Exhibit
10.1
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COMMERCIAL
LINE OF CREDIT
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Community
Bank N.A.
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AGREEMENT
AND NOTE
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331
West Pulteney Street
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Corning,
New York 14830
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LOAN
PURPOSE: Working Capital
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BORROWER
INFORMATION
Corning
Natural Gas Corporation
330
William Street, P. 0. 58
Coming,
NY 14830-0058
LINE
OF CREDIT AGREEMENT AND NOTE. This
Commercial Line of Credit Agreement and Note will be referred to in
this document as the "Agreement."
LENDER.
"Lender"
means Community Bank N.A. whose address is 331 West Pulteney
Street, Coming, New York 14830, its successors and
assigns.
BORROWER.
"Borrower"
means each person or legal entity who signs this
Agreement.
PROMISE
TO PAY. For
value received, receipt of which is hereby acknowledged, the
Borrower promises to pay, on demand by Lender, the principal amount
of Eight Million and 00/100 Dollars ($8,000,000.00) or such lesser
amount as shall have been advanced by Lender, from time to time, to
or on behalf of Borrower under this Agreement, and all interest and
any other charges, including service charges, to the order of
Lender at its office at the address noted above or at such other
place as Lender may designate in writing. The Borrower
will make all payments in lawful money of the United States of
America.
PAYMENT
SCHEDULE. This
Agreement will be paid according to the following required payment
schedule: Beginning on January 1, 2009, monthly payments of accrued
and unpaid interest. All payments received by the Lender from the
Borrower for application to the Line of Credit may be applied to
the Borrower’s obligations under the Line of Credit in such
order as determined by the Lender.
INTEREST
RATE AND SCHEDULED PAYMENT CHANGES. The
initial variable interest rate on this Agreement will be 3.261% per
annum. This interest rate may change on January 1, 2009,
and on the same day of each month thereafter. Each date
on which the interest rate may change is called the "Change
Date." Beginning with the first Change Date, Lender will
calculate the new interest rate based on One Month Libor Rate in
effect on the Change Date (the "Index") plus 1.350 percentage
points (the "Margin"). If the Index is not available at
that time, Lender will choose a new Index which is based on
comparable information. The Index is used solely to
establish a base from which the actual rate of interest payable
under this Agreement will be calculated, and is not a reference to
any actual rate of interest charged by any lender to any particular
borrower.
Nothing
contained herein shall be construed as to require the Borrower to
pay interest at a greater rate than the maximum allowed by
law. If, however, from any circumstances, Borrower pays
interest at a greater rate than the maximum allowed by law, the
obligation to be fulfilled will be reduced to an amount computed at
the highest rate of interest permissible under applicable law and
if, for any reason whatsoever, Lender ever receives interest in an
amount which would be deemed unlawful under applicable law, such
interest shall be automatically applied to amounts owed, in
Lender's sole discretion, or as otherwise allowed by applicable
law. An increase in the interest rates will result in a
higher payment amount. Interest on this Agreement is
calculated on a 365/360 day basis. The unpaid balance of
this loan shall, after an Event of Default exists under this
Agreement or any other agreement related to the loan, be subject to
a Default Rate of interest equal to 2.000 percentage points over
the applicable variable interest rate in effect from time to time,
calculated as described above in the section "Interest
Rate."
LATE
PAYMENT CHARGE. If
any required payment is more than 10 days late, then at Lender's
option, Lender will assess a late payment charge of $25.00 or 5% of
the amount past due, whichever is greater.
LINE
OF CREDIT TERMS. This
Agreement is discretionary. The Borrower acknowledges
and agrees that although the Borrower may from time to time request
an advance under this Agreement up to a maximum amount equal to the
Line of Credit Limit, the Lender in no way is obligated to make
such advance and all advances will be made by Lender in its sole
and absolute discretion and subject to the terms and conditions of
this Agreement.
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Advances
under this Agreement may be requested orally or in writing by the
Borrower or by an authorized person.
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The
total of all advances requested and unpaid principal cannot exceed
Eight Million and 00/100 Dollars ($8,000,000.00).
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All
advances made will be charged to a loan account in Borrowers name
on Lender's books, and the Lender shall debit such account the
amount of each advance made to, and credit to such account the
amount of each repayment made by Borrower. Lender shall provide to
Borrower periodic statements of Borrower's loan account, which
shall be deemed to be correct, accepted by, and binding upon
Borrower unless Lender receives a written statement of exception
from Borrower within 10 days after such statement is
furnished.
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Suspension
and Termination. Advances
under this Agreement will be available until the earlier to occur
of (a) demand by the Lender; (b) the Line of Credit is cancelled by
Borrower; or (c) the occurrence of an Event of Default.
Loan
Type Conversion. Provided
no default or event of default shall have occurred, the Borrower
may, at its option, apply for conversion of this Agreement into a
Term loan 30 days prior to the Maturity Date. However, the Lender
shall have no obligation to approve the Borrower's
application.
SECURITY
TO NOTE. Security
(the "Collateral") for this Agreement is granted pursuant to the
following security document(s):
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Security
Agreement - all business assets dated August 4, 2005.
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Security
Agreement - assignment of trust fund dated November 28,
2005.
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RIGHT
OF SET-OFF. To
the extent permitted by law, Borrower agrees that Lender has the
right to set-off any amount due and payable under this Agreement,
whether matured or unmatured, against any amount owing by Lender to
Borrower including any or all of Borrower's accounts with Lender.
This shall include all accounts Borrower holds jointly with someone
else and all accounts Borrower may open in the future. Such right
of set-off may be exercised by Lender against Borrower or against
any assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor of Borrower, or against anyone else
claiming through or against Borrower of such assignee for the
benefit of creditors, receiver, or execution, judgment or
attachment creditor, notwithstanding the fact that such right of
set-off has not been exercised by Lender prior to the making,
filing or issuance or service upon Lender of, or of notice of,
assignment for the benefit of creditors, appointment or application
for the appointment of a receiver, or issuance of
execution, subpoena or order or warrant.
PAYABLE
ON DEMAND. This
is a demand note. Payment is due upon Lender's
demand.
DEFAULT.
Upon
the occurrence of any one of the following events (each, an "Event
of Default" or "default" or "event of default"), Lender's
obligations, if any
