot Act; or in the event of a default pursuant to any of the Agreements or any other
obligation of any of the undersigned or any Obligor in favor of the Bank; or in the event the Bank demands that the undersigned secure or provide additional security for its obligations under this Note and security deemed adequate and sufficient by
the Bank is not given when demanded; or in the event one or more of the undersigned or any Obligor shall die, terminate its existence, allow the appointment of a receiver for any part of its property, make an assignment for the benefit of creditors,
or where a proceeding under bankruptcy or insolvency laws is initiated by or against any of the undersigned or any Obligor; or in the event the Bank should otherwise deem itself, its security interest, or any collateral unsafe or insecure; or should
the Bank in good faith believe that the prospect of payment or other performance is impaired; or if there is an attachment, execution, or other judicial seizure of all or any portion of the Borrower’s or any Obligor’s assets, including an
action or proceeding to seize any funds on deposit with the Bank, and such seizure is not discharged within 20 days; or if final judgment for the payment of money shall be rendered against the Borrower or any Obligor which is not covered by
insurance or debt cancellation and shall remain undischarged for a period of 30 days unless such judgment or execution thereon is effectively stayed; or the termination of any guaranty agreement given in connection with this Note, then any one of
the same shall be a material default hereunder and this Note and other debts due the Bank by any one or more of undersigned shall immediately become due and payable without notice, at the option of the Bank. From and after any event of default
hereunder, interest shall accrue on the sum of the principal balance and accrued interest then outstanding at the variable rate equal to the Bank’s Prime Rate plus 5% per annum (“Default Rate”), provided that such rate shall not
exceed at any time the highest rate of interest permitted by the laws of the State of Virginia; and further provided that such rate shall apply after judgement. In the event of any default, the then remaining unpaid principal amount and accrued but
unpaid interest then outstanding shall bear interest at the Default Rate called for hereunder until such principal and interest have been paid in full. In addition, upon default, the Bank may pursue its full legal remedies at law or equity, and the
balance due hereunder may be charged against any obligation of the Bank to any party including any Obligor. Bank shall not be obligated to accept any check, money order, or other payment instrument marked “payment in full” on any
disputed amount due hereunder, and Bank expressly reserves the right to reject all such payment instruments. Borrower agrees that tender of its check or other payment instrument so marked will not satisfy or discharge its obligation under this Note,
disputed or otherwise, even if such check or payment instrument is inadvertently processed by Bank unless in fact such payment is in fact sufficient to pay the amount due hereunder. 
 WAIVER OF TRIAL BY JURY. UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS
OR CLAIMS ARISING OUT OF THIS NOTE OR ANY LOAN DOCUMENT EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN THE UNDERSIGNED AND BANK. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO MAKE THE LOAN EVIDENCED BY THIS
NOTE. FURTHER, THE UNDERSIGNED HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION IN THE EVENT OF
LITIGATION. NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION. 
 Unless otherwise required under a Loan Agreement, if applicable, and as long as any indebtedness evidenced by this Note remains outstanding or as long as Bank remains obligated to make advances, the undersigned shall furnish annually an
updated financial statement in a form satisfactory to Bank, which, when delivered shall be the property of the Bank. 
  

			
	1472VA (0807)	 	Page 2 of 6

 CONFESSION OF JUDGMENT. THE UNDERSIGNED IRREVOCABLY APPOINTS CHRISTINA VOLZER BAILEY, LYNNE
CRANFORO, AND JAMES W. PATTERSON EITHER OF WHOM MAY ACT ALONE, AS THE DULY CONSTITUTED ATTORNEY-IN-FACT OF THE UNDERSIGNED WITH AUTHORITY, IN THE NAME, PLACE, AND STEAD OF THE UNDERSIGNED OR ANY OF THEM (IF MORE THAN ONE) TO CONFESS JUDGMENT IN THE
OFFICE OF THE CIRCUIT COURT OF THE COUNTY OF FAIRFAX, VIRGINIA, AGAINST THE UNDERSIGNED OR ANY OF THEM (IF MORE THAN ONE), IN THE FULL AMOUNT DUE UNDER THIS NOTE AND ANY MODIFICATION, RENEWAL OR SUBSTITUTION THEREOF, WHETHER NOW OR HEREAFTER
EXISTING, AND ALL COSTS OF COLLECTION (INCLUDING, BUT NOT LIMITED TO, REASONABLE ATTORNEY’S FEES), UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT UNDER THIS NOTE OR ANY MODIFICATION, RENEWAL OR SUBSTITUTION THEREOF, WHETHER NOW OR HEREAFTER
EXISTING. SUCH APPOINTMENT SHALL CONSTITUTE A POWER COUPLED WITH AN INTEREST AND SHALL REMAIN IN EFFECT UNTIL ANY AND ALL INDEBTEDNESS EVIDENCED BY THIS NOTE HAS BEEN PAID IN FULL. 
 The term “Prime Rate,” if used herein, means the rate of interest per annum announced by the Bank from time to time and adopted as its Prime
Rate. The Prime Rate is one of several rate indexes employed by the Bank when extending credit. Any change in the interest rate resulting from a change in the Bank’s Prime Rate shall become effective as of the opening of business on the
effective date of the change. If this Note is placed with an attorney for collection, the undersigned agrees to pay, in addition to principal and interest, all costs of collection, including but not limited to reasonable attorneys’ fees. All
obligations of the undersigned and of any Obligor shall bind his heirs, executors, administrators, successors, and/or assigns. Use of the masculine pronoun herein shall include the feminine and the neuter, and also the plural. If more than one party
shall execute this Note, the term “undersigned” as used herein shall mean all the parties signing this Note and each of them, and all such parties shall be jointly and severally obligated hereunder. Wherever possible, each provision of
this Note shall be interpreted in such a manner to be effective and valid under applicable law, but if any provision of this Note shall be prohibited by or invalid under such law, such provision shall be ineffective but only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note. All of the undersigned hereby waive all exemptions and homestead laws. The proceeds of the loan evidenced by this Note may be
paid to any one or more of the undersigned. 
 From time to time the maturity date of this Note may be extended, or this Note may be renewed
in whole or in part, or a new note of different form may be substituted for this Note, or the rate of interest may be modified, or changes may be made in consideration of loan extensions, and the holder hereof, from time to time may waive or
surrender, either in whole or in part any rights, guaranties, secured interest, or liens, given for the benefit of the holder in connection with the payment and the securing the payment of this Note; but no such occurrence shall in any manner
affect, limit, modify, or otherwise impair any rights, guaranties or security of the holder not specifically waived, released, or surrendered in writing, nor shall the undersigned makers, or any guarantor, endorser, or any person who is or might be
liable hereon, either primarily or contingently, be released from such event. The holder hereof, from time to time, shall have the unlimited right to release any person who might be liable hereon, and such release shall not affect or discharge the
liability of any other person who is or might be liable hereon. No waivers and modifications shall be valid unless in writing and signed by the Bank. The Bank may, at its option, charge any reasonable fees for the modification, renewal, extension,
or amendment of any of the terms of the Note permitted by applicable laws. In case of a conflict between the terms of this Note and the Loan Agreement or Commitment Letter issued in connection herewith, the priority of controlling terms shall be
first this Note, then the Loan Agreement, and then the Commitment Letter. This Note shall be governed by and construed in accordance with the laws of Virginia. 
 (SIGNATURES ON FOLLOWING PAGES) 
 

                                    

  

			
	1472VA (0807)	 	Page 3 of 6

 

 
 PROMISSORY NOTE SIGNATURE PAGES 
  

									
	Borrower:	  	 ROANOKE GAS COMPANY

	Account Number:	  	 9531668488
	 		  	Note Number:	  	 00001

	Note Amount:	  	 $5,000,000.00
	 		  	Date:	  	 10/31/08

 Notice of Right to Copy of Appraisal: If a 1-4 family residential dwelling is pledged as collateral
for this Note, you, the undersigned, have a right to a copy of the real estate appraisal report used in connection with your application for credit. If you wish to receive a copy, please notify in writing the branch office where you applied for
credit. You must forward your request to the Bank no later than 90 days after the date of this Note. In your request letter, please provide your name, mailing address, appraised property address, the date of this Note, and the Account and Note
Numbers shown on the front of this Note. 
 IN WITNESS WHEREOF, the undersigned, on the day and year first written above, has caused this Note to be executed
under seal. 
 If Borrower is a Corporation: 
  

							
	
	WITNESS:	 		 		 	
		 		 	 ROANOKE GAS COMPANY

		 		 	NAME OF CORPORATION
				
	 /s/ Dale P. Lee
	 	By:	 	 

	 	(SEAL)
		 	Title:	 	Chairman, President, & CEO	 	
				
	  
	 	By:	 	 

	 	(SEAL)
		 	Title:	 	VP, Treasurer & CFO	 	

 COMMONWEALTH OF VIRGINIA 
 CITY OF Roanoke 
 On this day of 31st day of October, 2008, before me, the undersigned Notary Public, personally appeared John B. Williamson III and Howard T. Lyon, and known to me to be an authorized agent of the
corporation that executed this instrument and acknowledged this instrument to be “their” free and voluntary act and deed of the corporation, by authority of its Bylaws or by the resolution of its board of directors, for the uses and
purposes therein mentioned, and on oath stated that he or she is authorized to execute this instrument and in fact executed the instrument on behalf of the corporation. 
 Residing at
                                         
                        
 Notary Public
in and for Commonwealth of Virginia 
  

							
	(STAMP OR SEAL)	 		 	 Diane L. Conner
	 	(SEAL)
	

	 		 	Notary Public	 	
	 		 	My Commission Expires: February 28, 2010
	 		 	Notary Registration Number: 225607            

  

			
	1472VA (0807)	 	Page 4 of 6

 If Borrower is a Partnership, Limited Liability Company, Limited Liability Partnership, 

or Limited Liability Limited Partnership: 
  

									
	WITNESS:	 		 	  

		 		 	NAME OF PARTNERSHIP, LLC, LLP, OR LLLP
					
	  
	 		 	By:	 	  
	 	(SEAL)
				
		 		 	Title:	 	  

					
	  
	 		 	By:	 	  
	 	(SEAL)
				
		 		 	Title:	 	  

					
	  
	 		 	By:	 	  
	 	(SEAL)
				
		 		 	Title:	 	  

 COMMONWEALTH OF VIRGINIA 
 CITY/COUNTY OF
                                         
            
 On this      day of
            , 20    , before me, the undersigned Notary Public, personally appeared
                                         
               , and known to me to be a partner, member or designated agent of the partnership or limited liability company that executed this instrument and acknowledged
this instrument to be the free and voluntary act and deed of the partnership or limited liability company, by authority of statute, its articles of organization or its operating agreement, for the uses and purposes therein mentioned, and on oath
stated that he or she is authorized to execute this instrument and in fact executed the instrument on behalf of the partnership or limited liability company. 
  

							
	Residing at	  	  
	  		  	
	Notary Public in and for	  	  
	  		  	

  

									
	(STAMP OR SEAL)	 		 	  
	 	(SEAL)
		 		 	Notary Public	 		 	
		 		 	My Commission Expires:	 	  
	 	
		 		 	Notary Registration Number:	 	  
	 	

  

			
	1472A (0807)	 	Page 5 of 6

 If Borrower is an Individual: 
  

							
	 WITNESS
  
	 		  	  
  
	 	(SEAL)

 COMMONWEALTH OF VIRGINIA 
 CITY/COUNTY OF
                                        

 On this day before me, the undersigned Notary Public, personally appeared
                                         
                                        , to me
known to be the individual described in and who executed this instrument, and acknowledged that he/she signed the instrument as his/her free and voluntary act and deed, for the uses and purposes therein mentioned. 
 Given under my hand and official seal this          day of
            , 20    . 
 Residing at
                                        

  

							
	 (STAMP OR SEAL)
	 		  	  
	 	(SEAL)
		 		  	Notary Public	 	
		 		  	My Commission Expires:
                                         
           	 	
		 		  	Notary Registration Number:
                                         
    	 	

 Additional Co-makers: 
  

							
	 WITNESS
  
	 		  	  
  
	 	(SEAL)
	  
  
	 		  	  
  
	 	(SEAL)
	  
  
	 		  	  
  
	 	(SEAL)
	  
  
	 		  	  
  
	 	(SEAL)

 COMMONWEALTH OF VIRGINIA 
 CITY/COUNTY OF
                                        

 On this day before me, the undersigned Notary Public, personally appeared
                                         
                                        , to me
known to be the individuals described in and who executed this instrument, and acknowledged that they signed the instrument as their free and voluntary act and deed, for the uses and purposes therein mentioned. 
 Given under my hand and official seal this          day of
            , 20    . 
 Residing at
                                        

  

					
	 (STAMP OR SEAL)
	  	  
	 	(SEAL)
		  	Notary Public	 	
		  	My Commission Expires:
                                         
           	 	
		  	Notary Registration Number:
                                         
    	 	

  

			
	1472VA (0807)	 	Page 6 of 6

 

 
 ADDENDUM TO PROMISSORY NOTE 
 THIS ADDENDUM TO PROMISSORY NOTE (“Addendum”) is hereby made a part of the Promissory Note dated 10/31/08 from ROANOKE GAS COMPANY
(“Borrower”) payable to the order of Branch Banking and Trust Company (“Bank”) in the principal amount of $ 5,000,000.00 (including all renewals, extensions, modifications and substitutions therefore, the “Note”).

  

	I.	DEFINITIONS 

 1.1 Adjusted LIBOR Rate means a rate of
interest per annum equal to the sum obtained (rounded upwards, if necessary, to the next higher 1/100th of 1.0%) by adding (i) the Three Month LIBOR plus (ii) 1.250 % per annum, which shall be adjusted [    ]
monthly on the first day of each month for each LIBOR Interest Period or [X] quarterly on the first day of each LIBOR Interest Period. If the first day of the month or calendar quarter, as applicable, falls on a date when the Bank is closed, the
Adjusted LIBOR Rate shall be determined as of the last preceding business day. The Adjusted LIBOR Rate shall be adjusted for any change in the LIBOR Reserve Percentage so that Bank shall receive the same yield. If checked here  ̈ the interest rate will not exceed a(n)  ̈ fixed     ̈ average maximum rate of
             % and will not decrease below a minimum rate of             %. If an average maximum rate is
specified, a determination of the average interest rate assessed and a reimbursement by Bank of interest paid in excess of the maximum rate, if any, will be made on
                    . If the loan has been repaid prior to this date, no reimbursement will be made. 
 1.2 Three Month LIBOR means the average rate (rounded upwards, if necessary, to the next higher 1/100th of 1.0%) quoted on Bloomberg Screen BBAM1 or Page 3750 (or
such replacement page) of the Telerate Service on the determination date for deposits in U.S. Dollars offered in the London interbank market for three months, or if the above method for determining the Three Month LIBOR shall not be available, the
rate quoted in The Wall Street Journal, or a rate determined by a substitute method of determination agreed on by Borrower and Bank; provided, if such agreement is not reached within a reasonable period of time (in Bank’s sole judgement), a
rate reasonably determined by Bank in its sole discretion as a rate being paid, as of the determination date, by first class banking organizations (as determined by Bank) in the London interbank market for U.S. Dollar deposits. 
 1.3 LIBOR Advance means the advances made by Bank to Borrower evidenced by this Note upon which the Adjusted LIBOR Rate of interest shall apply. 
 1.4 LIBOR Interest Period means (i) if adjusted monthly, a period of one calendar month as may be elected by the Borrower applicable to any LIBOR Advance
which shall begin on the first day of any month notwithstanding the maturity date of this Note; provided, however, that a LIBOR Interest Period may be less than one calendar month in and only in the calendar month in which the Note originates or
matures, or (ii) if adjusted quarterly, a period of one calendar quarter which shall begin on the first day of each calendar quarter (each January, April, July, October) notwithstanding the maturity date of this Note; provided, however, that a
LIBOR Interest Period may be less than one calendar quarter in and only in the calendar quarter in which the Note originates or matures. 
 1.5 LIBOR
Reserve Percentage means the maximum aggregate rate at which reserves (including, without limitation, any marginal supplemental or emergency reserves) are required to be maintained under Regulation D by member banks of the Federal Reserve System
with respect to dollar funding in the London interbank market. Without limiting the effect of the foregoing, the LIBOR Reserve Percentage shall reflect any other reserves required to be maintained by such member banks by reason of any applicable
regulatory change against (i) any category of liability which includes deposits by reference to which the Adjusted LIBOR Rate is to be determined or (ii) any category of extensions of credit or other assets related to LIBOR. 
 1.6 Standard Rate means, for any day, a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1.0%) equal to the Bank’s announced
Prime Rate minus              % per annum, and each change in the Standard Rate shall be effective on the date any change in the Prime Rate is publicly announced as being effective.

  

	II.	LOAN BEARING ADJUSTED LIBOR RATE 

 2.1 Application of Adjusted
LIBOR Rate. The Adjusted LIBOR Rate shall apply to the entire principal balance outstanding of a LIBOR Advance for any LIBOR Interest Period. 
 2.2
Adjusted LIBOR Based Rate Protections. 
 (a) Inability to Determine Rate. In the event that Bank shall have determined, which
determination shall be final, conclusive and binding, that by reason of circumstances occurring after the date of this Note affecting the London interbank market, adequate and fair means do not exist for ascertaining the Three Month LIBOR on the
basis provided for in this Note, Bank shall give notice (by telephone confirmed in writing or by telecopy) to Borrower of such determination, whereupon (i) no LIBOR Advance shall be made until Bank notifies Borrower that the circumstances
giving rise to such notice no longer exist, and (ii) any request by Borrower for a LIBOR Advance shall be deemed to be a request for an advance at the Standard Rate. 
  

					
	      ACCOUNT# / NOTE#	  	 

	  	
	      9531668488        00001	  	  	Page 1 of 2
	  1858VA (0801)	  	  	

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

									
	If Borrower is a Corporation:
			
	WITNESS:	 		 	 ROANOKE GAS COMPANY

		 		 	NAME OF CORPORATION
					
	 /s/ Dale P. Lee
	 		 	By:	 	 

	 	(SEAL)
		 		 	Title:	 	Chairman, President, & CEO
					
	 /s/ Amanda Minton
	 		 	By:	 	 

	 	(SEAL)
		 		 	Title:	 	VP, Treasurer & CFO
	
	 If Borrower is a Partnership, Limited Liability Company, Limited Liability Partnership,

or Limited Liability Limited Partnership:

			
	WITNESS:	 		 	  

		 		 	NAME OF PARTNERSHIP, LLC, LLP, OR LLLP
					
	  
	 		 	By:	 	  
	 	(SEAL)
		 		 	Title:	 	  

					
	  
	 		 	By:	 	  
	 	(SEAL)
		 		 	Title:	 	  

					
	  
	 		 	By:	 	  
	 	(SEAL)
		 		 	Title:	 	  

	
	If Borrower is an Individual:
					
	WITNESS:	 		 		 		 	
				
	  
	 		 	  
	 	(SEAL)
	
	Additional Co-makers:
					
	WITNESS:	 		 		 		 	
				
	  
	 		 	  
	 	(SEAL)
				
	  
	 		 	  
	 	(SEAL)
				
	  
	 		 	  
	 	(SEAL)
				
	  
	 		 	  
	 	(SEAL)

  

			
	1858VA (0801)	 	Page 2 of 2Exhibit 10.2

 Exhibit 10.2 
 

 
 LOAN AGREEMENT 
 9531668488 
  
 Account Number 
 This Loan Agreement (the “Agreement”) is made this 31st day of October, 2008
by and between BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation (“Bank”), and: 
 Roanoke Gas Company a Virginia corporation
(“Borrower”), having its chief executive office at Roanoke. 
 RGC Resources Inc. (individually “Guarantor”). 
 The Borrower has applied to Bank for and the Bank has agreed to make, subject to the terms of this Agreement, the following loan (hereinafter referred to, as
“Loan”): 
 Term Loan (“Term Loan”) in the principal amount of $5,000,000.00 for the purpose of refinancing existing debt which shall be
evidenced by the Borrower’s Promissory Note dated of even date herewith payable in 29 consecutive quarterly installments and shall bear interest at a rate as described more particularly in such note, the terms of which are incorporated herein
by reference. The Term Loan shall mature on December 1,2015, when the entire unpaid principal balance then outstanding plus accrued interest thereon shall be paid in full. 
 Section 1 Conditions Precedent 
 The Bank shall not be obligated to make any disbursement of Loan proceeds until
all of the following conditions have been satisfied by proper evidence, execution, and/or delivery to the Bank of the following items in addition to this Agreement, all in form and substance satisfactory to the Bank and the Bank’s counsel in
their sole discretion: 
 USA Patriot Act Verification Information: Information or documentation, including but not limited to the legal name,
address, tax identification number, driver’s license, and date of birth (if the Borrower is an individual) of the Borrower sufficient for the Bank to verify the identity of the Borrower in accordance with the USA Patriot Act. Borrower shall
notify Bank promptly of any change in such information. 
 Note: The Note evidencing the Loans duly executed by the Borrower. 
 Commitment Fee: A commitment fee of $10,000.00 payable to the Bank on the date of execution of the Loan Documents. 
 Corporate Resolution: A Corporate Resolution duly adopted by the Board of Directors of the Borrower authorizing the execution, delivery, and performance of the
Loan Documents on or in a form provided by or acceptable to Bank. 
 Articles of Incorporation: A copy of the Articles of Incorporation and all other
charter documents of the Borrower, all filed with and certified by the Secretary of State of the State of the Borrower’s incorporation. 
 By-Laws: A copy of the By-Laws of the Borrower, certified by the Secretary of the Borrower as to their completeness and accuracy. 
 Certificate of Incumbency: A certificate of the Secretary of the Borrower certifying the names and true signatures of the officers of the Borrower authorized to sign the Loan Documents. 
 Certificate of Existence: A certification of the Secretary of State (or other government authority) of the State of the Borrower’s Incorporation or
Organization as to the existence or good standing of the Borrower and its charter documents on file. 
 Guaranty: Guaranty Agreement duly executed by
the Guarantor. 
 Additional Documents: Receipt by the Bank of other approvals, opinions, or documents as the Bank may reasonably request. 

Section 2 Representations and Warranties 
 The Borrower and
Guarantor represent and warrant to Bank that: 
 2.01. Financial Statements. The balance sheet of the Borrower and its
subsidiaries, if any, and the related Statements of Income and Retained Earnings of the Borrower and its subsidiaries, the accompanying footnotes together with the accountant’s opinion thereon, and all other financial information previously
furnished to the Bank, are true and correct and fairly reflect the financial condition of the Borrower and its subsidiaries as of the dates thereof, including all contingent liabilities of every type, and the financial condition of the Borrower and
its subsidiaries as stated therein has not changed materially and adversely since the date thereof. Each Guarantor further represents and warrants that all financial statements provided by such Guarantor to Bank concerning such Guarantor’s
financial condition are true and correct and fairly represent such Guarantor’s financial condition as of the dates thereof 
 2.02.
Name, Capacity and Standing. The Borrower’s exact legal name is correctly stated in the initial paragraph of the Agreement. If the Borrower and/or any Guarantor is a corporation, general partnership, limited partnership, limited
liability partnership, or limited liability company, each warrants and represents that it is duly organized and validly existing under the laws of its respective state of incorporation or organization; that it and/or its subsidiaries, if any, are
duly qualified and in good standing in every other state in which the nature of their business shall require such qualification, and are each duly authorized by their board of directors, general partners or member/manager(s), respectively, to enter
into and perform the obligations under the Loan Documents. 
 2.03. No Violation of Other Agreements. The execution of the Loan
Documents, and the performance by the Borrower, by any and all pledgors (whether the Borrower or other owners of collateral property securing payment of the Loan (hereinafter sometimes referred to as the “Pledgor”)) or by the Guarantor
thereunder will not violate any provision, as applicable, of its articles of incorporation, by-laws, articles of organization, operating agreement, agreement of partnership, limited partnership or limited liability partnership, or, of any law, other
agreement, indenture, note, or other instrument binding upon the Borrower, Pledgor or Guarantor, or give cause for the acceleration of any of the respective obligations of the Borrower or Guarantor. 
 2.04. Authority. All authority from and approval by any federal, state, or local governmental body, commission or agency necessary to the making,
validity, or enforceability of this Agreement and the other Loan Documents has been obtained. 
 2.05. Asset Ownership. The Borrower
and each Guarantor have good and marketable title to all of the properties and assets reflected on the balance sheets and financial statements furnished to the Bank, and all such properties and assets are free and clear of mortgages, deeds of trust,
pledges, liens, and all other encumbrances except as otherwise disclosed by such financial statements. In addition, each other owner of collateral has good and marketable title to such collateral, free and clear of any liens, security interests and
encumbrances, except as otherwise disclosed to Bank. 
 2.06. Discharge of Liens and Taxes- The Borrower and its subsidiaries, if any,
and each Guarantor have filed, paid, and/or discharged all taxes or other claims which may become a lien on any of their respective properties or assets, excepting to the extent that such items are being appropriately contested in good faith and for
which an adequate reserve (in an amount acceptable to Bank) for the payment thereof is being maintained. 
 2.07. Regulations U and X.
None of the Loan proceeds shall be used directly or indirectly for the purpose of purchasing or carrying any margin stock in violation of the provisions of Regulation U and Regulation X of the Board of Governors of the Federal Reserve System.

 2.08. ERISA. Each employee benefit plan, as defined by the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), maintained by the Borrower or by any subsidiary of the Borrower or Guarantor(s) meets, as of the date hereof, the minimum funding standards of Section 302 of ERISA, all applicable requirements of ERISA and of the Internal
Revenue Code of 1986, as amended, and no “Reportable Event” nor “Prohibited Transaction” (as defined by ERISA) has occurred with respect to any such plan. 
  

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 LOAN AGREEMENT 
 2.09. Litigation. There is no claim, action, suit or proceeding pending, threatened or reasonably anticipated before any court, commission,
administrative agency, whether State or Federal, or arbitration which will materially adversely affect the financial condition, operations, properties, or business of the Borrower or its subsidiaries, if any, or the Guarantor(s), or the ability of
the Borrower or the Guarantor(s) to perform their obligations under the Loan Documents. 
 2.10. Other Agreements. The representations
and warranties made by Borrower to Bank in the other Loan Documents are true and correct in all respects on the date hereof. 
 2.11.
Binding and Enforceable. The Loan Documents, when executed, shall constitute valid and binding obligations of the Borrower and Guarantor respectively, the execution of such Loan Documents has been duly authorized by the parties thereto, and
are enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting creditors’ rights generally. 
 2.12. Commercial Purpose. The Loan is not a “consumer transaction”, as defined in the Virginia Uniform Commercial Code, and none of the collateral was or will be purchased or held primarily for
personal, family or household purposes. 
 Section 3 Affirmative Covenants 
 The Borrower covenants and agrees that from the date hereof and until payment in full of all indebtedness and performance of all obligations owed under the Loan Documents, Borrower shall: 
 3.01. Maintain Existence and Current Legal Form of Business. (a) Maintain its existence and good standing in the state of its incorporation or
organization, (b) maintain its current legal form of business indicated above, and, (c) as applicable, qualify and remain qualified as a foreign corporation, general partnership, limited partnership, limited liability partnership or
limited liability company in each jurisdiction in which such qualification is required. 
 3.02. Maintain Records. Keep adequate
records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, reflecting all financial transactions of the Borrower. 
 3.03. Maintain Properties. Maintain, keep, and preserve all of its properties (tangible and intangible) including the collateral necessary or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted. 
 3.04. Conduct of Business. Continue to engage in an efficient, prudent, and economical
manner in a business of the same general type as now conducted. 
 3.05. Maintain Insurance. Maintain insurance with financially sound
and reputable insurance companies or associations in such amounts and covering such risks as are usually carried by companies engaged in the same or a similar business, and business interruption insurance if required by Bank, which insurance may
provide for reasonable deductible(s). The Bank shall be named as loss payee (Long Form) on all policies which apply to the Bank’s collateral, and the Borrower shall deliver certificates of insurance at closing evidencing same. All such
insurance policies shall provide, and the certificates shall state, that no policy will be terminated without 20 days prior written notice to Bank. 
 3.06. Comply With Laws. Comply in all respects with all applicable laws, rules, regulations, and orders including, without limitation, paying before the delinquency of all taxes, assessments, and governmental charges imposed upon it
or upon its property, and all Environmental Laws. 
 3.07. Right of Inspection. Permit the officers and authorized agents of the Bank,
at any reasonable time or times in the Bank’s sole discretion, to examine and make copies of the records and books of account of, to visit the properties of the Borrower, and to discuss such matters with any officers, directors, managers,
members or partners, limited or general of the Borrower, and the Borrower’s independent accountant as the Bank deems necessary and proper. 
 3.08. Reporting Requirements. Furnish to the Bank: 
 Quarterly Financial Statements: As soon as available and not more
than Forty Five (45) days after the end of each quarter balance sheets, statements of income, cash flow, and retained earnings for the period ended and a statement of changes in the financial position, all in reasonable detail, and all prepared
in accordance with GAAP consistently applied and certified as true and correct by an officer, general partner or manager (or member(s)) of the Borrower, as appropriate. 
 Annual Financial Statements: As soon as available and not more than One Hundred Twenty (120) days after the end of each fiscal year, balance sheets, statements of income, and retained earnings for the
period ended and a statement of changes in the financial position, all in reasonable detail, and all prepared in accordance with GAAP consistently applied. The financial statements must be of the following quality or better: Company prepared.

 Notice of Litigation: Promptly after the receipt by the Borrower, or by any Guarantor of which Borrower has knowledge, of notice or
complaint of any action, suit, and proceeding before any court or administrative agency of any type which, if determined adversely, could have a material adverse effect on the financial condition, properties, or operations of the Borrower or
Guarantor, as appropriate. 
 Notice of Default: Promptly upon discovery or knowledge thereof, notice of the existence of any event of
default under this Agreement or any other Loan Documents. 
 USA Patriot Act Verification Information: Information or documentation,
including but not limited to the legal name, address, tax identification number, driver’s license, and date of birth (if the Borrower is an individual) of the Borrower sufficient for the Bank to verify the identity of the Borrower in accordance
with the USA Patriot Act. Borrower shall notify Bank promptly of any change in such information. 
 Other Information: Such other
information as the Bank may from time to time reasonably request. 
 3.09. Affirmative Covenants from other Loan Documents. All
affirmative covenants contained in any Deed of Trust, Security Agreement, Assignment of Leases and Rents, or other security document executed by the Borrower which are described in Section I hereof are hereby incorporated by reference herein.

 Section 4 Guarantor Covenants 
 Guarantor
covenants and agrees that from the date hereof and until payment in full of all indebtedness and performance of all obligations owed under the Loan Documents, Guarantor shall: 
 4.01. Maintain Existence and Current Legal Form of Business. If Guarantor is a corporation, partnership, limited partnership, limited liability
partnership or limited liability company, (a) maintain its existence and good standing in the state of its incorporation or organization, (b) maintain its current legal form of business as shown on the guaranty agreement provided by
Guarantor to Bank in connection with the Loan, (c) without the Bank’s prior written consent, change Guarantor’s name, or enter into any merger, consolidation, reorganization or exchange of stock, ownership interests or assets, and
(d) as applicable, qualify’ and remain qualified as a foreign corporation, general partnership, limited partnership, limited liability partnership or limited liability company in each jurisdiction in which such qualification is required.

 4.02.Maintain Properties. Not, without the prior written consent of Bank, sell, transfer or otherwise dispose of all or
substantially all of Guarantor’s properties (tangible and intangible), except in the ordinary course of business. 
 4.03.Comply With
Laws. Comply in all respects with all applicable laws, rules, regulations, and orders including, without limitation, paying before the delinquency of all taxes, assessments, and governmental charges imposed or assessed upon Guarantor or upon
Guarantor’s property, and all Environmental Laws. 
 4.04. Reporting Requirements. Furnish to the Bank: 
 Annual Financial Statement(s): as soon as available and not more than One Hundred Twenty (120) days after the end of each fiscal year of
Guarantor, balance sheets, statements of income, and retained earnings for the period ended and a statement of changes in financial position, on form(s) to be provided by the Bank, all in reasonable detail, and all prepared in accordance with GAAP
consistently applied; and, such financial statements must be of the following quality or better: Audited. 
  

 - 2 - 

 

 
 LOAN AGREEMENT 
 Quarterly Financial Statements: As soon as available and not more than Forty Five (45) days after the end of each quarter balance sheets,
statements of income, cash flow, and retained earnings for the period ended and a statement of changes in the financial position, all in reasonable detail, and all prepared in accordance with GAAP consistently applied and certified as true and
correct by an officer, general partner or manager (or member(s)) of the Borrower, as appropriate 
 Notice of Litigation: Promptly
after the receipt by Guarantor, or by Borrower of which Guarantor has knowledge, of notice of any action, suit, and proceeding before any court or governmental agency of any type which, if determined adversely, could have a material adverse effect
on the financial condition, properties, or operations of the Guarantor or Borrower, as appropriate. 
 4.05.Transfer of Ownership. Not, without the
prior written consent of the Bank: If Guarantor is a corporation, (a) issue, transfer or sell any new class of stock, or (b) issue, transfer or sell, in the aggregate, from its treasury stock and/or currently authorized but unissued shares
of any class of stock, more than 10% of the total number of all such issued and outstanding shares as of the date of this Agreement; or, if Guarantor is a general partnership, limited partnership, limited liability partnership or limited liability
company, issue, transfer or sell any interest in Guarantor. 
 4.06.Tax Returns: As soon as available each year, furnish complete copies (including
all schedules) of all state and federal tax returns filed by Guarantor. 
 4.07.Other Information: Furnish such other information as the Bank may from
time to time reasonably request. 
 Section 5 Financial Covenants 
 The Guarantor covenants and agrees that from the date hereof until payment in full of all indebtedness and the performance of all obligations under the Loan Documents, the Guarantor shall at all times maintain the
following financial covenants and ratios all in accordance with GAAP unless otherwise specified: 
 Retained earnings shall exceed Six Million
Five Hundred Thousand dollars ($6,500,000) at all times. 
 Ratio of Long Term Debt to Total Capitalization shall not exceed Sixty-five
percent (65%). 
 Covenant Compliance Certificate shall be prepared and submitted to Bank annually. 
 Section 6 Negative Covenants 
 The Borrower covenants and agrees
that from the date hereof and until payment in full of all indebtedness and performance of all obligations under the Loan Documents, the Borrower shall not, without the prior written consent of the Bank: 
 6.01. Liens. Create, incur, assume, or suffer to exist any lien upon or with respect to the Mortgaged Property, any of Borrower’s properties,
or the properties of any Pledgor securing payment of the Loan, now owned or hereafter acquired, except: 
  

	 	(a)	Liens and security interests in favor of the Bank; 

  

	 	(b)	Liens for taxes not yet due and payable or otherwise being contested in good faith and for which appropriate reserves are maintained; 

  

	 	(c)	Other liens imposed by law not yet due and payable, or otherwise being contested in good faith and for which appropriate reserves are maintained; 

  

	 	(d)	purchase money security interests on any property hereafter acquired, provided that such lien shall attach only to the property acquired. 

 6.02. Change of Legal Form of Business; Purchase of Assets. Change Borrower’s name or the legal form of Borrower’s business as shown
above, whether by merger, consolidation, conversion or otherwise, and Borrower shall not purchase all or substantially all of the assets or business of any Person. 
 6.03. Disposition of Assets. Sell, lease, or otherwise dispose of any of its assets or properties except in the ordinary and usual course of its business. 
 6.04. Transfer of Ownership. If Borrower is a corporation, (a) issue, transfer or sell any new class of stock, or (b) issue, transfer or
sell, other than through the Borrower’s Dividend Reinvestment Plan, in the aggregate, from its treasury stock and/or currently authorized but unissued shares of any class of stock, more than 10% of the total number of all such issued and
outstanding shares as of the date of this Agreement. If Borrower is a general partnership, limited partnership, limited liability partnership or limited liability company, issue, transfer or sell any interest in Borrower. 
 6.05. Negative Covenants from other Loan Documents. All negative covenants contained in any Deed of Trust, Security Agreement, Assignment of
Leases or Rents, or other security document executed by the Borrower which are described in Section I hereof are hereby incorporated by reference herein. 
 Section 7 Hazardous Materials and Compliance with Environmental Laws 
 7.01. Investigation. Borrower hereby
certifies that it has exercised due diligence to ascertain whether its real property, including without limitation the Mortgaged Property, is or has been affected by the presence of asbestos, oil, petroleum or other hydrocarbons, urea formaldehyde,
PCBs, hazardous or nuclear waste, toxic chemicals and substances, or other hazardous materials (collectively, “Hazardous Materials”), as defined in applicable Environmental Laws. Borrower represents and warrants that there are no such
Hazardous Materials contaminating its real property, nor have any such materials been released on or stored on or improperly disposed of on its real property during its ownership, occupancy or operation thereof. Borrower hereby agrees that, except
in strict compliance with applicable Environmental Laws, it shall not knowingly permit any release, storage or contamination as long as any indebtedness or obligations to Bank under the Loan Documents remains unpaid or unfulfilled. In addition,
Borrower does not have or use any underground storage tanks on any of its real property, including the Mortgaged Property which are not registered with the appropriate Federal and/or State agencies and which are not properly equipped and maintained
in accordance with all Environmental Laws. If requested by Bank, Borrower shall provide Bank with all necessary and reasonable assistance required for purposes of determining the existence of Hazardous Materials on the Mortgaged Property, including
allowing Bank access to the Mortgaged Property, and access to Borrower’s employees having knowledge of, and to files and records within Borrower’s control relating to the existence, storage, or release of Hazardous Materials on the
Mortgaged Property. 
 7.02. Compliance. Borrower agrees to comply with all applicable Environmental Laws, including, without
limitation, all those relating to Hazardous Materials. Borrower further agrees to provide Bank, and all appropriate Federal and State authorities, with immediate notice in writing of any release of Hazardous Materials on the Mortgaged Property and
to pursue diligently to completion all appropriate and/or required remedial action in the event of such release. 
 7.03. Remedial Action.
Bank shall have the right, but not the obligation, to undertake all or any part of such remedial action in the event of a release of Hazardous Materials on the Mortgaged Property and to add any expenditures so made to the principal indebtedness
secured by the Deed(s) of Trust. Borrower agrees to indemnify and hold Bank harmless from any and all loss or liability arising out of any violation of the representations, covenants, and obligations contained in this Section 7, or resulting
from the recording of the Deed(s) of Trust. 
 Section 8 Events of Default 
 The following shall be “Events of Default” by Borrower or any Guarantor: 
 8.01. Thc failure
to make prompt payment of any installment of principal or interest on any of the Note(s) when due or payable. 
 8.02. Should any
representation or warranty made in the Loan Documents prove to be false or misleading in any material respect. 
 8.03. Should any report,
certificate, financial statement, or other document furnished prior to the execution of or pursuant to the terms of this Agreement prove to be false or misleading in any material respect. 
  

 - 3 - 

 

 
 LOAN AGREEMENT 
 8.04. Should the Borrower or any Guarantor default on the performance of any other obligation of indebtedness when due or in the performance of any obligation incurred in connection with money borrowed. 
 8.05. Should the Borrower, any Guarantor or any Pledgor breach any covenant, condition, or agreement made under any of the Loan Documents. 
 8.06. Should a custodian be appointed for or take possession of any or all of the assets of the Borrower or any Guarantor, or should the Borrower or any
Guarantor either voluntarily or involuntarily become subject to any insolvency proceeding, including becoming a debtor under the United States Bankruptcy Code, any proceeding to dissolve the Borrower or any Guarantor, any proceeding to have a
receiver appointed, or should the Borrower or any Guarantor make an assignment for the benefit of creditors, or should there be an attachment, execution, or other judicial seizure of all or any portion of the Borrower’s or any Guarantor’s
assets, including an action or proceeding to seize any funds on deposit with the Bank, and such seizure is not discharged within 30 days. 
 8.07. Should final judgment for the payment of money be rendered against the Borrower or any Guarantor which is not covered by insurance and shall remain undischarged for a period of 30 days unless such judgment or execution thereon be
effectively stayed. 
 8.08. Upon the death of, or termination of existence of, or dissolution of, any Borrower, Pledgor or Guarantor.

 8.09. Should the Bank in good faith deem itself, its liens and security interests, if any, or any debt thereunder unsafe or insecure, or
should the Bank believe in good faith that the prospect of payment of any debt or other performance by the Borrower or any Guarantor is impaired. 
 8.10. Should any lien or security interest granted to Bank to secure payment of the Note(s) terminate, fail for any reason to have the priority agreed to by Bank on the date granted, or become unperfected or invalid for any reason.

 Section 9 Remedies Upon Default 
 Upon the
occurrence of any of the above listed Events of Default, the Bank may at any time thereafter, at its option, take any or all of the following actions, at the same or at different times: 
 9.01. Declare the balance(s) of the Note(s) to be immediately due and payable, both as to principal and interest, late fees, and all other
amounts/expenditures without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by Borrower and each Guarantor, and such balance(s) shall accrue interest at the Default Rate as provided herein until paid in
full; 
 9.02. Require the Borrower or Guarantor(s) to pledge additional collateral to the Bank from the Borrower’s or any
Guarantor’s assets and properties, the acceptability and sufficiency of such collateral to be determined in the Bank’s sole discretion; 
 9.03. Take immediate possession of and foreclose upon any or all collateral which may be granted to the Bank as security for the indebtedness and obligations of Borrower or any Guarantor under the Loan Documents; 
 9.04. Exercise any and all other rights and remedies available to the Bank under the terms of the Loan Documents and applicable law, including the
Virginia Uniform Commercial Code; 
 9.05. Any obligation of the Bank to advance funds to the Borrower or any other Person under the terms of
under the Note(s) and all other obligations, if any, of the Bank under the Loan Documents shall immediately cease and terminate unless and until Bank shall reinstate such obligation in writing. 
 Section 10 Miscellaneous Provisions 
 10.01.
Definitions. 
 “Default Rate” shall mean a rate of interest equal to Bank’s Prime Rate plus five
percent (5%) per annum (not to exceed the legal maximum rate) from and after the date of an Event of Default hereunder which shall apply, in the Bank’s sole discretion, to all sums owing, including principal and interest, on such date.

 “Environmental Laws” shall mean all applicable federal and state laws and regulations which affect or may
affect the Mortgaged Property, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. Sections 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.),
the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Virginia Waste Management Act (Sections
10.1-1400 through 1457 of the Code of Virginia, The Chesapeake Bay Preservation Act (Sections 10.1-2100 through 10.1-2115), Storage Tanks Section 62.4-44.34:8 et seq., and all other state and local laws protecting the environment and dealing
with the release and disposal of hazardous waste and materials, as such laws or regulations have been amended or may be amended. “Loan Documents” shall mean this Agreement including any schedule attached hereto, the Note(s), the
Deed(s) of Trust, the Mortgage(s), the Security Agreement(s), the Assignment(s) of Leases and Rents, all UCC Financing Statements, the Guaranty Agreement(s), and all other documents, certificates, and instruments executed in connection therewith,
and all renewals, extensions, modifications, substitutions, and replacements thereto and therefore. 
 “Person” shall mean an individual, partnership, corporation, trust, unincorporated organization, limited liability company, limited liability partnership, association, joint venture, or a government agency or political
subdivision thereof. 
 “GAAP” shall mean generally accepted accounting principles as established by the
Financial Accounting Standards Board or the American Institute of Certified Public Accountants, as amended and supplemented from time to time. 
 “Prime Rate” shall mean the rate of interest per annum announced by the Bank from time to time and adopted as its Prime Rate, which is one of several rate indexes employed by the Bank when extending
credit, and may not necessarily be the Bank’s lowest lending rate. 
 10.02. Non-impairment. If any one or more provisions
contained in the Loan Documents shall be held invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained therein shall not in any way be affected or impaired thereby and shall
otherwise remain in full force and effect. 
 10.03. Applicable Law. The Loan Documents shall be construed in accordance with and
governed by the laws of the Commonwealth of Virginia. 
 10.04. Waiver. Neither the failure or any delay on the part of the Bank in
exercising any right, power or privilege granted in the Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise of any other right, power, or privilege which may be
provided by law. 
 10.05. Modification. No modification, amendment, or waiver of any provision of any of the Loan Documents shall be
effective unless in writing and signed by the Borrower and Bank. 
 10.06. Payment Amount Adjustment. In the event that any Loan(s)
referenced herein has a variable (floating) interest rate and the interest rate increases, Bank, at its sole discretion, may at any time adjust the Borrower’s payment amount(s) to prevent the amount of interest accrued in a given period to
exceed the periodic payment amount or to cause the Loan(s) to be repaid within the same period of time as originally agreed upon. 
 10.07
Stamps and Fees. The Borrower shall pay all federal or state stamps, taxes, or other fees or charges, if any are payable or are determined to be payable by reason of the execution, delivery, or issuance of the Loan Documents or any security
granted to the Bank; and the Borrower and Guarantor agree to indemnify and hold harmless the Bank against any and all liability in respect thereof. 
 10.08. Attorneys’ Fees. In the event the Borrower or any Pledgor or Guarantor shall default in any of its obligations hereunder and the Bank believes it necessary to employ an attorney to assist in the enforcement or collection
of the indebtedness of the Borrower to the Bank, to enforce the terms and provisions of the Loan Documents, to modify the Loan Documents, or in the event the Bank voluntarily or otherwise should become a party to any suit or legal proceeding
(including a proceeding conducted under the Bankruptcy Code), the Borrower and Guarantors agree to pay the reasonable attorneys’ fees of the Bank and all related costs of collection or enforcement that may be incurred by the Bank. The Borrower
and Guarantor shall be liable for such attorneys’ fees and costs whether or not any suit or proceeding is actually commenced. 
  

 - 4 - 

 

 
 LOAN AGREEMENT 
 10.09. Bank Making Required Payments. In the event Borrower shall fail to maintain insurance, pay taxes or assessments, costs and expenses which
Borrower is, under any of the terms hereof or of any Loan Documents, required to pay, or fail to keep any of the properties and assets constituting collateral free from new security interests, liens, or encumbrances, except as permitted herein, Bank
may at its election make expenditures for any or all such purposes and the amounts expended together with interest thereon at the Default Rate, shall become immediately due and payable to Bank, and shall have benefit of and be secured by the
collateral; provided, however, the Bank shall be under no duty or obligation to make any such payments or expenditures. 
 10.10. Right of
Offset. Any indebtedness owing from Bank to Borrower may be set off and applied by Bank on any indebtedness or liability of Borrower to Bank, at any time and from time to time after maturity, whether by acceleration or otherwise, and without
demand or notice to Borrower. Bank may sell participations in or make assignments of any Loan made under this Agreement, and Borrower agrees that any such participant or assignee shall have the same right of setoff as is granted to the Bank herein.

 10.11. UCC Authorization. Borrower authorizes Bank to file such UCC Financing Statements describing the collateral in any location
deemed necessary and appropriate by Bank. 
 10.12. Modification and Renewal Fees. Bank may, at its option, charge any fees for
modification, renewal, extension, or amendment of any terms of the Note(s) permitted by law. 
 10.13. Conflicting Provisions. If
provisions of this Agreement shall conflict with any terms or provisions of any of the Note(s) or security document(s) or any schedule attached hereto, the provisions of such Note(s) or security document(s) or any schedule attached hereto, as
appropriate, shall take priority over any provisions in this Agreement. 
 10.14. Notices. Any notice permitted or required by the
provisions of this Agreement shall be deemed to have been given when delivered in writing to the City Executive or any Vice President of the Bank at its offices in Roanoke, Virginia, and to the Vice President and Secretary of the Borrower at its
offices in Roanoke, Virginia when sent by certified mail and return receipt requested. 
 10.15. Consent to Jurisdiction. Borrower
hereby irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement may be instituted in the Circuit Court of Fairfax County, Virginia, or the United States District Court for the Eastern District of Virginia,
or in such other appropriate court and venue as Bank may choose in its sole discretion. Borrower consents to the jurisdiction of such courts and waives any objection relating to the basis for personal or in rem jurisdiction or to venue which
Borrower may now or hereafter have in any such legal action or proceedings. 
 10.16. Counterparts. This Agreement may be executed by
one or more parties on any number of separate counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument. 
 10.17. Entire Agreement. The Loan Documents embody the entire agreement between Borrower and Bank with respect to the Loans, and there are no oral or parol agreements existing between Bank and Borrower with
respect to the Loans which are not expressly set forth in the Loan Documents. 
 10.18. Indemnification. The Borrower and the Guarantor
hereby jointly and severally agree to and do hereby indemnify and defend the Bank, its affiliates, their successors and assigns and their respective directors, officer, employees and shareholders, and do hereby hold each of them harmless from and
against, any loss, liability, lawsuit, proceeding, cost expense or damage (including reasonable in-house and outside counsel fees, whether suit is brought or not) arising from or otherwise relating to the closing, disbursement, administration, or
repayment of the Loans, including without limitation: (i) the failure to make any payment to the Bank promptly when due, whether under the Notes evidencing the Loans or otherwise; (ii) the breach of any representations or warranties to the
Bank contained in this agreement or in any other loan documents now or hereafter executed in connection with the Loans; or (iii) the violation of any covenants or agreements made for the benefit of the Bank and contained in any of the loan
documents; provided, however, that the foregoing indemnification shall not be deemed to cover any loss which is finally determined by a court of competent jurisdiction to result solely from the Bank’s gross negligence or willful misconduct.

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

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 LOAN AGREEMENT 
 SIGNATURE PAGE 
 IN
WITNESS WHEREOF, the Bank, Borrower and Guarantor(s) have caused this Agreement to be duly executed under seal all as of the date first above written. 
 Borrower is a Corporation: 
  

							
	Witness:	    		 		 	
		    		 	 Roanoke Gas Company
	 	
		    		 	Name of Corporation	 	
				
	/s/ Amanda Minton	    	By:	 	 

	 	(SEAL)
		    		 	Enter Name	 	
		    	Title:	 	Chairman, President, & CEO	 	
				
	/s/ Amanda Minton	    	By:	 	 /s/ Dale P. Lee
	 	(SEAL)
		    		 	Enter Name	 	
		    	Title:	 	Vice President & Corp Secretary	 	
		    		 	Enter Name	 	
	
	Additional Co-Borrowers or Guarantors:
				
	WITNESS:	    		 		 	
				
	/s/ Amanda Minton	    		 	 

	 	(SEAL)
		    		 	RGC Resources Inc.	 	
				
	/s/ Amanda Minton	    		 	 /s/ Dale P. Lee
	 	(SEAL)
		    		 	Enter Name	 	
		    		 	  
	 	(SEAL)
		    		 	Enter Name	 	
		    		 	  
	 	(SEAL)
		    		 	Enter Name	 	
			
	WITNESS:	    	 BRANCH BANKING AND TRUST COMPANY
	 	
			
	/s/ Amanda Minton	    	By:	 	 /s/ J. Graham Leonard, III

		    		 	J. Graham Leonard, III
		    	Title:	 	Senior Vice President

  

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