<SUBMISSION>
<ACCESSION-NUMBER>0000906504-05-000007
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20050330
<ITEMS>1.01
<ITEMS>9.01
<FILING-DATE>20050401
<DATE-OF-FILING-DATE-CHANGE>20050331
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>RGC RESOURCES INC
<CIK>0001069533
<ASSIGNED-SIC>4923
<IRS-NUMBER>541909697
<STATE-OF-INCORPORATION>VA
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-26591
<FILM-NUMBER>05722223
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>519 KIMBALLAVENUE N.E.
<CITY>ROANOKE
<STATE>VA
<ZIP>24016
<PHONE>5407774427
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>519 KIMBALL AVENUE N.E.
<CITY>ROANOKE
<STATE>VA
<ZIP>24016
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>frm8k0305full.txt
<DESCRIPTION>FORM 8-K FOR MARCH 2005
<TEXT>
-------------------------------------------------------------------------------

                             SECURITIES AND EXCHANGE
                                   COMMISSION
                             Washington, D.C. 20549
                                  ____________

                                    FORM 8-K
                                  ____________

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of Earliest Event Reported): March 29, 2005
                                  ____________

                               RGC RESOURCES, INC.
             (Exact name of Registrant as specified in its charter)
                                  ____________

             Virginia              000-26591                54-1909697
         (State or other          (Commission              (IRS Employer
         jurisdiction of          File Number)             Identification No.)
         incorporation)

            519 Kimball Ave., N.E.
               Roanoke, Virginia                       24016
      (Address of principal executive offices)       (Zip Code)

          Registrant's telephone number, including area code: 540-777-4427

          (Former name or former address, if changed since last report)

-------------------------------------------------------------------------------

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

|_|  Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 240.425)

|_|  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

|_|  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

|_|  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))

-------------------------------------------------------------------------------
<PAGE>



ITEM 1.01.     ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

               On March 29, 2005, RGC Resources, Inc. (the "Company"), entered
               into a Modification Number Two to Promissory Note in the original
               principal amount of $1,000,000, and its regulated natural gas
               subsidiaries, Roanoke Gas Company and Bluefield Gas Company, each
               entered into a new Promissory Note in the original principal
               amount of $20,000,000 and $5,000,000, respectively, each with
               Wachovia Bank, National Association, for the purpose of providing
               working capital financing for each company's operations. This
               Modification Number Two to Promissory Note and these Promissory
               Notes, a copy of each of which is being filed as an exhibit
               hereto, amend and replace similar expiring notes and each have an
               expiration date of March 31, 2006. The Modification Number Two to
               Promissory Note amends the underlying Promissory Note by
               extending its expiration by another year. The Promissory Notes
               for Roanoke Gas Company and Bluefield Gas Company represents
               increased principal amounts over the prior notes. The current
               line-of-credit arrangement with Wachovia Bank maintains the
               previous variable interest rates based upon 30-day LIBOR and a
               five-tier level for borrowing limits to accommodate seasonal
               borrowing demands. The five-tier approach minimizes the Company's
               borrowing costs by improving the level of utilization on its
               line-of-credit arrangement and providing greater credit
               availability as borrowing requirements increase.

               Total available limits under the new line-of-credit arrangement
               are as follows:


                                                       Available
                                  Beginning          Line of Credit
                              ------------------    ----------------

                              Mar 31, 2005          $   11,000,000
                              Jul 16, 2005              16,000,000
                              Sep 16, 2005              25,000,000
                              Nov 16, 2005              26,000,000
                              Feb 16, 2005              22,000,000



ITEM 9.01.     FINANCIAL STATEMENTS AND EXHIBITS.

EXHIBIT NO.    DESCRIPTION OF DOCUMENT

   10.1        Modification Number Two to Promissory Note in the original
               principal amount of $1,000,000 by and between RGC Resources, Inc.
               and Wachovia Bank, National Association dated March 29,
               2005.

   10.2        Promissory Note in the original principal amount of $20,000,000
               by and between Roanoke Gas Company and Wachovia Bank, National
               Association dated March 29, 2005.

   10.3        Promissory Note in the original principal amount of $5,000,000 by
               and between Bluefield Gas Company and Wachovia Bank, National
               Association dated March 29, 2005.




<PAGE>


                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                            RGC RESOURCES, INC.



                                            By s/Howard T. Lyon
                                               Howard T. Lyon
                                               Vice-President, Treasurer and
                                               Controller
                                               (Principal Financial Officer)



Date: March 31, 2005


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-9
<SEQUENCE>2
<FILENAME>frm8k0305ex101.txt
<DESCRIPTION>EXHIBIT 10.1 TO FORM 8-K FOR 3/2005
<TEXT>
                                                                  Exhibit 10.1

                             MODIFICATION NUMBER TWO
                               TO PROMISSORY NOTE

RGC Resources, Inc.
519 Kimball Avenue, NE
Roanoke, Virginia 24030
(Individually and collectively, "Borrower")

Wachovia Bank, National Association
201 S. Jefferson Street
Roanoke, Virginia 24011
(Hereinafter referred to as "Bank")

                                IMPORTANT NOTICE

THIS AGREEMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH
CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A BORROWER AND
ALLOWS BANK TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT FURTHER NOTICE.

THIS AGREEMENT is entered into as of March 29, 2005 by and between Bank and
Borrower.

                                    RECITALS

Bank is the holder of a Promissory Note executed and delivered by Borrower,
dated April 21, 2003, in the original principal amount of $1,000,000.00 (the
"Note"); Borrower and Bank have agreed to modify the terms of the Note. In
consideration of Bank's continued extension of credit and the agreements
contained herein, the parties agree as follows:

                                    AGREEMENT

ACKNOWLEDGMENT OF BALANCE. Borrower acknowledges that the most recent Commercial
Loan Invoice sent to Borrower with respect to the Obligations under the Note is
correct.

MODIFICATIONS.

The Note is hereby modified by deleting the provisions in the Note establishing
the repayment terms and substituting the following in their place and stead:

REPAYMENT TERMS. The Note shall be due and payable in consecutive monthly
payments of accrued interest only, commencing on April 1, 2005, and continuing
on the same day of each month thereafter until fully paid. In any event, all
principal and accrued interest shall be due and payable on March 31, 2006.

ACKNOWLEDGMENTS AND REPRESENTATIONS. Borrower acknowledges and represents that
the Note and other Loan Documents, as amended hereby, are in full force and
effect without any defense, counterclaim, right or claim of set-off; that, after
giving effect to this Agreement, no default or event that with the passage of
time or giving of notice would constitute a default under the Loan Documents has
occurred, all representations and warranties contained in the Loan Documents are
true and correct as of this date, all necessary action to authorize the
execution and delivery of this Agreement has been taken; and this Agreement is a
modification of an existing obligation and is not a novation.



<PAGE>



MISCELLANEOUS. This Agreement shall be construed in accordance with and governed
by the laws of the applicable state as originally provided in the Loan
Documents, without reference to that state's conflicts of law principles. This
Agreement and the other Loan Documents constitute the sole agreement of the
parties with respect to the subject matter thereof and supersede all oral
negotiations and prior writings with respect to the subject matter thereof. No
amendment of this Agreement, and no waiver of any one or more of the provisions
hereof shall be effective unless set forth in writing and signed by the parties
hereto. The illegality, unenforceability or inconsistency of any provision of
this Agreement shall not in any way affect or impair the legality,
enforceability or consistency of the remaining provisions of this Agreement or
the other Loan Documents. This Agreement and the other Loan Documents are
intended to be consistent. However, in the event of any inconsistencies among
this Agreement and any of the Loan Documents, the terms of this Agreement, and
then the Note, shall control. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts. Each such
counterpart shall be deemed an original, but all such counterparts shall
together constitute one and the same agreement. Terms used in this Agreement
which are capitalized and not otherwise defined herein shall have the meanings
ascribed to such terms in the Note. LIMITATION ON LIABILITY; WAIVER OF PUNITIVE
DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES
THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR
CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY
CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR
DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED
HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER
FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY
DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO
PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN
CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS
RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE. FINAL AGREEMENT.
This Agreement and the other Loan Documents represent the final agreement
between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.

Borrower reaffirms and restates the following with respect to the Note as
modified herein:

CONFESSION OF JUDGMENT. Each Borrower hereby constitutes and appoints John G.
Fox, Douglas A. Carson (each of whom is an officer of Bank), and Bank through an
officer duly authorized by Bank (any of the foregoing may act), as the true and
lawful attorneys-in-fact for them, in any or all of their names, place and
stead, and upon the occurrence of a Default in the payment of the Obligations
due under this Agreement, at maturity, or upon acceleration, to confess judgment
against them or any of them, in favor of Bank, before the Clerk of the Circuit
Court for City of Richmond, Virginia, in accordance with 1950 Code of Virginia,
Section 8.01-431 et seq., and any successor statute, for all amounts owed with
respect to the Obligations under and pursuant to this Agreement including,
without limitation, all costs of collection and attorneys' fees in an amount
equal to 15% of the Obligations then outstanding (which shall be deemed
reasonable attorneys' fees for the purposes of this paragraph), and court costs,
hereby ratifying and confirming the acts of said attorney-in-fact as if done by
themselves. Upon request of Bank, each Borrower will execute an amendment or
other agreement substituting attorneys-in-fact appointed to act for each
Borrower hereunder.

WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
BORROWER BY EXECUTION HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO
BE EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY

                                     Page 2

<PAGE>


WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO ACCEPT
THIS AGREEMENT. EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE
AND REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE
PARTIES CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT
HERETOFORE EXECUTED IN CONNECTION WITH, RELATED TO OR BEING REPLACED,
SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS AGREEMENT.

IN WITNESS WHEREOF, the undersigned have signed and sealed this Agreement the
day and year first above written.

                          RGC Resources, Inc.

                          By: s/John B. Williamson, III   (SEAL)
                                John B. Williamson, III, President/Chairman/CEO


                          By: s/Howard T. Lyon   (SEAL)
                                Howard T. Lyon, Controller/Treasurer




                          Wachovia Bank, National Association

                          By: s/Laurie Hart   (SEAL)
                                Laurie Hart, Vice President

Tracking #: 100053rke
CAT - Deal # 493483 Facility ID 336059

                                     Page 3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>frm8k0305ex102.txt
<DESCRIPTION>EXHIBIT 10.2 TO FORM 8-K FOR 3/2005
<TEXT>
                                                                   Exhibit 10.2

                                 PROMISSORY NOTE
$20,000,000.00
                                                                 March 29, 2005
Roanoke Gas Company
519 Kimball Avenue
Roanoke, Virginia 24016
(Individually and collectively "Borrower")

Wachovia Bank, National Association
201 S. Jefferson Street
Roanoke, Virginia 24011
(Hereinafter referred to as "Bank")

                                IMPORTANT NOTICE

THIS NOTE CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A WAIVER
OF IMPORTANT RIGHTS YOU MAY HAVE AS A BORROWER AND ALLOWS BANK TO OBTAIN A
JUDGMENT AGAINST YOU WITHOUT FURTHER NOTICE.

Borrower promises to pay to the order of Bank, in lawful money of the United
States of America, at its office indicated above or wherever else Bank may
specify, the sum of Twenty Million and No/100 Dollars ($20,000,000.00) or such
sum as may be advanced and outstanding from time to time, with interest on the
unpaid principal balance at the rate and on the terms provided in this
Promissory Note (including all renewals, extensions or modifications hereof,
this "Note").

RENEWAL/MODIFICATION/INCREASE. This Promissory Note renews, extends, increases
and/or modifies that certain Promissory Note dated March 22, 2004 (the "Original
Promissory Note"), evidencing an original principal amount of $19,000,000.00.
This Promissory Note is not a novation to the extent of the principal balance
currently outstanding under the Original Promissory Note.

LINE OF CREDIT. Borrower may borrow, repay and reborrow, and, upon the request
of Borrower, Bank shall advance and readvance under this Note from time to time
until the maturity hereof (each an "Advance" and together the "Advances"), so
long as the total principal balance outstanding under this Note at any one time
does not exceed (i) $14,000,000.00 from the date hereof through and including
March 30, 2005; (ii) beginning March 31, 2005 through and including July 15,
2005, the principal amount available for lending under this Note shall be
$6,000,000.00; (iii) beginning July 16, 2005 through and including September 15,
2005, the principal amount available for lending under this Note shall be
$11,000,000.00; (iv) beginning September 16, 2005 through and including November
15, 2005, the principal amount available for lending under this Note shall be
$19,000,000.00; (v) beginning November16, 2005 through and including February
15, 2006, the principal amount available for lending under this Note shall be
$20,000,000.00, (vi) beginning February 16, 2006 through and including March 31,
2006,the principal amount available for lending under this Note shall be
$16,000,000.00. Bank's obligation to make Advances under this Note shall
terminate if Borrower is in Default. As of the date of each proposed Advance,
Borrower shall be deemed to represent that each representation made in the Loan
Documents is true as of such date.

If Borrower subscribes to Bank's cash management services and such services are
applicable to this line of credit, the terms of such service shall control the
manner in which funds are transferred between the applicable demand deposit
account and the line of credit for credit or debit to the line of credit.




<PAGE>



USE OF PROCEEDS. Borrower shall use the proceeds of the loan(s) evidenced by
this Note for the commercial purposes of Borrower, as follows: for working
capital.

INTEREST RATE. Interest shall accrue on the unpaid principal balance of this
Note from the date hereof at the LIBOR Market Index Rate plus 0.5%, as that rate
may change from day to day in accordance with changes in the LIBOR Market Index
Rate ("Interest Rate"). "LIBOR Market Index Rate", for any day, means the rate
for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00
a.m., London time, on such day, or if such day is not a London business day,
then the immediately preceding London business day (or if not so reported, then
as determined by Bank from another recognized source or interbank quotation).

DEFAULT RATE. In addition to all other rights contained in this Note, if a
Default (as defined herein) occurs and as long as a Default continues, all
outstanding Obligations, other than Obligations under any swap agreements (as
defined in 11 U.S.C. Section 101, as in effect from time to time) between
Borrower and Bank or its affiliates, shall bear interest at the Interest Rate
plus 3% ("Default Rate"). The Default Rate shall also apply from acceleration
until the Obligations or any judgment thereon is paid in full.

INTEREST AND FEE(S) COMPUTATION (ACTUAL/360). Interest and fees, if any, shall
be computed on the basis of a 360-day year for the actual number of days in the
applicable period ("Actual/360 Computation"). The Actual/360 Computation
determines the annual effective interest yield by taking the stated (nominal)
rate for a year's period and then dividing said rate by 360 to determine the
daily periodic rate to be applied for each day in the applicable period.
Application of the Actual/360 Computation produces an annualized effective rate
exceeding the nominal rate.

REPAYMENT TERMS. This Note shall be due and payable in consecutive monthly
payments of accrued interest only, commencing on April 1, 2005, and continuing
on the same day of each month thereafter until fully paid. In any event, all
principal and accrued interest shall be due and payable on March 31, 2006.

AUTOMATIC DEBIT OF CHECKING ACCOUNT FOR LOAN PAYMENT. Borrower authorizes Bank
to debit demand deposit account number 2001005287087 or any other account with
Bank (routing number 051400549) designated in writing by Borrower, beginning
April 1, 2005, for any payments due under this Note. Borrower further certifies
that Borrower holds legitimate ownership of this account and preauthorizes this
periodic debit as part of its right under said ownership.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations shall be applied to accrued interest and then
to principal. If a Default occurs, monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank. If any payment received by Bank
under this Note or other Loan Documents is rescinded, avoided or for any reason
returned by Bank because of any adverse claim or threatened action, the returned
payment shall remain payable as an obligation of all persons liable under this
Note or other Loan Documents as though such payment had not been made.

DEFINITIONS. LOAN DOCUMENTS. The term "Loan Documents", as used in this Note and
the other Loan Documents, refers to all documents executed in connection with or
related to the loan evidenced by this Note and any prior notes which evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued pursuant to any loan agreement to which this Note is subject, any
applications for such letters of credit and any other documents executed in
connection therewith or related thereto, and may include, without limitation, a
commitment letter that survives closing, a loan agreement, this Note, guaranty
agreements, security agreements, security instruments, financing statements,
mortgage instruments, any renewals or modifications, whenever any of the
foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C. Section 101, as in effect from time to time). OBLIGATIONS. The term
"Obligations", as used in this Note and the other Loan Documents, refers to any
and all indebtedness and other obligations under this Note, all other
obligations under any other Loan Document(s), and all obligations under any swap
agreements (as defined in 11 U.S.C. Section 101, as in effect

                                     Page 2

<PAGE>



from time to time) between Borrower and Bank, or its affiliates, whenever
executed. CERTAIN OTHER TERMS. All terms that are used but not otherwise defined
in any of the Loan Documents shall have the definitions provided in the Uniform
Commercial Code.

LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to 5% of each payment past due for 8 or more days. This
late charge shall not apply to payments due at maturity or by acceleration
hereof, unless such late payment is in an amount not greater than the highest
periodic payment due hereunder. Acceptance by Bank of any late payment without
an accompanying late charge shall not be deemed a waiver of Bank's right to
collect such late charge or to collect a late charge for any subsequent late
payment received.

ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Obligations
including, without limitation, reasonable arbitration, paralegals', attorneys'
and experts' fees and expenses, whether incurred without the commencement of a
suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.

USURY. If at any time the effective interest rate under this Note would, but for
this paragraph, exceed the maximum lawful rate, the effective interest rate
under this Note shall be the maximum lawful rate, and any amount received by
Bank in excess of such rate shall be applied to principal and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.

DEFAULT. If any of the following occurs, a default ("Default") under this Note
shall exist: NONPAYMENT; NONPERFORMANCE. The failure of timely payment or
performance of the Obligations or Default under this Note or any other Loan
Documents. FALSE WARRANTY. A warranty or representation made or deemed made in
the Loan Documents or furnished Bank in connection with the loan evidenced by
this Note proves materially false, or if of a continuing nature, becomes
materially false. CROSS DEFAULT. At Bank's option, any default in payment or
performance of any obligation under any other loans, contracts or agreements of
Borrower, any Subsidiary or Affiliate of Borrower, any general partner of or the
holder(s) of the majority ownership interests of Borrower with Bank or its
affiliates ("Affiliate" shall have the meaning as defined in 11 U.S.C. Section
101, as in effect from time to time, except that the term "Borrower" shall be
substituted for the term "Debtor" therein; "Subsidiary" shall mean any business
in which Borrower holds, directly or indirectly, a controlling interest).
CESSATION; BANKRUPTCY. The death of, appointment of a guardian for, dissolution
of, termination of existence of, loss of good standing status by, appointment of
a receiver for, assignment for the benefit of creditors of, or commencement of
any bankruptcy or insolvency proceeding by or against Borrower, its Subsidiaries
or Affiliates, if any, or any general partner of or the holder(s) of the
majority ownership interests of Borrower, or any party to the Loan Documents.
MATERIAL CAPITAL STRUCTURE OR BUSINESS ALTERATION. Without prior written consent
of Bank, (i) a material alteration in the kind or type of Borrower's business or
that of Borrower's Subsidiaries or Affiliates, if any; (ii) the sale of
substantially all of the business or assets of Borrower, any of Borrower's
Subsidiaries or Affiliates or any guarantor, or a material portion (10% or more)
of such business or assets if such a sale is outside the ordinary course of
business of Borrower, or any of Borrower's Subsidiaries or Affiliates or any
guarantor, or more than 50% of the outstanding stock or voting power of or in
any such entity in a single transaction or a series of transactions; (iii) the
acquisition of substantially all of the business or assets or more than 50% of
the outstanding stock or voting power of any other entity; or (iv) should any
Borrower or any of Borrower's Subsidiaries or Affiliates or any guarantor enter
into any merger or consolidation. MATERIAL ADVERSE CHANGE. Bank determines in
good faith, in its sole discretion, that the prospects for payment or
performance of the Obligations are impaired or there has occurred a material
adverse change in the business or prospects of Borrower, financial or otherwise.

REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan
Documents, Bank may at any time thereafter, take the following actions: BANK
LIEN. Foreclose its security interest or lien against Borrower's accounts
without notice. ACCELERATION UPON DEFAULT. Accelerate the maturity of this Note
and, at Bank's option, any or all other Obligations, other than Obligations
under any swap agreements (as

                                     Page 3

<PAGE>



defined in 11 U.S.C. Section 101, as in effect from time to time) between
Borrower and Bank, or its affiliates, which shall be due in accordance with and
governed by the provisions of said swap agreements; whereupon this Note and the
accelerated Obligations shall be immediately due and payable; provided, however,
if the Default is based upon a bankruptcy or insolvency proceeding commenced by
or against Borrower or any guarantor or endorser of this Note, all Obligations
(other than Obligations under any swap agreement as referenced above) shall
automatically and immediately be due and payable. CUMULATIVE. Exercise any
rights and remedies as provided under the Note and other Loan Documents, or as
provided by law or equity.

ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 90 days
after the close of each fiscal year, unaudited management-prepared financial
statements reflecting its operations during such fiscal year, including, without
limitation, a balance sheet, profit and loss statement and statement of cash
flows, with supporting schedules and in reasonable detail, prepared in
conformity with generally accepted accounting principles, applied on a basis
consistent with that of the preceding year. If unaudited statements are
required, such statements shall be certified as to their correctness by a
principal financial officer of Borrower.

FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time, including without limitation,
financial statements and information pertaining to Borrower's financial
condition. Such information shall be true, complete, and accurate.

CONFESSION OF JUDGMENT. Each Borrower hereby constitutes and appoints John G.
Fox, Douglas A. Carson (each of whom is an officer of Bank), and Bank through an
officer duly authorized by Bank (any of the foregoing may act), as the true and
lawful attorneys-in-fact for them, in any or all of their names, place and
stead, and upon the occurrence of a Default in the payment of the Obligations
due under this Note, at maturity, or upon acceleration, to confess judgment
against them or any of them, in favor of Bank, before the Clerk of the Circuit
Court for City of Richmond, Virginia, in accordance with 1950 Code of Virginia,
Section 8.01-431 et seq., and any successor statute, for all amounts owed with
respect to the Obligations under and pursuant to this Note including, without
limitation, all costs of collection and attorneys' fees in an amount equal to
15% of the Obligations then outstanding (which shall be deemed reasonable
attorneys' fees for the purposes of this paragraph), and court costs, hereby
ratifying and confirming the acts of said attorney-in-fact as if done by
themselves. Upon request of Bank, each Borrower will execute an amendment or
other agreement substituting attorneys-in-fact appointed to act for each
Borrower hereunder.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan Documents shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same Default on a future occasion. Neither the failure nor any
delay on the part of Bank in exercising any right, power, or remedy under this
Note and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. Except to the
extent otherwise provided by the Loan Documents or prohibited by law, each
Borrower and each other person liable under this Note waives presentment,
protest, notice of dishonor, demand for payment, notice of intention to
accelerate maturity, notice of acceleration of maturity, notice of sale and all
other notices of any kind. Further, each agrees that Bank may (i) extend, modify
or renew this Note or make a novation of the loan evidenced by this Note, and/or
(ii) grant releases, compromises or indulgences with respect to any collateral
securing this Note, or with respect to any Borrower or other person liable under
this Note or any other Loan Documents, all without notice to or consent of each
Borrower and other such person, and without affecting the liability of each
Borrower and other such person; provided, Bank may not extend, modify or renew
this Note or make a novation of the loan evidenced by this Note without the
consent of the Borrower, or if there is more than one Borrower, without the
consent of at least one Borrower; and further provided, if there is more than
one Borrower, Bank may not enter into a modification of this Note which
increases the burdens of a Borrower without the consent of that Borrower.

                                     Page 4

<PAGE>



MISCELLANEOUS PROVISIONS. ASSIGNMENT. This Note and the other Loan Documents
shall inure to the benefit of and be binding upon the parties and their
respective heirs, legal representatives, successors and assigns. Bank's
interests in and rights under this Note and the other Loan Documents are freely
assignable, in whole or in part, by Bank. In addition, nothing in this Note or
any of the other Loan Documents shall prohibit Bank from pledging or assigning
this Note or any of the other Loan Documents or any interest therein to any
Federal Reserve Bank. Borrower shall not assign its rights and interest
hereunder without the prior written consent of Bank, and any attempt by Borrower
to assign without Bank's prior written consent is null and void. Any assignment
shall not release Borrower from the Obligations. ORGANIZATION; POWERS. Borrower
represents that Borrower (i) is (a) an adult individual and is sui juris, or (b)
a corporation, general partnership, limited partnership, limited liability
company or other legal entity, duly organized, validly existing and in good
standing under the laws of its state of organization, and is authorized to do
business in each other jurisdiction wherein its ownership of property or conduct
of business legally requires such organization (ii) has the power and authority
to own its properties and assets and to carry on its business as now being
conducted and as now contemplated; and (iii) has the power and authority to
execute, deliver and perform, and by all necessary action has authorized the
execution, delivery and performance of, all of its obligations under this Note
and any other Loan Document to which it is a party. APPLICABLE LAW; CONFLICT
BETWEEN DOCUMENTS. This Note and, unless otherwise provided in any other Loan
Document, the other Loan Documents shall be governed by and construed under the
laws of the state named in Bank's address on the first page hereof without
regard to that state's conflict of laws principles. If the terms of this Note
should conflict with the terms of any loan agreement or any commitment letter
that survives closing, the terms of this Note shall control. BORROWER'S
ACCOUNTS. Except as prohibited by law, Borrower grants Bank a security interest
in all of Borrower's accounts with Bank and any of its affiliates. SWAP
AGREEMENTS. All swap agreements (as defined in 11 U.S.C. ss. 101, as in effect
from time to time), if any, between Borrower and Bank or its affiliates are
independent agreements governed by the written provisions of said swap
agreements, which will remain in full force and effect, unaffected by any
repayment, prepayment, acceleration, reduction, increase or change in the terms
of this Note, except as otherwise expressly provided in said written swap
agreements, and any payoff statement from Bank relating to this Note shall not
apply to said swap agreements unless expressly referred to in such payoff
statement. JURISDICTION. Borrower irrevocably agrees to non-exclusive personal
jurisdiction in the state named in Bank's address on the first page hereof.
SEVERABILITY. If any provision of this Note or of the other Loan Documents shall
be prohibited or invalid under applicable 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 or other such document. NOTICES. Any notices to Borrower shall be
sufficiently given, if in writing and mailed or delivered to the Borrower's
address shown above or such other address as provided hereunder, and to Bank, if
in writing and mailed or delivered to Wachovia Bank, National Association, Mail
Code VA7628, P. O. Box 13327, Roanoke, VA 24040 or Wachovia Bank, National
Association, Mail Code VA7628, 10 South Jefferson Street, Roanoke, VA 24011 or
such other address as Bank may specify in writing from time to time. Notices to
Bank must include the mail code. In the event that Borrower changes Borrower's
address at any time prior to the date the Obligations are paid in full, Borrower
agrees to promptly give written notice of said change of address by registered
or certified mail, return receipt requested, all charges prepaid. PLURAL;
CAPTIONS. All references in the Loan Documents to Borrower, guarantor, person,
document or other nouns of reference mean both the singular and plural form, as
the case may be, and the term "person" shall mean any individual, person or
entity. The captions contained in the Loan Documents are inserted for
convenience only and shall not affect the meaning or interpretation of the Loan
Documents. ADVANCES. Bank may, in its sole discretion, make other advances which
shall be deemed to be advances under this Note, even though the stated principal
amount of this Note may be exceeded as a result thereof. POSTING OF PAYMENTS.
All payments received during normal banking hours after 2:00 p.m. local time at
the office of Bank first shown above shall be deemed received at the opening of
the next banking day. JOINT AND SEVERAL OBLIGATIONS. If there is more than one
Borrower, each is jointly and severally obligated. FEES AND TAXES. Borrower
shall promptly pay all documentary, intangible recordation and/or similar taxes
on this transaction whether assessed at closing or arising from time to time.
LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO,
INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR
ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT
MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH

                                     Page 5

<PAGE>


THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR
AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT
SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF
THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY
DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY
SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY
ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE. PATRIOT ACT NOTICE. To help
fight the funding of terrorism and money laundering activities, Federal law
requires all financial institutions to obtain, verify, and record information
that identifies each person who opens an account. For purposes of this section,
account shall be understood to include loan accounts. FINAL AGREEMENT. This Note
and the other Loan Documents represent the final agreement between the parties
and may not be contradicted by evidence of prior, contemporaneous or subsequent
oral agreements of the parties. There are no unwritten oral agreements between
the parties.

WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
BORROWER BY EXECUTION HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS NOTE, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED
IN CONNECTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT
HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO ACCEPT THIS NOTE.
EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE AND REPLACE ANY
PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED
IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN
CONNECTION WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR
MODIFIED BY, THIS NOTE.

IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.

                                  Roanoke Gas Company

                                  By: s/John B. Williamson, III    (SEAL)
                                        John B. Williamson, III, Chairman/CEO


                                  By: s/Howard T. Lyon  (SEAL)
                                        Howard T. Lyon, Controller/Treasurer

Tracking #: 100051rke
CAT - Deal # 493484 Facility ID 336016

                                     Page 6
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>frm8k0305ex103.txt
<DESCRIPTION>EXHIBIT 10.3 TO FORM 8-K
<TEXT>
                                                                   Exhibit 10.3
                                PROMISSORY NOTE

$5,000,000.00

                                                                 March 29, 2005

Bluefield Gas Company
4699 E Cumberland Road
Bluefield, West Virginia 24701
(Individually and collectively "Borrower")

Wachovia Bank, National Association
201 S. Jefferson Street
Roanoke, Virginia 24011
(Hereinafter referred to as "Bank")

                                IMPORTANT NOTICE

THIS NOTE CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH CONSTITUTES A
WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A BORROWER AND ALLOWS BANK TO
OBTAIN A JUDGMENT AGAINST YOU WITHOUT FURTHER NOTICE.

Borrower promises to pay to the order of Bank, in lawful money of the United
States of America, at its office indicated above or wherever else Bank may
specify, the sum of Five Million and No/100 Dollars ($5,000,000.00) or such sum
as may be advanced and outstanding from time to time, with interest on the
unpaid principal balance at the rate and on the terms provided in this
Promissory Note (including all renewals, extensions or modifications hereof,
this "Note").

RENEWAL/MODIFICATION. This Promissory Note renews, extends and/or modifies that
certain Promissory Note dated March 22, 2004 (the "Original Promissory Note"),
evidencing an original principal amount of $5,000,000.00. This Promissory Note
is not a novation.

LINE OF CREDIT. Borrower may borrow, repay and reborrow, and, upon the request
of Borrower, Bank shall advance and readvance under this Note from time to time
until the maturity hereof (each an "Advance" and together the "Advances"), so
long as the total principal balance outstanding under this Note at any one time
does not exceed (i) $5,000,000.00 from the date hereof through and including
March 30, 2005; (ii) beginning March 31, 2005 through and including September
15, 2005, the principal amount available for lending under this note shall be
$4,000,000.00; (iii) beginning September 16, 2005 through and including March
31, 2006, the principal amount available for lending under this Note shall be
$5,000,000.00. Bank's obligation to make Advances under this Note shall
terminate if Borrower is in Default. As of the date of each proposed Advance,
Borrower shall be deemed to represent that each representation made in the Loan
Documents is true as of such date. If Borrower subscribes to Bank's cash
management services and such services are applicable to this line of credit, the
terms of such service shall control the manner in which funds are transferred
between the applicable demand deposit account and the line of credit for credit
or debit to the line of credit.

USE OF PROCEEDS. Borrower shall use the proceeds of the loan(s) evidenced by
this Note for the commercial purposes of Borrower, as follows: for working
capital.

INTEREST RATE. Interest shall accrue on the unpaid principal balance of this
Note from the date hereof at the LIBOR Market Index Rate plus 0.7%, as that rate
may change from day to day in accordance with changes in the LIBOR Market Index
Rate ("Interest Rate"). "LIBOR Market Index Rate", for any day, means the rate
for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00
a.m.,



<PAGE>



London time, on such day, or if such day is not a London business day, then the
immediately preceding London business day (or if not so reported, then as
determined by Bank from another recognized source or interbank quotation).

DEFAULT RATE. In addition to all other rights contained in this Note, if a
Default (as defined herein) occurs and as long as a Default continues, all
outstanding Obligations, other than Obligations under any swap agreements (as
defined in 11 U.S.C. Section 101, as in effect from time to time) between
Borrower and Bank or its affiliates, shall bear interest at the Interest Rate
plus 3% ("Default Rate"). The Default Rate shall also apply from acceleration
until the Obligations or any judgment thereon is paid in full.

INTEREST AND FEE(S) COMPUTATION (ACTUAL/360). Interest and fees, if any, shall
be computed on the basis of a 360-day year for the actual number of days in the
applicable period ("Actual/360 Computation"). The Actual/360 Computation
determines the annual effective interest yield by taking the stated (nominal)
rate for a year's period and then dividing said rate by 360 to determine the
daily periodic rate to be applied for each day in the applicable period.
Application of the Actual/360 Computation produces an annualized effective rate
exceeding the nominal rate.

REPAYMENT TERMS. This Note shall be due and payable in consecutive monthly
payments of accrued interest only, commencing on April 1, 2005, and continuing
on the same day of each month thereafter until fully paid. In any event, all
principal and accrued interest shall be due and payable on March 31, 2006.

AUTOMATIC DEBIT OF CHECKING ACCOUNT FOR LOAN PAYMENT. Borrower authorizes Bank
to debit demand deposit account number 2001008895748 or any other account with
Bank (routing number 051400549) designated in writing by Borrower, beginning
April 1, 2005 for any payments due under this Note. Borrower further certifies
that Borrower holds legitimate ownership of this account and preauthorizes this
periodic debit as part of its right under said ownership.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations shall be applied to accrued interest and then
to principal. If a Default occurs, monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank. If any payment received by Bank
under this Note or other Loan Documents is rescinded, avoided or for any reason
returned by Bank because of any adverse claim or threatened action, the returned
payment shall remain payable as an obligation of all persons liable under this
Note or other Loan Documents as though such payment had not been made.

DEFINITIONS. LOAN DOCUMENTS. The term "Loan Documents", as used in this Note and
the other Loan Documents, refers to all documents executed in connection with or
related to the loan evidenced by this Note and any prior notes which evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued pursuant to any loan agreement to which this Note is subject, any
applications for such letters of credit and any other documents executed in
connection therewith or related thereto, and may include, without limitation, a
commitment letter that survives closing, a loan agreement, this Note, guaranty
agreements, security agreements, security instruments, financing statements,
mortgage instruments, any renewals or modifications, whenever any of the
foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C. Section 101, as in effect from time to time). OBLIGATIONS. The term
"Obligations", as used in this Note and the other Loan Documents, refers to any
and all indebtedness and other obligations under this Note, all other
obligations under any other Loan Document(s), and all obligations under any swap
agreements (as defined in 11 U.S.C. Section 101, as in effect from time to time)
between Borrower and Bank, or its affiliates, whenever executed. CERTAIN OTHER
TERMS. All terms that are used but not otherwise defined in any of the Loan
Documents shall have the definitions provided in the Uniform Commercial Code.

LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to 5% of each payment past due for 8 or more days. This
late charge shall not apply to payments

                                     Page 2

<PAGE>



due at maturity or by acceleration hereof, unless such late payment is in an
amount not greater than the highest periodic payment due hereunder. Acceptance
by Bank of any late payment without an accompanying late charge shall not be
deemed a waiver of Bank's right to collect such late charge or to collect a late
charge for any subsequent late payment received.

ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Obligations
including, without limitation, reasonable arbitration, paralegals', attorneys'
and experts' fees and expenses, whether incurred without the commencement of a
suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.

USURY. If at any time the effective interest rate under this Note would, but for
this paragraph, exceed the maximum lawful rate, the effective interest rate
under this Note shall be the maximum lawful rate, and any amount received by
Bank in excess of such rate shall be applied to principal and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.

DEFAULT. If any of the following occurs, a default ("Default") under this Note
shall exist: NONPAYMENT; NONPERFORMANCE. The failure of timely payment or
performance of the Obligations or Default under this Note or any other Loan
Documents. FALSE WARRANTY. A warranty or representation made or deemed made in
the Loan Documents or furnished Bank in connection with the loan evidenced by
this Note proves materially false, or if of a continuing nature, becomes
materially false. CROSS DEFAULT. At Bank's option, any default in payment or
performance of any obligation under any other loans, contracts or agreements of
Borrower, any Subsidiary or Affiliate of Borrower, any general partner of or the
holder(s) of the majority ownership interests of Borrower with Bank or its
affiliates ("Affiliate" shall have the meaning as defined in 11 U.S.C. Section
101, as in effect from time to time, except that the term "Borrower" shall be
substituted for the term "Debtor" therein; "Subsidiary" shall mean any business
in which Borrower holds, directly or indirectly, a controlling interest).
CESSATION; BANKRUPTCY. The death of, appointment of a guardian for, dissolution
of, termination of existence of, loss of good standing status by, appointment of
a receiver for, assignment for the benefit of creditors of, or commencement of
any bankruptcy or insolvency proceeding by or against Borrower, its Subsidiaries
or Affiliates, if any, or any general partner of or the holder(s) of the
majority ownership interests of Borrower, or any party to the Loan Documents.
MATERIAL CAPITAL STRUCTURE OR BUSINESS ALTERATION. Without prior written consent
of Bank, (i) a material alteration in the kind or type of Borrower's business or
that of Borrower's Subsidiaries or Affiliates, if any; (ii) the sale of
substantially all of the business or assets of Borrower, any of Borrower's
Subsidiaries or Affiliates or any guarantor, or a material portion (10% or more)
of such business or assets if such a sale is outside the ordinary course of
business of Borrower, or any of Borrower's Subsidiaries or Affiliates or any
guarantor, or more than 50% of the outstanding stock or voting power of or in
any such entity in a single transaction or a series of transactions; (iii) the
acquisition of substantially all of the business or assets or more than 50% of
the outstanding stock or voting power of any other entity; or (iv) should any
Borrower or any of Borrower's Subsidiaries or Affiliates or any guarantor enter
into any merger or consolidation. MATERIAL ADVERSE CHANGE. Bank determines in
good faith, in its sole discretion, that the prospects for payment or
performance of the Obligations are impaired or there has occurred a material
adverse change in the business or prospects of Borrower, financial or otherwise.

REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan
Documents, Bank may at any time thereafter, take the following actions: BANK
LIEN. Foreclose its security interest or lien against Borrower's accounts
without notice. ACCELERATION UPON DEFAULT. Accelerate the maturity of this Note
and, at Bank's option, any or all other Obligations, other than Obligations
under any swap agreements (as defined in 11 U.S.C. Section 101, as in effect
from time to time) between Borrower and Bank, or its affiliates, which shall be
due in accordance with and governed by the provisions of said swap agreements;
whereupon this Note and the accelerated Obligations shall be immediately due and
payable; provided, however, if the Default is based upon a bankruptcy or
insolvency proceeding commenced by or against Borrower or any guarantor or
endorser of this Note, all Obligations (other than Obligations under any swap
agreement as referenced above) shall automatically and immediately be due and
payable.

                                     Page 3

<PAGE>



CUMULATIVE. Exercise any rights and remedies as provided under the Note and
other Loan Documents, or as provided by law or equity.

ANNUAL FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 90 days
after the close of each fiscal year, unaudited management-prepared financial
statements reflecting its operations during such fiscal year, including, without
limitation, a balance sheet, profit and loss statement and statement of cash
flows, with supporting schedules and in reasonable detail, prepared in
conformity with generally accepted accounting principles, applied on a basis
consistent with that of the preceding year. If unaudited statements are
required, such statements shall be certified as to their correctness by a
principal financial officer of Borrower.

FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time, including without limitation,
financial statements and information pertaining to Borrower's financial
condition. Such information shall be true, complete, and accurate.

CONFESSION OF JUDGMENT. Each Borrower hereby constitutes and appoints John G.
Fox, Douglas A. Carson (each of whom is an officer of Bank), and Bank through an
officer duly authorized by Bank (any of the foregoing may act), as the true and
lawful attorneys-in-fact for them, in any or all of their names, place and
stead, and upon the occurrence of a Default in the payment of the Obligations
due under this Note, at maturity, or upon acceleration, to confess judgment
against them or any of them, in favor of Bank, before the Clerk of the Circuit
Court for City of Richmond, Virginia, in accordance with 1950 Code of Virginia,
Section 8.01-431 et seq., and any successor statute, for all amounts owed with
respect to the Obligations under and pursuant to this Note including, without
limitation, all costs of collection and attorneys' fees in an amount equal to
15% of the Obligations then outstanding (which shall be deemed reasonable
attorneys' fees for the purposes of this paragraph), and court costs, hereby
ratifying and confirming the acts of said attorney-in-fact as if done by
themselves. Upon request of Bank, each Borrower will execute an amendment or
other agreement substituting attorneys-in-fact appointed to act for each
Borrower hereunder.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan Documents shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same Default on a future occasion. Neither the failure nor any
delay on the part of Bank in exercising any right, power, or remedy under this
Note and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. Except to the
extent otherwise provided by the Loan Documents or prohibited by law, each
Borrower and each other person liable under this Note waives presentment,
protest, notice of dishonor, demand for payment, notice of intention to
accelerate maturity, notice of acceleration of maturity, notice of sale and all
other notices of any kind. Further, each agrees that Bank may (i) extend, modify
or renew this Note or make a novation of the loan evidenced by this Note, and/or
(ii) grant releases, compromises or indulgences with respect to any collateral
securing this Note, or with respect to any Borrower or other person liable under
this Note or any other Loan Documents, all without notice to or consent of each
Borrower and other such person, and without affecting the liability of each
Borrower and other such person; provided, Bank may not extend, modify or renew
this Note or make a novation of the loan evidenced by this Note without the
consent of the Borrower, or if there is more than one Borrower, without the
consent of at least one Borrower; and further provided, if there is more than
one Borrower, Bank may not enter into a modification of this Note which
increases the burdens of a Borrower without the consent of that Borrower.

MISCELLANEOUS PROVISIONS. ASSIGNMENT. This Note and the other Loan Documents
shall inure to the benefit of and be binding upon the parties and their
respective heirs, legal representatives, successors and assigns. Bank's
interests in and rights under this Note and the other Loan Documents are freely
assignable, in whole or in part, by Bank. In addition, nothing in this Note or
any of the other Loan Documents shall prohibit Bank from pledging or assigning
this Note or any of the other Loan Documents or any interest therein to any
Federal Reserve Bank. Borrower shall not assign its rights and

                                     Page 4

<PAGE>



interest hereunder without the prior written consent of Bank, and any attempt by
Borrower to assign without Bank's prior written consent is null and void. Any
assignment shall not release Borrower from the Obligations. ORGANIZATION;
POWERS. Borrower represents that Borrower (i) is (a) an adult individual and is
sui juris, or (b) a corporation, general partnership, limited partnership,
limited liability company or other legal entity, duly organized, validly
existing and in good standing under the laws of its state of organization, and
is authorized to do business in each other jurisdiction wherein its ownership of
property or conduct of business legally requires such organization (ii) has the
power and authority to own its properties and assets and to carry on its
business as now being conducted and as now contemplated; and (iii) has the power
and authority to execute, deliver and perform, and by all necessary action has
authorized the execution, delivery and performance of, all of its obligations
under this Note and any other Loan Document to which it is a party. APPLICABLE
LAW; CONFLICT BETWEEN DOCUMENTS. This Note and, unless otherwise provided in any
other Loan Document, the other Loan Documents shall be governed by and construed
under the laws of the state named in Bank's address on the first page hereof
without regard to that state's conflict of laws principles. If the terms of this
Note should conflict with the terms of any loan agreement or any commitment
letter that survives closing, the terms of this Note shall control. BORROWER'S
ACCOUNTS. Except as prohibited by law, Borrower grants Bank a security interest
in all of Borrower's accounts with Bank and any of its affiliates. SWAP
AGREEMENTS. All swap agreements (as defined in 11 U.S.C. Section 101, as in
effect from time to time), if any, between Borrower and Bank or its affiliates
arE independent agreements governed by the written provisions of said swap
agreements, which will remain in full force and effect, unaffected by any
repayment, prepayment, acceleration, reduction, increase or change in the terms
of this Note, except as otherwise expressly provided in said written swap
agreements, and any payoff statement from Bank relating to this Note shall not
apply to said swap agreements unless expressly referred to in such payoff
statement. JURISDICTION. Borrower irrevocably agrees to non-exclusive personal
jurisdiction in the state named in Bank's address on the first page hereof.
SEVERABILITY. If any provision of this Note or of the other Loan Documents shall
be prohibited or invalid under applicable 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 or other such document. NOTICES. Any notices to Borrower shall be
sufficiently given, if in writing and mailed or delivered to the Borrower's
address shown above or such other address as provided hereunder, and to Bank, if
in writing and mailed or delivered to Wachovia Bank, National Association, Mail
Code VA7628, P. O. Box 13327, Roanoke, VA 24040 or Wachovia Bank, National
Association, Mail Code VA7628, 10 South Jefferson Street, Roanoke, VA 24011 or
such other address as Bank may specify in writing from time to time. Notices to
Bank must include the mail code. In the event that Borrower changes Borrower's
address at any time prior to the date the Obligations are paid in full, Borrower
agrees to promptly give written notice of said change of address by registered
or certified mail, return receipt requested, all charges prepaid. PLURAL;
CAPTIONS. All references in the Loan Documents to Borrower, guarantor, person,
document or other nouns of reference mean both the singular and plural form, as
the case may be, and the term "person" shall mean any individual, person or
entity. The captions contained in the Loan Documents are inserted for
convenience only and shall not affect the meaning or interpretation of the Loan
Documents. ADVANCES. Bank may, in its sole discretion, make other advances which
shall be deemed to be advances under this Note, even though the stated principal
amount of this Note may be exceeded as a result thereof. POSTING OF PAYMENTS.
All payments received during normal banking hours after 2:00 p.m. local time at
the office of Bank first shown above shall be deemed received at the opening of
the next banking day. JOINT AND SEVERAL OBLIGATIONS. If there is more than one
Borrower, each is jointly and severally obligated. FEES AND TAXES. Borrower
shall promptly pay all documentary, intangible recordation and/or similar taxes
on this transaction whether assessed at closing or arising from time to time.
LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO,
INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR
ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT
MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN
DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE
OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE
A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE PARTIES
HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY
MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN

                                     Page 5

<PAGE>


CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS
RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE. PATRIOT ACT NOTICE.
To help fight the funding of terrorism and money laundering activities, Federal
law requires all financial institutions to obtain, verify, and record
information that identifies each person who opens an account. For purposes of
this section, account shall be understood to include loan accounts. FINAL
AGREEMENT. This Note and the other Loan Documents represent the final agreement
between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.

WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
BORROWER BY EXECUTION HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS NOTE, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED
IN CONNECTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT
HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO ACCEPT THIS NOTE.
EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE AND REPLACE ANY
PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED
IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN
CONNECTION WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR
MODIFIED BY, THIS NOTE.

IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.

                                  Bluefield Gas Company


                                  By: s/John B. Williamson, III    (SEAL)
                                        John B. Williamson, III, Chairman/CEO


                                  By: s/Howard T. Lyon  (SEAL)
                                        Howard T. Lyon, Controller/Treasurer

Tracking #: 100052rke
CAT - Deal # 493478 Facility ID 336044

                                     Page 6
</TEXT>
</DOCUMENT>
</SUBMISSION>
