<SUBMISSION>
<ACCESSION-NUMBER>0000906504-05-000020
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20051128
<ITEMS>1.01
<ITEMS>9.01
<FILING-DATE>20051202
<DATE-OF-FILING-DATE-CHANGE>20051202
<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>051241149
</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>frm8k1205doc.txt
<DESCRIPTION>FORM 8-K FOR DECEMBER 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): November 28, 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 13c-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))

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


<PAGE>



ITEM 1.01.        ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

                  On November 28, 2005, Roanoke Gas Company, a subsidiary of RGC
                  Resources, Inc., executed a Promissory Note in the principal
                  amount of $15,000,000 in favor of Wachovia Bank, National
                  Association ("Wachovia"), and entered into a Loan Agreement
                  with Wachovia for the purpose of refinancing currently
                  maturing debt and retiring higher interest bearing non-current
                  debt. The note has a term of five years and provides for
                  monthly payments of accrued interest. The interest rate is
                  one-month LIBOR plus 0.69%. With the proceeds of the
                  Promissory Note, Roanoke Gas Company will retire its
                  remaining $3,000,000 debt with MONY due October 1, 2016 with
                  an interest rate of 9.625%.

                  In addition and in connection with the above Promissory Note
                  and Loan Agreement, also on November 28, 2005, RGC Resources,
                  Inc., executed an Unconditional Guaranty in favor of Wachovia
                  unconditionally guaranteeing timely payment and performance of
                  any obligations of Roanoke Gas Company to Wachovia.



ITEM 9.01.        FINANCIAL STATEMENT AND EXHIBITS.


           10.1   Promissory Note in the original principal amount of
                  $15,000,000 by Roanoke Gas Company in favor of
                  Wachovia Bank, National Association, dated November 28, 2005.


           10.2   Loan Agreement by and between Roanoke Gas Company and
                  Wachovia Bank, National Association, dated November 28, 2005.


           10.3   Unconditional Guaranty by RGC Resources, Inc. in favor of
                  Wachovia Bank, National Association, dated November 28, 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.



Date: December 2, 2005            By: s/Howard T. Lyon

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


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>frm8k1205ex9-1.txt
<DESCRIPTION>EXHIBIT 10.1 TO FORM 8-K
<TEXT>
                                                                    Exhibit 10.1

                                 PROMISSORY NOTE


$15,000,000.00

                                                              November 28, 2005


Roanoke Gas Company
519 Kimball Avenue
P.O. Box 13007
Roanoke, Virginia 24016
(Individually and collectively "Borrower")

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

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 Fifteen Million and No/100 Dollars ($15,000,000.00) 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").

LOAN AGREEMENT. This Note is subject to the provisions of that certain Loan
Agreement between Bank and Borrower of even date herewith, as modified from time
to time.

USE OF PROCEEDS. Borrower shall use the proceeds of the loan(s) evidenced by
this Note for the commercial purposes of Borrower, as follows: intermediate term
financing to refinance existing term debt and fund capital spending.

INTEREST RATE. Interest shall accrue on the unpaid principal balance of this
Note during each Interest Period from the date hereof at a rate per annum equal
to 1-month LIBOR plus 0.69% ("Interest Rate"). Interest for each Interest Period
shall accrue each day during such Interest Period, commencing on and including
the first day to but excluding the last day. "Interest Period" means each period
commencing on the last day of the immediately preceding Interest Period and
ending on the same day of the month that interest is due 1 month thereafter;
provided (i) the first Interest Period shall commence on the date hereof and end
on the first day thereafter that interest is due, (ii) any Interest Period that
ends in a month for which there is no day which numerically corresponds to the
last day of the immediately preceding Interest Period shall end on the last day
of the month and (iii) any Interest Period that would otherwise extend past the
maturity date of this Note shall end on the maturity date of this Note. "LIBOR"
means, with respect to each Interest Period, the rate for U.S. dollar deposits
with a maturity equal to the number of months specified above, as reported on
Telerate page 3750 as of 11:00 a.m., London time, on the second London business
day before such Interest Period begins (or if not so reported, then as
determined by the Bank from another recognized source or interbank quotation).

INDEMNIFICATION. Borrower shall indemnify Bank against Bank's loss or expense as
a consequence of (a) Borrower's failure to make any payment when due under this
Note, (b) any payment, prepayment or conversion of any loan on a day other than
the last day of the Interest Period, or (c) any failure to make a borrowing or
conversion after giving notice thereof ("Indemnified Loss or Expense"). The
amount of such Indemnified Loss or Expense shall be determined by Bank based
upon the assumption that Bank funded 100% of that portion of the loan in the
London interbank market.


<PAGE>




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 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 interest rate exceeding
the nominal rate.

REPAYMENT TERMS. This Note shall be due and payable in consecutive monthly
payments of accrued interest only, commencing on December 31, 2005, and
continuing on the last day of each month thereafter until fully paid. In any
event, all principal and accrued interest shall be due and payable on December
1, 2010. Beginning on the first anniversary of the loan and at any time prior to
December 1, 2010 (the maturity date) Borrower may request an extension of the
maturity date. Any extension of the maturity date is subject to credit approval
by the Bank and execution of such legal documentation as required by Bank. The
Bank shall not be obligated to agree to any requested extension, and the Bank's
decision regarding whether or not to permit an extension shall be in the Bank's
sole discretion.

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 Virginia 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.



<PAGE>



ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank's
reasonable expenses actually 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 (the greater
of $500,000.00 or 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. Cumulative. Exercise any rights and remedies as provided under the Note
and other Loan Documents, or as provided by law or equity.

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


<PAGE>



information pertaining to Borrower's financial condition.  Such information
shall be true, complete, and accurate.

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 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. 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 except as otherwise expressly provided 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,


<PAGE>


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 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


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>frm8k1205ex9-2.txt
<DESCRIPTION>EXHIBIT 10.2 TO FORM 8-K
<TEXT>
                                                                  Exhibit 10.2

                                 LOAN AGREEMENT


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

Roanoke Gas Company
519 Kimball Avenue
P.O. Box 13007
Roanoke, Virginia 24016
(Individually and collectively "Borrower")

This Loan Agreement ("Agreement") is entered into November 28, 2005, by and
between Bank and Borrower.

This Agreement applies to the loan or loans (individually and collectively, the
"Loan") evidenced by one or more promissory notes of even date herewith or other
notes subject hereto, as modified from time to time (whether one or more, the
"Note") and all Loan Documents. The terms "Loan Documents" and "Obligations," as
used in this Agreement, are defined in the Note.

Relying upon the covenants, agreements, representations and warranties contained
in this Agreement, Bank is willing to extend credit to Borrower upon the terms
and subject to the conditions set forth herein, and Bank and Borrower agree as
follows:

REPRESENTATIONS. Borrower represents that from the date of this Agreement and
until final payment in full of the Obligations: Accurate Information. All
information now and hereafter furnished to Bank is and will be true, correct and
complete in all materal respects. Any such information relating to Borrower's
financial condition will accurately reflect Borrower's financial condition as of
the date(s) thereof, (including all contingent liabilities of every type), and
Borrower further represents that its financial condition has not changed
materially or adversely since the date(s) of such documents. Authorization;
Non-Contravention. The execution, delivery and performance by Borrower and any
guarantor, as applicable, of this Agreement and other Loan Documents to which it
is a party are within its power, have been duly authorized as may be required
and, if necessary, by making appropriate filings with any governmental agency or
unit and are the legal, binding, valid and enforceable obligations of Borrower
and any guarantors; and do not (i) contravene, or constitute (with or without
the giving of notice or lapse of time or both) a violation of any provision of
applicable law, a violation of the organizational documents of Borrower or any
guarantor, or a default under any agreement, judgment, injunction, order, decree
or other instrument binding upon or affecting Borrower or any guarantor, (ii)
result in the creation or imposition of any lien (other than the lien(s) created
by the Loan Documents) on any of Borrower's or any guarantor's assets, or (iii)
give cause for the acceleration of any obligations of Borrower or any guarantor
to any other creditor. Asset Ownership. Borrower has good and marketable title
to all of the properties and assets reflected on the balance sheets and
financial statements supplied Bank by Borrower, and all such properties and
assets are free and clear of mortgages, security deeds, pledges, liens, charges,
and all other encumbrances, except as otherwise disclosed to Bank by Borrower in
writing and approved by Bank ("Permitted Liens"). To Borrower's knowledge, no
default has occurred under any Permitted Liens and no claims or interests
adverse to Borrower's present rights in its properties and assets have arisen.
Discharge of Liens and Taxes. Borrower has duly filed, paid and/or discharged
all taxes or other claims that may become a lien on any of its property or
assets, except to the extent that such items are being appropriately contested
in good faith and an adequate reserve for the payment thereof is being
maintained. Sufficiency of Capital. Borrower is not, and after consummation of
this Agreement and after giving effect to all indebtedness incurred and liens
created by Borrower in connection with the Note and any other Loan Documents,
will not be, insolvent within the meaning of 11 U.S.C. Section 101, as in effect
from time to time. Compliance with Laws. Borrower and any subsidiary and
affiliate of Borrower and


<PAGE>



any guarantor are in compliance in all material respects with all federal, state
and local laws, rules and regulations applicable to its properties, operations,
business, and finances, including, without limitation, any federal or state laws
relating to liquor (including 18 U.S.C. Section 3617, et seq.) or narcotics
(including 21 U.S.C. Section 801, et seq.) and/or any commercial crimes; all
applicable federal, state and local laws and regulations intended to protect the
environment; and the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), if applicable. None of Borrower, or any subsidiary or affiliate of
Borrower or any guarantor is a Sanctioned Person or has any of its assets in a
Sanctioned Country or does business in or with, or derives any of its operating
income from investments in or transactions with, Sanctioned Persons or
Sanctioned Countries in violation of economic sanctions administered by OFAC.
The proceeds from the Loan will not be used to fund any operations in, finance
any investments or activities in, or make any payments to, a Sanctioned Person
or a Sanctioned Country. "OFAC" means the U.S. Department of the Treasury's
Office of Foreign Assets Control. "Sanctioned Country" means a country subject
to a sanctions program identified on the list maintained by OFAC and available
at http://www.treas.gov/offices/enforcement/ofac/sanctions/, or as otherwise
published from time to time. "Sanctioned Person" means (i) a person named on the
list of Specially Designated Nationals or Blocked Persons maintained by OFAC
available at http://www.treas.gov/offices/enforcement/ofac/sdn/, or as otherwise
published from time to time, or (ii) (A) an agency of the government of a
Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or
(C) a person resident in a Sanctioned Country to the extent subject to a
sanctions program administered by OFAC. Organization and Authority. Each
corporation, partnership or limited liability company Borrower and/or guarantor,
as applicable, is duly created, validly existing and in good standing under the
laws of the state of its organization, and has all powers, governmental
licenses, authorizations, consents and approvals required to operate its
business as now conducted. Each corporation, partnership or limited liability
company Borrower and/or guarantor, as applicable, is duly qualified, licensed
and in good standing in each jurisdiction where qualification or licensing is
required by the nature of its business or the character and location of its
property, business or customers, and in which the failure to so qualify or be
licensed, as the case may be, in the aggregate, could have a material adverse
effect on the business, financial position, results of operations, properties or
prospects of Borrower or any such guarantor. No Litigation. To the best of
Borrower's knowledge, there are no threatened suits, claims or demands against
Borrower or any guarantor where the claim or controversy amount is in excess of
$500,000.00 that have not been disclosed to Bank by Borrower in writing, and
approved by Bank. Indemnity. Borrower will indemnify Bank and its affiliates
from and against any losses, liabilities, claims, damages, penalties or fines
imposed upon, asserted or assessed against or incurred by Bank arising out of
the inaccuracy or breach of any of the representations contained in this
Agreement or any other Loan Documents.

AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will: Access to Books and Records. Allow Bank, or its agents,
during normal business hours, access to the books, records and such other
documents of Borrower as Bank shall reasonably require, and allow Bank, at
Borrower's expense, to inspect, audit and examine the same and to make extracts
therefrom and to make copies thereof. Business Continuity. Conduct its business
in substantially the same manner and locations as such business is now and has
previously been conducted. Compliance with Other Agreements. Comply with all
terms and conditions contained in this Agreement, and any other Loan Documents,
and swap agreements, if applicable, as defined in the 11 U.S.C. Section 101, as
in effect from time to time. Estoppel Certificate. Furnish, within 15 days after
request by Bank, a written statement duly acknowledged of the amount due under
the Loan and whether offsets or defenses exist against the Obligations.
Insurance. Maintain adequate insurance coverage with respect to its properties
and business against loss or damage of the kinds and in the amounts customarily
insured against by companies of established reputation engaged in the same or
similar businesses including, without limitation, commercial general liability
insurance, workers compensation insurance, and business interruption insurance;
all acquired in such amounts and from such companies as Bank may reasonably
require. Maintain Properties. Maintain, preserve and keep its property in good
repair, working order and condition, making all replacements, additions and
improvements thereto necessary for the proper conduct of its business, unless
prohibited by the Loan Documents. Non-Default Certificate From Borrower. Deliver
to Bank, with the Financial Statements required below, a certificate signed by


<PAGE>



Borrower, in the form attached hereto as Exhibit A, if Borrower is an
individual, or by a principal financial officer of Borrower warranting that no
"Default" as specified in the Loan Documents nor any event which, upon the
giving of notice or lapse of time or both, would constitute such a Default, has
occurred and demonstrating Borrower's compliance with the financial covenants
contained herein. Notice of Default and Other Notices. (a) Notice of Default.
Furnish to Bank immediately upon becoming aware of the existence of any
condition or event which constitutes a Default (as defined in the Loan
Documents) or any event which, upon the giving of notice or lapse of time or
both, may become a Default, written notice specifying the nature and period of
existence thereof and the action which Borrower is taking or proposes to take
with respect thereto. (b) Other Notices. Promptly notify Bank in writing of (i)
any material adverse change in its financial condition or its business; (ii) any
default under any material agreement, contract or other instrument to which it
is a party or by which any of its properties are bound, or any acceleration of
the maturity of any indebtedness owing by Borrower; (iii) any material adverse
claim against or affecting Borrower or any part of its properties; (iv) the
commencement of, and any material determination in, any litigation with any
third party or any proceeding before any governmental agency or unit affecting
Borrower; and (v) at least 30 days prior thereto, any change in Borrower's name
or address as shown above, and/or any change in Borrower's structure. Other
Financial Information. Deliver promptly such other information regarding the
operation, business affairs, and financial condition of Borrower which Bank may
reasonably request. Payment of Debts. Pay and discharge when due, and before
subject to penalty or further charge, and otherwise satisfy before maturity or
delinquency, all obligations, debts, taxes, and liabilities of whatever nature
or amount, except those which Borrower in good faith disputes. Reports and
Proxies. Deliver to Bank, promptly, a copy of all financial statements, reports,
notices, and proxy statements, sent by Borrower to stockholders, and all regular
or periodic reports required to be filed by Borrower with any governmental
agency or authority.

NEGATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will not: Encumbrances. Create, assume, or permit to exist any
mortgage, security deed, deed of trust, pledge, lien, charge or other
encumbrance on any of its assets, whether now owned or hereafter acquired, other
than: (i) security interests required by the Loan Documents; (ii) liens for
taxes contested in good faith; or (iii) Permitted Liens. Default on Other
Contracts or Obligations. Default on any material contract with or obligation
when due to a third party or default in the performance of any obligation to a
third party incurred for money borrowed in an amount in excess of $250,000.00.
Government Intervention. Permit the assertion or making of any seizure, vesting
or intervention by or under authority of any governmental entity, as a result of
which the management of Borrower or any guarantor is displaced of its authority
in the conduct of its respective business or such business is curtailed or
materially impaired. Judgment Entered. Permit the entry of any monetary judgment
or the assessment against, the filing of any tax lien against, or the issuance
of any writ of garnishment or attachment against any property of or debts due
Borrower in an amount in excess of $500,000.00 which is not discharged or
execution is not stayed within 30 days of entry. Retire or Repurchase Capital
Stock. Retire or otherwise acquire any of its capital stock.

PERIODIC FINANCIAL STATEMENTS. Borrower shall deliver to Bank, within 30 days
after the end of each fiscal quarter, unaudited management-prepared quarterly
financial statements including, without limitation, a balance sheet, profit and
loss statement and statement of cash flows, with supporting schedules; all in
reasonable detail and prepared in conformity with generally accepted accounting
principles, applied on a basis consistent with that of the preceding year. Such
statements shall be certified as to their correctness by a principal financial
officer of Borrower and in each case, if audited statements are required,
subject to audit and year-end adjustments.

FINANCIAL COVENANTS. Borrower agrees to the following provisions from the date
hereof until final payment in full of the Obligations, unless Bank shall
otherwise consent in writing, using the financial information for Borrower, its
subsidiaries, affiliates and its holding or parent company, as applicable:
Retained Earnings. Borrower shall, at all times maintain Retained Earnings of
not less than $9,000,000.00. Retained Earnings shall be defined according to
generally accepted accounting principles. EBIT to Interest Ratio. Borrower
shall, at all times, maintain an EBIT to Interest Ratio of not


<PAGE>



less than 1.50 to 1.00. This covenant shall be calculated quarterly, on a
rolling four quarters basis. "EBIT to Interest Ratio" shall mean the sum of
earnings before interest and taxes divided by interest expense. Long Term Debt
to Long Term Capitalization Ratio. Borrower shall maintain a ratio of Long Term
Debt to Long Term Capitalization of not more than .65 to 1.00 measured at each
fiscal year end. "Long Term Debt to Long Term Capitalization" shall mean Long
Term Funded Debt divided by the sum of Long Term Funded Debt and Effective Net
Worth. "Long Term Funded Debt" shall mean, as applied to any person or entity,
the sum of all indebtedness for borrowed money, including, without limitation,
capital lease obligations, subordinated debt (including debt subordinated to the
Bank), and unreimbursed drawings under letters of credit, or any other monetary
obligation evidenced by a note, bond, debenture or other agreement of that
person or entity with a maturity greater than one year. "Effective Net Worth"
shall mean total assets minus Total Liabilities. "Total Liabilities" shall mean
all liabilities of Borrower excluding debt fully subordinated to Bank on terms
and conditions acceptable to Bank, and including capitalized leases and all
reserves for deferred taxes and other deferred sums appearing on the liabilities
side of a balance sheet, in accordance with generally accepted account
principles applied on a consistent basis.

CONDITIONS PRECEDENT.  The obligations of Bank to make the loan and any advances
pursuant to this  Agreement are subject to the following  conditions  precedent:
Additional Documents. Receipt by Bank of such additional supporting documents as
Bank or its counsel may reasonably request.

IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement 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




                                Wachovia Bank, National Association



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



<PAGE>



                                    EXHIBIT A

                             NON-DEFAULT CERTIFICATE


In accordance with the terms of the Loan Documents dated November 25, 2005 by
and between Wachovia Bank, National Association and Roanoke Gas Company
("Borrower"), I hereby certify that:


1.       I am a principal financial officer of Borrower;

2.       The enclosed financial statements are prepared in accordance with
         generally accepted accounting principles;

3.       No Default (as defined in the Loan Documents) or any event which, upon
         the giving of notice or lapse of time or both, would constitute such a
         Default, has occurred.

4.       Borrower is in compliance with the Financial Covenant(s) set forth in
         the Loan Documents, as demonstrated by the calculations contained in
         the Covenant Compliance Certificate attached hereto as Schedule 1.


s/John B. Williamson, III
-------------------------------
Name: John B. Williamson, III
Title: Chairman/CEO


<PAGE>


                                   SCHEDULE 1

                         COVENANT COMPLIANCE CERTIFICATE

Borrower Name: Roanoke Gas Company

For the fiscal ________________________ ended ____________________

ALL CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN
IN THE LOAN DOCUMENTS.

                 CALCULATIONS FOR ROLLING FOUR QUARTERS COVENANT
               COMPLIANCE FOR THE QUARTER ENDED__________________

INSTRUCTIONS: THIS IS A ROLLING FOUR-QUARTER CALCULATION. THE COLUMN LABELED
Q1 SHOULD CONTAIN INFORMATION FOR THE MOST RECENTLY ENDED QUARTER (I.E.,
MATCHES THE DATE ABOVE). Q2 SHOULD CONTAIN INFORMATION FOR THE IMMEDIATELY
PRECEDING QUARTER-END, AND SO ON FOR Q3 AND Q4.
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

MOST RECENT QUARTER                         PRECEDING THREE QUARTERS

COVENANT:                  Q1               Q2                Q3                Q4               TOTAL
--------

                                              EBIT to Interest Ratio

(a) net income             _____            _____             _____             _____            _____

(b) interest               _____            _____             _____             _____            _____

(c) taxes                  _____            _____             _____             _____            _____

</TABLE>

The sum of the  Totals  of (a) plus (b) plus  (c)  divided  by the  Total of (b)
equals an EBIT to Interest  Ratio of _____.  Required EBIT to Interest  Ratio is
not less than ____ to 1.00.

Compliance? ___Yes ___No


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>fmr8k1205ex9-3.txt
<DESCRIPTION>EXHIBIT 10.3 TO FORM 8-K
<TEXT>
                                                                    Exhibit 10.3

                             UNCONDITIONAL GUARANTY

                                                              November 28, 2005


Roanoke Gas Company
519 Kimball Avenue
P.O. Box 13007
Roanoke, Virginia 24016
(Individually and collectively "Borrower")

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

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

To induce Bank to make, extend or renew loans, advances, credit, or other
financial accommodations to or for the benefit of Borrower, which are and will
be to the direct interest and advantage of the Guarantor, and in consideration
of loans, advances, credit, or other financial accommodations made, extended or
renewed to or for the benefit of Borrower, which are and will be to the direct
interest and advantage of the Guarantor, Guarantor hereby absolutely,
irrevocably and unconditionally guarantees to Bank and its successors, assigns
and affiliates the timely payment and performance of all liabilities and
obligations of Borrower to Bank and its affiliates, including, but not limited
to, all obligations under any notes, loan agreements, security agreements,
letters of credit, instruments, accounts receivable, contracts, drafts, leases,
chattel paper, indemnities, acceptances, repurchase agreements, overdrafts, and
the Loan Documents, as defined below, and all obligations of Borrower to Bank or
any of its affiliates under any swap agreement (as defined in 11 U.S.C. Section
101, as in effect from time to time), however and whenever incurred or
evidenced, whether primary, secondary, direct, indirect, absolute, contingent,
due or to become due, now existing or hereafter contracted or acquired, and all
modifications, extensions and renewals thereof, (collectively, the "Guaranteed
Obligations").

Guarantor further covenants and agrees:

GUARANTOR'S LIABILITY. This Guaranty is a continuing and unconditional guaranty
of payment and performance and not of collection. The parties to this Guaranty
are jointly and severally obligated hereunder. This Guaranty does not impose any
obligation on Bank to extend or continue to extend credit or otherwise deal with
Borrower at any subsequent time. This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of the Guaranteed
Obligations is rescinded, avoided or for any other reason must be returned by
Bank, and the returned payment shall remain payable as part of the Guaranteed
Obligations, all as though such payment had not been made. Except to the extent
the provisions of this Guaranty give Bank additional rights, this Guaranty shall
not be deemed to supersede or replace any other guaranties given to Bank by
Guarantor; and the obligations guaranteed hereby shall be in addition to any
other obligations guaranteed by Guarantor pursuant to any other agreement of
guaranty given to Bank and other guaranties of the Guaranteed Obligations.

TERMINATION OF GUARANTY. Guarantor may terminate this Guaranty only by written
notice, delivered personally to or received by certified or registered United
States Mail by an authorized officer


<PAGE>



of Bank at the address for notices provided herein. Such termination shall be
effective only with respect to Guaranteed Obligations arising more than 15 days
after the date such written notice is received by said Bank officer. Such
termination shall not be effective with respect to Guaranteed Obligations
(including any subsequent extensions, modifications or compromises of the
Guaranteed Obligations) then existing, or Guaranteed Obligations arising
subsequent to receipt by Bank of said notice if such Guaranteed Obligations are
a result of Bank's obligation to make advances pursuant to a commitment, or are
based on Borrower's obligations to make payments pursuant to any swap agreement
(as defined in 11 U.S.C. Section 101, as in effect from time to time), entered
into prior to expiration of the 15 day notice period, or are a result of
advances which are necessary for Bank to protect its collateral or otherwise
preserve its interests. Termination of this Guaranty by any single Guarantor
will not affect the existing and continuing obligations of any other Guarantor
hereunder.

CONSENT TO MODIFICATIONS. Guarantor consents and agrees that Bank (and, with
respect to swap obligations, its affiliates) may from time to time, in its sole
discretion, without affecting, impairing, lessening or releasing the obligations
of Guarantor hereunder: (a) extend or modify the time, manner, place or terms of
payment or performance and/or otherwise change or modify the credit terms of the
Guaranteed Obligations; (b) increase, renew, or enter into a novation of the
Guaranteed Obligations; (c) waive or consent to the departure from terms of the
Guaranteed Obligations; (d) permit any change in the business or other dealings
and relations of Borrower or any other guarantor with Bank; (e) proceed against,
exchange, release, realize upon, or otherwise deal with in any manner any
collateral that is or may be held by Bank in connection with the Guaranteed
Obligations or any liabilities or obligations of Guarantor; and (f) proceed
against, settle, release, or compromise with Borrower, any insurance carrier, or
any other person or entity liable as to any part of the Guaranteed Obligations,
and/or subordinate the payment of any part of the Guaranteed Obligations to the
payment of any other obligations, which may at any time be due or owing to Bank;
all in such manner and upon such terms as Bank may deem appropriate, and without
notice to or further consent from Guarantor. No invalidity, irregularity,
discharge or unenforceability of, or action or omission by Bank relating to any
part of the Guaranteed Obligations or any security therefor shall affect or
impair this Guaranty.

WAIVERS AND ACKNOWLEDGMENTS. Guarantor waives and releases the following rights,
demands, and defenses Guarantor may have with respect to Bank (and, with respect
to swap obligations, its affiliates) and collection of the Guaranteed
Obligations: (a) promptness and diligence in collection of any of the Guaranteed
Obligations from Borrower or any other person liable thereon, and in foreclosure
of any security interest and sale of any property serving as collateral for the
Guaranteed Obligations; (b) any law or statute that requires that Bank (and,
with respect to swap obligations, its affiliates) make demand upon, assert
claims against, or collect from Borrower or other persons or entities, foreclose
any security interest, sell collateral, exhaust any remedies, or take any other
action against Borrower or other persons or entities prior to making demand
upon, collecting from or taking action against Guarantor with respect to the
Guaranteed Obligations, including any such rights Guarantor might otherwise have
had under Va. Code Sections 49-25 and 49-26, et seq., N.C.G.S. Sections 26-7, et
seq., Tenn. Code Ann. Section 47-12-101, O.C.G.A. Section 10-7-24, Mississippi
Code Ann. Section 87-5-1, and any successor statute and any other applicable
law; (c) any law or statute that requires that Borrower or any other person be
joined in, notified of or made part of any action against Guarantor; (d) that
Bank or its affiliates preserve, insure or perfect any security interest in
collateral or sell or dispose of collateral in a particular manner or at a
particular time, provided that Bank's obligation to dispose of Collateral in a
commercially reasonable manner is not waived hereby; (e) notice of extensions,
modifications, renewals, or novations of the Guaranteed Obligations, of any new
transactions or other relationships between Bank, Borrower and/or any guarantor,
and of changes in the financial condition of, ownership of, or business
structure of Borrower or any other guarantor; (f) presentment, protest, notice
of dishonor, notice of default, demand for payment, notice of intention to
accelerate maturity, notice of acceleration of maturity, notice of sale, and
all other notices of any kind whatsoever to which Guarantor may be entitled;
(g) the right to assert against Bank or its affiliates any defense (legal or
equitable), set-off, counterclaim, or claim that Guarantor may have at any time
against Borrower or any other party liable to Bank or its affiliates; (h) all
defenses relating to invalidity, insufficiency, unenforceability, enforcement,
release or impairment of Bank or its affiliates' lien on any collateral, of the
Loan Documents, or of any other guaranties held by


<PAGE>



Bank; (i) any right to which Guarantor is or may become entitled to be
subrogated to Bank or its affiliates' rights against Borrower or to seek
contribution, reimbursement, indemnification, payment or the like, or
participation in any claim, right or remedy of Bank or its affiliates against
Borrower or any security which Bank or its affiliates now has or hereafter
acquires, until such time as the Guaranteed Obligations have been fully
satisfied beyond the expiration of any applicable preference period; (j) any
claim or defense that acceleration of maturity of the Guaranteed Obligations is
stayed against Guarantor because of the stay of assertion or of acceleration of
claims against any other person or entity for any reason including the
bankruptcy or insolvency of that person or entity; and (k) the right to
marshalling of Borrower's assets or the benefit of any exemption claimed by
Guarantor. Guarantor acknowledges and represents that Guarantor has relied upon
Guarantor's own due diligence in making an independent appraisal of Borrower,
Borrower's business affairs and financial condition, and any collateral;
Guarantor will continue to be responsible for making an independent appraisal of
such matters; and Guarantor has not relied upon Bank or its affiliates for
information regarding Borrower or any collateral.

FINANCIAL CONDITION. Guarantor warrants, represents and covenants to Bank and
its affiliates that on and after the date hereof: (a) the fair saleable value of
Guarantor's assets exceeds its liabilities, Guarantor is meeting its current
liabilities as they mature, and Guarantor is and shall remain solvent; (b) all
financial statements of Guarantor furnished to Bank are correct and accurately
reflect the financial condition of Guarantor as of the respective dates thereof;
(c) since the date of such financial statements, there has not occurred a
material adverse change in the financial condition of Guarantor; (d) there are
not now pending any court or administrative proceedings or undischarged
judgments against Guarantor, no federal or state tax liens have been filed or
threatened against Guarantor, and Guarantor is not in default or claimed default
under any agreement; and (e) at such reasonable times as Bank requests,
Guarantor will furnish Bank and its affiliates with such other financial
information as Bank and its affiliates may reasonably request.

INTEREST AND APPLICATION OF PAYMENTS. Regardless of any other provision of this
Guaranty or other Loan Documents, if for any reason the effective interest on
any of the Guaranteed Obligations should exceed the maximum lawful interest, the
effective interest shall be deemed reduced to and shall be such maximum lawful
interest, and any sums of interest which have been collected in excess of such
maximum lawful interest shall be applied as a credit against the unpaid
principal balance of the Guaranteed Obligations. Monies received from any source
by Bank or its affiliates for application toward payment of the Guaranteed
Obligations may be applied to such Guaranteed Obligations in any manner or order
deemed appropriate by Bank and its affiliates.

DEFAULT. If any of the following events occur, a default ("Default") under this
Guaranty shall exist: (a) failure of timely payment or performance of the
Guaranteed Obligations or a default under any Loan Document; (b) a breach of any
agreement or representation contained or referred to in the Guaranty, or any of
the Loan Documents, or contained in any other contract or agreement of Guarantor
with Bank or its affiliates, whether now existing or hereafter arising; (c) 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 the commencement of any
insolvency or bankruptcy proceeding by or against Guarantor or any general
partner of or the holder(s) of the majority ownership interests of Guarantor;
and/or (d) Bank determines in good faith, in its sole discretion, that the
prospects for payment or performance of the Guaranteed Obligations are impaired
or a material adverse change has occurred in the business or prospects of
Borrower or Guarantor, financial or otherwise. If a Default occurs, the
Guaranteed Obligations shall be due immediately and payable without notice,
other than Guaranteed Obligations under any swap agreements (as defined in 11
U.S.C. Section 101, as in effect from time to time) with Bank or its affiliates,
which shall be due in accordance with and governed by the provisions of said
swap agreements, and, Bank and its affiliates may exercise any rights and
remedies as provided in this Guaranty and other Loan Documents, or as provided
at law or equity. Guarantor shall pay interest on the Guaranteed Obligations
from such Default at the highest rate of interest charged on any of the
Guaranteed Obligations.



<PAGE>



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

SUBORDINATION OF OTHER DEBTS. Guarantor agrees: (a) to subordinate the
obligations now or hereafter owed by Borrower to Guarantor ("Subordinated Debt")
to any and all obligations of Borrower to Bank or its affiliates now or
hereafter existing while this Guaranty is in effect, provided however that
Guarantor may receive regularly scheduled principal and interest payments on the
Subordinated Debt so long as (i) all sums due and payable by Borrower to Bank
and its affiliates have been paid in full on or prior to such date, and (ii) no
event or condition which constitutes or which with notice or the lapse or time
would constitute an event of default with respect to the Guaranteed Obligations
shall be continuing on or as of the payment date; (b) Guarantor will either
place a legend indicating such subordination on every note, ledger page or other
document evidencing any part of the Subordinated Debt or deliver such documents
to Bank; and (c) except as permitted by this paragraph, Guarantor will not
request or accept payment of or any security for any part of the Subordinated
Debt, and any proceeds of the Subordinated Debt paid to Guarantor, through error
or otherwise, shall immediately be forwarded to Bank by Guarantor, properly
endorsed to the order of Bank, to apply to the Guaranteed Obligations.

MISCELLANEOUS. Assignment. This Guaranty and 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 Guaranty and other Loan Documents are freely assignable, in whole or in
part, by Bank. Any assignment shall not release Guarantor from the Guaranteed
Obligations. Organization; Powers. Guarantor (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 (as indicated below), 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 Guaranty and any other Loan Document to which it
is a party. Applicable Law; Conflict Between Documents. This Guaranty shall be
governed by and construed under the laws of the state named in Bank's address
shown above without regard to that state's conflict of laws principles. If the
terms of this Guaranty should conflict with the terms of any commitment letter
that survives closing, the terms of this Guaranty shall control. Guarantor's
Accounts. Except as prohibited by law, Guarantor grants Bank and its affiliates
a security interest in all of Guarantor's accounts with Bank and its affiliates.
Jurisdiction. Guarantor irrevocably agrees to nonexclusive personal jurisdiction
in the state named in Bank's address shown above. Severability. If any provision
of this Guaranty 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 Guaranty or other Loan Documents.
Notices. Any notices to Guarantor shall be sufficiently given if in writing and
mailed or delivered to Guarantor'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 Guarantor changes Guarantor's address at any time prior to the date
the Guaranteed Obligations are paid in full, Guarantor agrees to promptly give
written notice of said change of address to Bank 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. Binding
Contract.


<PAGE>



Guarantor by execution of and Bank by acceptance of this Guaranty agree that
each party is bound to all terms and provisions of this Guaranty. Amendments,
Waivers and Remedies. No waivers, amendments or modifications of this Guaranty
and other Loan Documents shall be valid unless in writing and signed by an
officer of Bank. No waiver by Bank or its affiliates 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 or its
affiliates in exercising any right, power, or privilege granted pursuant to this
Guaranty and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise or the
exercise of any other right, power or privilege. All remedies available to Bank
or its affiliates with respect to this Guaranty and other Loan Documents and
remedies available at law or in equity shall be cumulative and may be pursued
concurrently or successively. Partnerships. If Guarantor is a partnership, the
obligations, liabilities and agreements on the part of Guarantor shall remain in
full force and effect and fully applicable notwithstanding any changes in the
individuals comprising the partnership. The term "Guarantor" includes any
altered or successive partnerships, and predecessor partnership(s) and the
partners shall not be released from any obligations or liabilities hereunder.
Loan Documents. The term "Loan Documents" refers to all documents executed in
connection with or related to the Guaranteed Obligations and may include,
without limitation, commitment letters that survive closing, loan agreements,
other guaranty agreements, security agreements, instruments, financing
statements, mortgages, deeds of trust, deeds to secure debt, letters of credit
and any amendments or supplements (excluding swap agreements as defined in 11
U.S.C. Section 101, as in effect 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 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.

FINANCIAL COVENANTS. Guarantor agrees to the following provisions from the date
hereof until final payment in full of the Guaranteed Obligations, unless Bank
shall otherwise consent in writing, using the financial information for
Guarantor, its subsidiaries, affiliates and its holding or parent company, as
applicable: EBIT to Interest Ratio. Guarantor shall, at all times, maintain an
EBIT to Interest Ratio of not less than 1.50 to 1.00. This covenant shall be
calculated quarterly, on a rolling four quarters basis. "EBIT to Interest Ratio"
shall mean the sum of earnings before interest and taxes divided by interest
expense. Long Term Debt to Long Term Capitalization Ratio. Guarantor shall
maintain a ratio of Long Term Debt to Long Term Capitalization of not more than
..65 to 1.00 measured at each fiscal year end. "Long Term Debt to Long Term
Capitalization" shall mean Long Term Funded Debt divided by the sum of Long Term
Funded Debt and Effective Net Worth. "Long Term Funded Debt" shall mean, as
applied to any person or entity, the sum of all indebtedness for borrowed money,
including, without limitation, capital lease obligations, subordinated debt
(including debt subordinated to the Bank), and unreimbursed drawings under
letters of credit, or any other monetary obligation evidenced by a note, bond,
debenture or other agreement of that person or entity with a maturity greater
than one year. "Effective Net Worth" shall mean total assets minus Total
Liabilities. "Total Liabilities" shall mean all liabilities of Guarantor
excluding debt fully subordinated to Bank on terms and conditions acceptable to
Bank, and including capitalized leases and all reserves for deferred taxes and
other deferred sums appearing on the liabilities side of a balance sheet, in
accordance with generally accepted account principles applied on a consistent
basis.


<PAGE>




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

AFFIRMATIVE COVENANTS. Guarantor agrees that from the date hereof and until
final payment in full of the Guaranteed Obligations, unless Bank shall otherwise
consent in writing, Guarantor will: Non- Default Certificate From Guarantor.
Deliver to Bank, with the Financial Statements required below, a certificate
signed by Guarantor, in the form attached hereto as Exhibit A, if Guarantor is
an individual, or by a principal financial officer of Guarantor warranting that
no "Default" as specified in the Loan Documents nor any event which, upon the
giving of notice or lapse of time or both, would constitute such a Default, has
occurred and demonstrating Guarantor's compliance with the financial covenants
contained herein.

NEGATIVE COVENANTS. Guarantor agrees that from the date hereof and until final
payment in full of the Guaranteed Obligations, unless Bank shall otherwise
consent in writing, Guarantor will not: Default on Other Contracts or
Obligations. Default on any material contract with or obligation when due to a
third party or default in the performance of any obligation to a third party
incurred for money borrowed in an amount in excess of $250,000.00. Government
Intervention. Permit the assertion or making of any seizure, vesting or
intervention by or under authority of any governmental entity, as a result of
which the management of Guarantor or any guarantor is displaced of its authority
in the conduct of its respective business or such business is curtailed or
materially impaired. Judgment Entered. Permit the entry of any monetary judgment
or the assessment against, the filing of any tax lien against, or the issuance
of any writ of garnishment or attachment against any property of or debts due
Guarantor in an amount in excess of $500,000.00 which is not discharged or
execution is not stayed within 30 days of entry. Retire or Repurchase Capital
Stock. Retire or otherwise acquire any of its capital stock.

ANNUAL FINANCIAL STATEMENTS. Guarantor shall deliver to Bank, within 90 days
after the close of each fiscal year, audited 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; all on a consolidated and consolidating basis with respect to
Guarantor and its subsidiaries, affiliates and parent or holding company, as
applicable, and in reasonable detail, prepared in conformity with generally
accepted accounting principles, applied on a basis consistent with that of the
preceding year. If audited statements are required, all such statements shall be
examined by an independent certified public accountant acceptable to Bank. The
opinion of such independent certified public accountant shall not be acceptable
to Bank if qualified due to any limitations in scope imposed by Guarantor or any
other person or entity. Any other qualification of the opinion by the accountant
shall render the acceptability of the financial statements subject to Bank's
approval.

PERIODIC FINANCIAL STATEMENTS. Guarantor shall deliver to Bank, within 30 days
of filing, copies of each 10-Q and 10-K report.

WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
GUARANTOR 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 GUARANTY, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE
EXECUTED IN CONNECTION WITH THIS GUARANTY, 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
GUARANTY. 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


<PAGE>



AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED TO OR BEING REPLACED,
SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS GUARANTY.

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


                            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



<PAGE>




Commonwealth of Virginia
City of Roanoke

                            Corporate Acknowledgment

I certify that before me appeared this day John B. Williamson, III, a person
known to me, who after being sworn said he/she is President/Chairman/CEO of RGC
Resources, Inc., a Virginia corporation, and is duly authorized to act on behalf
of said Corporation, that the seal affixed to the foregoing instrument is the
seal of said Corporation and that said instrument was signed and sealed by
him/her on behalf of said Corporation, and being informed of the contents
thereof, acknowledged execution of the foregoing instrument on behalf of said
Corporation.

Witness my hand and official seal, this 28th day of November, 2005.


                        s/Diane L. Conner, Notary Public
      Notary Seal

                                       Diane L. Conner
                                    (Printed Name of Notary)

                         I was commissioned as Diane L. Ross

                        My Commission Expires: February 28, 2006




Commonwealth of Virginia
City of Roanoke

                            Corporate Acknowledgment

I certify that before me appeared this day Howard T. Lyon, a person known to me,
who after being sworn said he/she is Controller/Treasurer of RGC Resources,
Inc., a Virginia corporation, and is duly authorized to act on behalf of said
Corporation, that the seal affixed to the foregoing instrument is the seal of
said Corporation and that said instrument was signed and sealed by him/her on
behalf of said Corporation, and being informed of the contents thereof,
acknowledged execution of the foregoing instrument on behalf of said
Corporation.

Witness my hand and official seal, this 28th day of November, 2005.


                        s/Diane L. Conner, Notary Public
      Notary Seal

                                       Diane L. Conner
                                    (Printed Name of Notary)

                         I was commissioned as Diane L. Ross

                        My Commission Expires: February 28, 2006

<PAGE>



                                    EXHIBIT A

                             NON-DEFAULT CERTIFICATE

In accordance with the terms of the Loan Documents dated November 25, 2005 by
and between Wachovia Bank, National Association and RGC Resources, Inc.
("Guarantor"), I hereby certify that:


1.       I am a principal financial officer of Guarantor;

2.       The enclosed financial statements are prepared in accordance with
         generally accepted accounting principles;

3.       No Default (as defined in the Loan Documents) or any event which, upon
         the giving of notice or lapse of time or both, would constitute such a
         Default, has occurred.

4.       Guarantor is in compliance with the Financial Covenant(s) set forth in
         the Loan Documents, as demonstrated by the calculations contained in
         the Covenant Compliance Certificate attached hereto as Schedule 1.

s/John B. Williamson, III
-------------------------------
Name: John B. Williamson, III
Title: President/Chairman/CEO



<PAGE>


                                   SCHEDULE 1

                         COVENANT COMPLIANCE CERTIFICATE

Guarantor Name: RGC Resources, Inc.
For the fiscal ________________________ ended ____________________

ALL CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN
IN THE LOAN DOCUMENTS.

                 CALCULATIONS FOR ROLLING FOUR QUARTERS COVENANT
               COMPLIANCE FOR THE QUARTER ENDED__________________

INSTRUCTIONS: THIS IS A ROLLING FOUR-QUARTER CALCULATION. THE COLUMN LABELED
Q1 SHOULD CONTAIN INFORMATION FOR THE MOST RECENTLY ENDED QUARTER (I.E.,
MATCHES THE DATE ABOVE). Q2 SHOULD CONTAIN INFORMATION FOR THE IMMEDIATELY
PRECEDING QUARTER-END, AND SO ON FOR Q3 AND Q4.
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

MOST RECENT QUARTER                         PRECEDING THREE QUARTERS

COVENANT:                  Q1               Q2                Q3                Q4               TOTAL
--------

                                              EBIT to Interest Ratio

(a) net income             _____            _____             _____             _____            _____

(b) interest               _____            _____             _____             _____            _____

(c) taxes                  _____            _____             _____             _____            _____

</TABLE>

The sum of the  Totals  of (a) plus (b) plus  (c)  divided  by the  Total of (b)
equals an EBIT to Interest  Ratio of _____.  Required EBIT to Interest  Ratio is
not less than ____ to 1.00.

Compliance? ___Yes ___No


</TEXT>
</DOCUMENT>
</SUBMISSION>
