BB&T

 

Maker

DELTA NATURAL GAS COMPANY, INC.

 

Address

3617 LEXINGTON RD.

9580219605

 

 

WINCHESTER, KY 40391-0000

Customer Number

 

00003

 

 

Note Number

 

MODIFICATION AGREEMENT

 

$                40,000,000.00                                                               10/31/2002                                  $
40,000,000.00                    8/12/2005____

Original Amount of Note                                          
                Original Date                                Modification
Amount                                  Modification Date

 

This Modification Agreement (hereinafter “Agreement”) is made and entered into
this 12th   day of

August, 2005  

,

by and between         DELTA NATURAL GAS COMPANY, INC. , maker(s), co-maker(s),
endorser(s), or other obligor(s) on the Promissory Note (as defined below),
hereinafter also referred to as “Borrower” and Branch Banking and Trust Company,
a North Carolina banking corporation, hereinafter referred to as “Bank”.

 

Witnesseth: Whereas, Borrower has executed and delivered to Bank the following
documents (collectively, the “Loan Documents”):

 

(a) a Promissory Note payable to Bank, which Promissory Note includes the
original Promissory Note and Addendum dated as of October 31, 2002, in the face
principal amount of $40,000,000.00 and all renewals, extensions and
modifications thereof, collectively “Promissory Note”, said Promissory Note
being more particularly identified by description of the original note above;

 

(b) a Loan Agreement dated October 31, 2002 (hereinafter “Loan Agreement”); and

 

Borrower and Bank agree that said Loan Documents be modified only to the limited
extent as is hereinafter set forth; that all other terms, conditions, and
covenants of the Loan Documents remain in full force and effect, and that all
other obligations and covenants of Borrower, except as herein modified, shall
remain in full force and effect, and binding between Borrower and Bank;

 

NOW THEREFORE, in mutual consideration of the premises, the sum of Ten Dollars
($10) and other good and valuable consideration, each to the other parties paid,
the parties hereto agree that

 

1.

The Promissory Note is amended as hereinafter described:

 

INTEREST RATE, PRINCIPAL AND INTEREST PAYMENT TERM MODIFICATIONS (To the extent
no change is made, existing terms continue. Sections not completed are deleted )

 

a.

Principal and interest are payable as follows:

 

[ X ]

Principal (plus any accrued interest not otherwise scheduled herein) is due in
full at maturity on 10/31/2007.

 

[ X ]

Accrued interest is payable                Monthly                       
continuing on            November 30, 2005                     and on the same
day of each calendar period thereafter, with one final payment of all remaining
interest due on             October 31, 2007      .

 

b.

The eighth grammatical paragraph on page 1 of the Promissory Note is hereby
amended and restated so as to read in its entirety as follows: “This note
(‘Note’) is given by the Borrower in connection with a Loan Agreement between
the Borrower and the Bank dated October 31, 2002 (as amended by that certain
Modification Agreement between the Bank and the Borrower dated October 31, 2003;
and that certain Modification Agreement dated October 31, 2004) all as executed
by the Borrower.”

 

2.

The Loan Agreement is amended as hereinafter described:

 

a.

In the paragraph on page 1 of the Loan Agreement, titled “Line of Credit”, the
date “October 31, 2003” is hereby deleted and the date “October 31, 2007” is
inserted in lieu thereof.

 

b.      In Section 7.14 “Fees” , “three tenths of one percent (0.30%)” is hereby
deleted and “one eighth of one percent (0.125%)” is inserted in lieu thereof.

 

If the Promissory Note and Loan Agreement being modified by this Agreement is
signed by more than one person or entity, the modified Promissory Note shall be
the joint and several obligation of all signers and the property and liability
of each and all of them. It is expressly understood and agreed that this
Agreement is a modification only and not a novation. The original obligation of
the Borrower as evidenced by the Promissory Note above described is not
extinguished hereby. It is also understood and agreed that except for the
modification(s) contained herein said Promissory Note, and any other Loan
Documents or Agreements evidencing, securing or relating to the Promissory Note
and all singular terms and conditions thereof, shall be and remain in full force
and effect. This Agreement shall not release or affect the liability of any
co-makers, obligors, endorsers or guarantors of said Promissory Note. Borrower
and Debtor(s)/Grantor(s), if any, jointly and severally consent to the terms of
this Agreement, waive any objection thereto, affirm any and all obligations to
Bank and certify that there are no defenses or offsets against said obligations
or the Bank, including

 

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without limitation the Promissory Note. Bank expressly reserves all rights as to
any party with right of recourse on the aforesaid Promissory Note.

 

Borrower agrees that the only interest charge is the interest actually stated in
the Promissory Note, and that any loan or origination fee shall be deemed
charges rather than interest, which charges are fully earned and non-refundable.
It is further agreed that any late charges are not a charge for the use of money
but are imposed to compensate Bank for some of the administrative services,
costs and losses associated with any delinquency or default under the Promissory
Note, and said charges shall be fully earned and non-refundable when accrued.
All other charges imposed by Bank upon Borrower in connection with the
Promissory Note and the loan including, without limitation, any commitment fees,
loan fees, facility fees, origination fees, discount points, default and late
charges, prepayment fees, statutory attorneys’ fees and reimbursements for costs
and expenses paid by Bank to third parties or for damages incurred by Bank are
and shall be deemed to be charges made to compensate Bank for underwriting and
administrative services and costs, other services, and costs or losses incurred
and to be incurred by Bank in connection with the Promissory Note and the loan
and shall under no circumstances be deemed to be charges for the use of money.
All such charges shall be fully earned and non-refundable when due.

 

The Bank may, at its option, charge any fees for the modification, renewal,
extension, or amendment of any of the terms of the Promissory Note(s) as
permitted by applicable law.

 

If the words “Prime Rate”, “Bank Prime Rate”, “BB&T Prime Rate”, “Bank’s Prime
Rate” or “BB&T’s Prime Rate” are used in this Agreement, they shall refer to the
rate announced by the Bank from time to time as its Prime Rate. The Bank makes
loans both above and below the Prime Rate and uses indexes other than the Prime
Rate. Prime Rate is the name given a rate index used by the Bank and does not in
itself constitute a representation of any preferred rate or treatment.

 

Unless otherwise provided herein, it is expressly understood and agreed by and
between Borrower. Debtor(s)/Grantor(s) and Bank that any and all collateral
(including but not limited to real property, personal property, fixtures,
inventory, accounts, instruments, general intangibles, documents, chattel paper,
and equipment) given as security to insure faithful performance by Borrower and
any other third party of any and all obligations to Bank, however created,
whether now existing or hereafter arising, shall remain as security for the
Promissory Note as modified hereby.

 

It is understood and agreed that if Bank has released collateral herein, it
shall not be required or obligated to take any further steps to release said
collateral from any lien or security interest unless Bank determines, in its
sole discretion, that it may do so without consequence to its secured position
and relative priority in other collateral; and unless Borrower bears the
reasonable cost of such action. No delay or omission on the part of the Bank in
exercising any right hereunder shall operate as a waiver of such right or of any
other right of the Bank, nor shall any delay, omission or waiver on any one
occasion be deemed a bar to or waiver of the same, or of any other right on any
further occasion. Each of the parties signing this Agreement regardless of the
time, order or place of signing waives presentment, demand, protest, and notices
of every kind, and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral if at any time there is available to the Bank collateral
for the Promissory Note, as amended, and to the additions or releases of any
other parties or persons primarily or secondarily liable. Whenever possible the
provisions of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is prohibited by or invalid under such law, such provisions shall be ineffective
to the extent of any such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement. All
rights and obligations arising hereunder shall be governed by and construed in
accordance with the laws of the same state which governs the interpretation and
enforcement of the Promissory Note.

 

From and after any event of default under this Agreement, the Promissory Note,
or any related deed of trust, security agreement or loan agreement, interest
shall accrue on the sum of the principal balance and accrued interest then
outstanding at the variable rate equal to the Bank’s Prime Rate plus 5% per
annum (“Default Rate”), provided that such rate shall not exceed at any time the
highest rate of interest permitted by the laws of the Commonwealth of Kentucky;
and further that such rate shall apply after judgement. In the event of any
default, the then remaining unpaid principal amount and accrued but unpaid
interest then outstanding shall bear interest at the Default Rate until such
principal and interest have been paid in full. Bank shall not be obligated to
accept any check, money order, or other payment instrument marked “payment in
full” on any disputed amount due hereunder, and Bank expressly reserves the
right to reject all such payment instruments. Borrower agrees that tender of its
check or other payment instrument so marked will not satisfy or discharge its
obligation under this Note, disputed or otherwise, even if such check or payment
instrument is inadvertently processed by Bank unless in fact such payment is in
fact sufficient to pay the amount due hereunder.

 

 

DELTA NATURAL GAS COMPANY, INC.

 

 

By

 

 

Glenn R. Jennings, President

 

 

BRANCH BANKING AND TRUST COMPANY

 

 

 

By

 

W. Harvey Coggin, Senior Vice President

 

 

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