Document:

<PAGE>

                                                              EXHIBIT 10(j)

[Bank One Logo]

                               PROMISSORY NOTE
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
  PRINCIPAL       LOAN DATE      MATURITY     LOAN NO    CALL    COLLATERAL     ACCOUNT      OFFICER    INITIALS
<S>               <C>           <C>           <C>        <C>     <C>           <C>           <C>        <C>
$15,000,000.00    07-06-2001    10-31-2002                          001        0122919863      471
----------------------------------------------------------------------------------------------------------------
<FN>
References in the shaded area are for Lender's use only and do not limit the applicability of this document to
any particular loan or item.
----------------------------------------------------------------------------------------------------------------
<S>                                                     <C>
BORROWER:  DELTA NATURAL GAS COMPANY, INC.              LENDER: Bank One, Kentucky, NA
           3617 LEXINGTON ROAD                                  Regional Banking
           WINCHESTER, KY 40391                                 P.O. Box 32500
                                                                Louisville, KY 40232-2500
================================================================================================================
</TABLE>

PRINCIPAL AMOUNT: $15,000,000.00                  DATE OF NOTE: JULY 6, 2001

PROMISE TO PAY. FOR VALUE RECEIVED, DELTA NATURAL GAS COMPANY, INC.
("BORROWER") PROMISES TO PAY TO BANK ONE, KENTUCKY, NA ("LENDER"), OR ORDER,
IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA, THE PRINCIPAL AMOUNT OF
FIFTEEN MILLION & 00/100 DOLLARS ($15,000,000.00) ("TOTAL PRINCIPAL AMOUNT")
OR SO MUCH AS MAY BE OUTSTANDING, TOGETHER WITH INTEREST ON THE UNPAID
OUTSTANDING PRINCIPAL BALANCE FROM THE DATE ADVANCED UNTIL PAID IN FULL.

PAYMENT. THIS NOTE SHALL BE PAYABLE AS FOLLOWS: INTEREST SHALL BE DUE AND
PAYABLE MONTHLY AS IT ACCRUES, COMMENCING ON AUGUST 6, 2001 AND CONTINUING
ON THE SAME DAY OF EACH MONTH THEREAFTER DURING THE TERM OF THIS NOTE, AND
THE OUTSTANDING PRINCIPAL BALANCE OF THIS NOTE, TOGETHER WITH ALL ACCRUED
BUT UNPAID INTEREST, SHALL BE DUE AND PAYABLE ON OCTOBER 31, 2002. The
annual interest rate for this Note is computed on a 365/360 basis; that is,
by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay
Lender at the address designated by Lender from time to time in writing. If
any payment of principal of or interest on this Note shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day. As used herein, the term "BUSINESS DAY" shall mean
any day other than a Saturday, Sunday or any other day on which national
banking associations are authorized to be closed. Unless otherwise agreed
to, in writing, or otherwise required by applicable law, payments will be
applied first to accrued, unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs, late charges and other
charges, provided, however, upon delinquency or other default, Lender
reserves the right to apply payments among principal, interest, late charges,
collection costs and other charges at its discretion. The books and records
of Lender shall be prima facie evidence of all outstanding principal of and
accrued but unpaid interest on this Note. If this Note is governed by or is
executed in connection with a loan agreement, this Note is subject to the
terms and provisions thereof.

VARIABLE INTEREST RATE. THE INTEREST RATE ON THIS NOTE IS SUBJECT TO
FLUCTUATION BASED UPON THE LIBOR RATE OF INTEREST IN EFFECT FROM TIME TO
TIME (THE "INDEX"). "LIBOR RATE" SHALL MEAN WITH RESPECT TO EACH INTEREST
PERIOD, THE OFFERED RATE FOR U.S. DOLLAR DEPOSITS OF NOT LESS THAN
$1,000,000.00 AS OF 11:00 A.M. CITY OF LONDON, ENGLAND TIME TWO LONDON
BUSINESS DAYS PRIOR TO THE FIRST DATE OF EACH INTEREST PERIOD OF THIS NOTE
AS SHOWN ON THE DISPLAY DESIGNATED AS "BRITISH BANKERS ASSOC. INTEREST
SETTLEMENT RATES" ON THE TELERATE SYSTEM ("TELERATE"), PAGE 3750 OR PAGE
3740, OR SUCH OTHER PAGE OR PAGES AS MAY REPLACE SUCH PAGES ON TELERATE FOR
THE PURPOSE OF DISPLAYING SUCH RATE. PROVIDED, HOWEVER, THAT IF SUCH RATE IS
NOT AVAILABLE ON TELERATE THEN SUCH OFFERED RATE SHALL BE OTHERWISE
INDEPENDENTLY DETERMINED BY LENDER FROM AN ALTERNATE, SUBSTANTIALLY SIMILAR
INDEPENDENT SOURCE AVAILABLE TO LENDER OR SHALL BE CALCULATED BY LENDER BY A
SUBSTANTIALLY SIMILAR METHODOLOGY AS THAT THERETOFORE USED TO DETERMINE SUCH
OFFERED RATE IN TELERATE. "LONDON BUSINESS DAY" MEANS ANY DAY OTHER THAN A
SATURDAY, SUNDAY OR A DAY ON WHICH BANKING INSTITUTIONS ARE GENERALLY
AUTHORIZED OR OBLIGATED BY LAW OR EXECUTIVE ORDER TO CLOSE IN THE CITY OF
LONDON, ENGLAND. EACH CHANGE IN THE RATE TO BE CHARGED ON THIS NOTE WILL
BECOME EFFECTIVE WITHOUT NOTICE ON THE COMMENCEMENT OF EACH INTEREST PERIOD
BASED UPON THE INDEX THEN IN EFFECT. "INTEREST PERIOD" MEANS EACH
CONSECUTIVE ONE MONTH PERIOD (THE FIRST OF WHICH SHALL COMMENCE ON THE DATE
OF THIS NOTE) EFFECTIVE AS OF THE FIRST DAY OF EACH INTEREST PERIOD AND
ENDING ON THE LAST DAY OF EACH INTEREST PERIOD, PROVIDED THAT IF ANY
INTEREST PERIOD IS SCHEDULED TO END ON A DATE FOR WHICH THERE IS NO
NUMERICAL EQUIVALENT TO THE DATE ON WHICH THE INTEREST PERIOD COMMENCED,
THEN IT SHALL END INSTEAD ON THE LAST DAY OF SUCH CALENDER MONTH. "BORROWER"
MAY PREPAY ALL OR ANY PORTION OF THE PRINCIPAL AMOUNT OF THIS NOTE BEARING
INTEREST AT A LIBOR RATE, PROVIDED THAT IF BORROWER MAKES ANY SUCH PREPAYMENT
OTHER THAN ON THE LAST DAY OF AN INTEREST PERIOD, BORROWER SHALL PAY ALL
ACCRUED INTEREST ON THE PRINCIPAL AMOUNT PREPAID WITH SUCH PREPAYMENT AND,
ON DEMAND, SHALL REIMBURSE LENDER AND HOLD LENDER HARMLESS FROM ALL LOSSES
AND EXPENSES INCURRED BY LENDER AS A RESULT OF SUCH PREPAYMENT, INCLUDING,
WITHOUT LIMITATION, ANY LOSSES AND EXPENSES ARISING FROM THE LIQUIDATION OR
REEMPLOYMENT OF DEPOSITS ACQUIRED TO FUND OR MAINTAIN THE PRINCIPAL AMOUNT
PREPAID. SUCH REIMBURSEMENT SHALL BE CALCULATED AS THOUGH LENDER FUNDED THE
PRINCIPAL AMOUNT PREPAID THROUGH THE PURCHASE OF U.S. DOLLAR DEPOSITS IN THE
LONDON, ENGLAND INTERBANK MARKET HAVING A MATURITY CORRESPONDING TO SUCH
INTEREST PERIOD AND BEARING AN INTEREST RATE EQUAL TO THE LIBOR RATE FOR
SUCH INTEREST PERIOD, WHETHER IN FACT THAT IS THE CASE OR NOT. LENDER'S
DETERMINATION OF THE AMOUNT OF SUCH REIMBURSEMENT SHALL BE CONCLUSIVE IN THE
ABSENCE OF MANIFEST ERROR. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE UNPAID
PRINCIPAL BALANCE OF THIS NOTE WILL ACCRUE INTEREST AT A RATE PER ANNUM
WHICH WILL FROM TIME TO TIME BE EQUAL TO THE SUM OF THE INDEX, PLUS 1.000%.
NOTICE: UNDER NO CIRCUMSTANCES WILL THE INTEREST RATE ON THIS NOTE BE MORE
THAN THE MAXIMUM RATE ALLOWED BY APPLICABLE LAW.

PREPAYMENT. Borrower may pay without fee all or a portion of the principal
amount owed hereunder earlier than it is due. All prepayments shall be
applied to the indebtedness owing hereunder in such order and manner as
Lender may from time to time determine in its sole discretion.

LATE CHARGE. If a payment is 10 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT OR $25.00, WHICHEVER IS GREATER.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment of principal or interest when due under
this Note or any other indebtedness owing now or hereafter by Borrower to
Lender; (b) failure of Borrower or any other party to comply with or perform
any term, obligation, covenant or condition contained in this Note or in any
other promissory note, credit agreement, loan agreement, guaranty, security
agreement, mortgage, deed of trust or any other instrument, agreement or
document, whether now or hereafter existing, executed in connection with
this Note (the Note and all such other instruments, agreements, and
documents shall be collectively known herein as the "RELATED DOCUMENTS"); (c)
Any representation or statement made or furnished to Lender herein, in any
of the Related Documents or in connection with any of the foregoing is false
or misleading in any material respect; (d) Borrower or any other party
liable for the payment of this Note, whether as maker, endorser, guarantor,
surety or otherwise, becomes insolvent or bankrupt, has a receiver or
trustee appointed for any part of its property, makes an assignment for the
benefit of its creditors, or any proceeding is commenced either by any such
party or against it under any bankruptcy or insolvency laws; (e) the
occurrence of any event of default specified in any of the other Related
Documents or in any other agreement now or hereafter arising between
Borrower and Lender; (f) the occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing now or hereafter by
Borrower to any third party; or (g) the liquidation, termination,
dissolution, death or legal incapacity of Borrower or any other party liable
for the payment of this Note, whether as maker, endorser, guarantor, surety,
or otherwise.

LENDER'S RIGHTS. Upon default, Lender may at its option, without further
notice or demand (i) declare the entire unpaid principal balance on this
Note, all accrued unpaid interest and all other costs and expenses for which
Borrower is responsible for under this Note and any other Related Document
immediately due, (ii) refuse to advance any additional amounts under this
Note, (iii) foreclose all liens securing payment hereof, (iv) pursue any
other rights, remedies and recourses available to the Lender, including
without limitation, any such rights, remedies or recourses under the Related
Documents, at law or in equity, or (v) pursue any combination of the
foregoing. Upon default, including failure to pay upon final maturity,
Lender, at its option, may also, if permitted under applicable law, do one
or both of the following: (a) increase the variable interest rate on this
Note to 4.000 percentage points over the Index, and (b) add any unpaid
accrued interest to principal and such sum will bear interest therefrom
until paid at the rate provided in this Note (including any increased rate).
The interest rate will not exceed the maximum rate permitted by applicable
law. Lender may hire an attorney to help collect this Note if Borrower does
not pay and Borrower will pay Lender's reasonable attorneys' fees and all
other costs of collection, unless prohibited by applicable law. This Note
has been delivered to Lender and accepted by Lender in the Commonwealth of
Kentucky. Subject to the provisions on arbitration, this Note shall be
governed by and construed in accordance with the laws of the Commonwealth of
Kentucky without regard to any conflict of laws or provisions thereof.

PURPOSE. Borrower agrees that no advances under this Note shall be used for
personal, family, or household purposes and that all advances hereunder shall
be used solely for business, commercial, agricultural or other similar
purposes.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge
with which Borrower pays is later dishonored.

RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Borrower grants to Lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers
to Lender all Borrower's right, title and interest in and to Borrower's
accounts with Lender (whether checking, savings, or any other account),
including without limitation all accounts held jointly with someone else and
all accounts Borrower may open in the future. Borrower authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all sums owing
on this Note against any and all such accounts.

LINE OF CREDIT. This Note evidences a revolving line of credit. Borrower may
request advances and make payments hereunder from time to time, provided
that it is understood and agreed that the aggregate principal amount
outstanding from time to time hereunder shall not at any time exceed the
Total Principal Amount. The unpaid principal balance of this Note shall
increase and decrease with each new advance or

<PAGE>
<PAGE>

07-06-2001                    PROMISSORY NOTE                         PAGE 2
LOAN NO                         (CONTINUED)
============================================================================
payment hereunder, as the case may be. Subject to the terms hereof, Borrower
may borrow, repay and reborrow hereunder. Advances under this Note as well
as directions for payment from Borrower's accounts, may be requested orally
or in writing by Borrower or by an authorized person. Lender may, but need
not, require that all oral requests be confirmed in writing. Borrower agrees
to be liable for all sums either: (a) advanced in accordance with the
instructions of an authorized person or (b) credited to any of Borrower's
accounts with Lender.

ARBITRATION. Lender and Borrower agree that upon the written demand of
either party, whether made before or after the institution of any legal
proceedings, but prior to the rendering of any judgment in that proceeding,
all disputes, claims and controversies between them, whether individual,
joint, or class in nature, arising from this Note, any Related Document or
otherwise, including without limitation contract disputes and tort claims,
shall be resolved by binding arbitration pursuant to the Commercial Rules of
the American Arbitration Association ("AAA"). Any arbitration proceeding
held pursuant to this arbitration provision shall be conducted in the city
nearest the Borrower's address having an AAA regional office, or at any
other place selected by mutual agreement of the parties. No act to take or
dispose of any collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This arbitration
provision shall not limit the right of either party during any dispute,
claim or controversy to seek, use and employ ancillary, or preliminary
rights and/or remedies, judicial or otherwise, for the purposes of realizing
upon, preserving, protecting, foreclosing upon or proceeding under forcible
entry and detainer for possession of, any real or personal property, and any
such action shall not be deemed an election of remedies. Such remedies
include, without limitation, obtaining injunctive relief or a temporary
restraining order, invoking a power of sale under any deed of trust or
mortgage, obtaining a writ of attachment or imposition of a receivership or
exercising any rights relating to personal property, including exercising
the right of set-off or taking or disposing of such property with or without
judicial process pursuant to the Uniform Commercial Code. Any disputes,
claims, or controversies concerning the lawfulness or reasonableness of an
act or exercise of any right or remedy, concerning any collateral, including
any claim to rescind, reform, or otherwise modify any agreement relating to
the collateral, shall also be arbitrated; provided, however that no
arbitrator shall have the right or the power to enjoin or restrain any act
of either party. Judgment upon any award rendered by any arbitrator may be
entered in any court having jurisdiction. The statute of limitations,
estoppel, waiver, laches and similar doctrines which would otherwise be
applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of any action for these purposes. The
Federal Arbitration Act (Title 9 of the United States Code) shall apply to
the construction, interpretation, and enforcement of this arbitration
provision.

ADDITIONAL PROVISION REGARDING LATE CHARGES. In the "Late Charge" provision
set forth above, the following language is hereby added after the word
"greater": "up to the maximum amount of One Thousand Five Hundred Dollars
($1500.00) per late charge".

AVAILABILITY FEE. Borrower shall pay to Lender an availability fee (the
"Availability Fee") with respect to each calendar quarter during the term of
the Note, based on the unused amount of the Note. The Availability Fee shall
be an amount equal to A x (B - C) x (D / E), where A equals .30%; B equals
the original amount of the Note; C equals the average daily outstanding
principal balance of the Loan during the calendar quarter; D equals the
actual number of days elapsed during the calendar quarter; and E equals (360
or 365, depending on interest accrual basis). Each Availability Fee shall be
due and payable to Lender quarterly, in arrears, within fifteen (15) days
after Borrower's receipt of an invoice for the Availability Fee from the
Lender.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights
or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by
law, waive presentment, demand for payment, protest and notice of dishonor.
Upon any change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this Note, or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender's
security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this Note without the consent of
or notice to anyone other than the party with whom the modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER
AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY
OF THE NOTE.

BORROWER:

DELTA NATURAL GAS COMPANY, INC.

By: Glenn R. Jennings, President & CEO
   -----------------------------------------
    AUTHORIZED SIGNER, TITLE

============================================================================<PAGE>

                                                              EXHIBIT 10(k)

[Bank One Logo]

                               PROMISSORY NOTE
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
  PRINCIPAL       LOAN DATE      MATURITY     LOAN NO    CALL    COLLATERAL     ACCOUNT      OFFICER    INITIALS
<S>               <C>           <C>           <C>        <C>     <C>           <C>           <C>        <C>
$25,000,000.00    07-06-2001    10-31-2002                          001        0122919863      471
----------------------------------------------------------------------------------------------------------------
<FN>
References in the shaded area are for Lender's use only and do not limit the applicability of this document to
any particular loan or item.
----------------------------------------------------------------------------------------------------------------
<S>                                                     <C>
BORROWER:  DELTA NATURAL GAS COMPANY, INC.              LENDER: Bank One, Kentucky, NA
           3617 LEXINGTON ROAD                                  Regional Banking
           WINCHESTER, KY 40391                                 P.O. Box 32500
                                                                Louisville, KY 40232-2500
================================================================================================================
</TABLE>

PRINCIPAL AMOUNT: $25,000,000.00                  DATE OF NOTE: JULY 6, 2001

PROMISE TO PAY. FOR VALUE RECEIVED, DELTA NATURAL GAS COMPANY, INC.
("BORROWER") PROMISES TO PAY TO BANK ONE, KENTUCKY, NA ("LENDER"), OR ORDER,
IN LAWFUL MONEY OF THE UNITED STATES OF AMERICA, THE PRINCIPAL AMOUNT OF
TWENTY FIVE MILLION & 00/100 DOLLARS ($25,000,000.00) ("TOTAL PRINCIPAL
AMOUNT") OR SO MUCH AS MAY BE OUTSTANDING, TOGETHER WITH INTEREST ON THE
UNPAID OUTSTANDING PRINCIPAL BALANCE FROM THE DATE ADVANCED UNTIL PAID IN
FULL.

PAYMENT. THIS NOTE SHALL BE PAYABLE AS FOLLOWS: INTEREST SHALL BE DUE AND
PAYABLE MONTHLY AS IT ACCRUES, COMMENCING ON AUGUST 6, 2001 AND CONTINUING
ON THE SAME DAY OF EACH MONTH THEREAFTER DURING THE TERM OF THIS NOTE, AND
THE OUTSTANDING PRINCIPAL BALANCE OF THIS NOTE, TOGETHER WITH ALL ACCRUED
BUT UNPAID INTEREST, SHALL BE DUE AND PAYABLE ON OCTOBER 31, 2002. The
annual interest rate for this Note is computed on a 365/360 basis; that is,
by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. Borrower will pay
Lender at the address designated by Lender from time to time in writing. If
any payment of principal of or interest on this Note shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day. As used herein, the term "BUSINESS DAY" shall mean
any day other than a Saturday, Sunday or any other day on which national
banking associations are authorized to be closed. Unless otherwise agreed
to, in writing, or otherwise required by applicable law, payments will be
applied first to accrued, unpaid interest, then to principal, and any
remaining amount to any unpaid collection costs, late charges and other
charges, provided, however, upon delinquency or other default, Lender
reserves the right to apply payments among principal, interest, late charges,
collection costs and other charges at its discretion. The books and records
of Lender shall be prima facie evidence of all outstanding principal of and
accrued but unpaid interest on this Note. If this Note is governed by or is
executed in connection with a loan agreement, this Note is subject to the
terms and provisions thereof.

VARIABLE INTEREST RATE. THE INTEREST RATE ON THIS NOTE IS SUBJECT TO
FLUCTUATION BASED UPON THE LIBOR RATE OF INTEREST IN EFFECT FROM TIME TO
TIME (THE "INDEX"). "LIBOR RATE" SHALL MEAN WITH RESPECT TO EACH INTEREST
PERIOD, THE OFFERED RATE FOR U.S. DOLLAR DEPOSITS OF NOT LESS THAN
$1,000,000.00 AS OF 11:00 A.M. CITY OF LONDON, ENGLAND TIME TWO LONDON
BUSINESS DAYS PRIOR TO THE FIRST DATE OF EACH INTEREST PERIOD OF THIS NOTE
AS SHOWN ON THE DISPLAY DESIGNATED AS "BRITISH BANKERS ASSOC. INTEREST
SETTLEMENT RATES" ON THE TELERATE SYSTEM ("TELERATE"), PAGE 3750 OR PAGE
3740, OR SUCH OTHER PAGE OR PAGES AS MAY REPLACE SUCH PAGES ON TELERATE FOR
THE PURPOSE OF DISPLAYING SUCH RATE. PROVIDED, HOWEVER, THAT IF SUCH RATE IS
NOT AVAILABLE ON TELERATE THEN SUCH OFFERED RATE SHALL BE OTHERWISE
INDEPENDENTLY DETERMINED BY LENDER FROM AN ALTERNATE, SUBSTANTIALLY SIMILAR
INDEPENDENT SOURCE AVAILABLE TO LENDER OR SHALL BE CALCULATED BY LENDER BY A
SUBSTANTIALLY SIMILAR METHODOLOGY AS THAT THERETOFORE USED TO DETERMINE SUCH
OFFERED RATE IN TELERATE. "LONDON BUSINESS DAY" MEANS ANY DAY OTHER THAN A
SATURDAY, SUNDAY OR A DAY ON WHICH BANKING INSTITUTIONS ARE GENERALLY
AUTHORIZED OR OBLIGATED BY LAW OR EXECUTIVE ORDER TO CLOSE IN THE CITY OF
LONDON, ENGLAND. EACH CHANGE IN THE RATE TO BE CHARGED ON THIS NOTE WILL
BECOME EFFECTIVE WITHOUT NOTICE ON THE COMMENCEMENT OF EACH INTEREST PERIOD
BASED UPON THE INDEX THEN IN EFFECT. "INTEREST PERIOD" MEANS EACH
CONSECUTIVE ONE MONTH PERIOD (THE FIRST OF WHICH SHALL COMMENCE ON THE DATE
OF THIS NOTE) EFFECTIVE AS OF THE FIRST DAY OF EACH INTEREST PERIOD AND
ENDING ON THE LAST DAY OF EACH INTEREST PERIOD, PROVIDED THAT IF ANY
INTEREST PERIOD IS SCHEDULED TO END ON A DATE FOR WHICH THERE IS NO
NUMERICAL EQUIVALENT TO THE DATE ON WHICH THE INTEREST PERIOD COMMENCED, THEN
IT SHALL END INSTEAD ON THE LAST DAY OF SUCH CALENDER MONTH. "BORROWER" MAY
PREPAY ALL OR ANY PORTION OF THE PRINCIPAL AMOUNT OF THIS NOTE BEARING
INTEREST AT A LIBOR RATE, PROVIDED THAT IF BORROWER MAKES ANY SUCH PREPAYMENT
OTHER THAN ON THE LAST DAY OF AN INTEREST PERIOD, BORROWER SHALL PAY ALL
ACCRUED INTEREST ON THE PRINCIPAL AMOUNT PREPAID WITH SUCH PREPAYMENT AND,
ON DEMAND, SHALL REIMBURSE LENDER AND HOLD LENDER HARMLESS FROM ALL LOSSES
AND EXPENSES INCURRED BY LENDER AS A RESULT OF SUCH PREPAYMENT, INCLUDING,
WITHOUT LIMITATION, ANY LOSSES AND EXPENSES ARISING FROM THE LIQUIDATION OR
REEMPLOYMENT OF DEPOSITS ACQUIRED TO FUND OR MAINTAIN THE PRINCIPAL AMOUNT
PREPAID. SUCH REIMBURSEMENT SHALL BE CALCULATED AS THOUGH LENDER FUNDED THE
PRINCIPAL AMOUNT PREPAID THROUGH THE PURCHASE OF U.S. DOLLAR DEPOSITS IN THE
LONDON, ENGLAND INTERBANK MARKET HAVING A MATURITY CORRESPONDING TO SUCH
INTEREST PERIOD AND BEARING AN INTEREST RATE EQUAL TO THE LIBOR RATE FOR
SUCH INTEREST PERIOD, WHETHER IN FACT THAT IS THE CASE OR NOT. LENDER'S
DETERMINATION OF THE AMOUNT OF SUCH REIMBURSEMENT SHALL BE CONCLUSIVE IN THE
ABSENCE OF MANIFEST ERROR. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE UNPAID
PRINCIPAL BALANCE OF THIS NOTE WILL ACCRUE INTEREST AT A RATE PER ANNUM
WHICH WILL FROM TIME TO TIME BE EQUAL TO THE SUM OF THE INDEX, PLUS 1.000%.
NOTICE: UNDER NO CIRCUMSTANCES WILL THE INTEREST RATE ON THIS NOTE BE MORE
THAN THE MAXIMUM RATE ALLOWED BY APPLICABLE LAW.

PREPAYMENT. Borrower may pay without fee all or a portion of the principal
amount owed hereunder earlier than it is due. All prepayments shall be
applied to the indebtedness owing hereunder in such order and manner as
Lender may from time to time determine in its sole discretion.

LATE CHARGE. If a payment is 10 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT OR $25.00, WHICHEVER IS GREATER.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment of principal or interest when due under
this Note or any other indebtedness owing now or hereafter by Borrower to
Lender; (b) failure of Borrower or any other party to comply with or perform
any term, obligation, covenant or condition contained in this Note or in any
other promissory note, credit agreement, loan agreement, guaranty, security
agreement, mortgage, deed of trust or any other instrument, agreement or
document, whether now or hereafter existing, executed in connection with
this Note (the Note and all such other instruments, agreements, and
documents shall be collectively known herein as the "RELATED DOCUMENTS"); (c)
Any representation or statement made or furnished to Lender herein, in any
of the Related Documents or in connection with any of the foregoing is false
or misleading in any material respect; (d) Borrower or any other party
liable for the payment of this Note, whether as maker, endorser, guarantor,
surety or otherwise, becomes insolvent or bankrupt, has a receiver or
trustee appointed for any part of its property, makes an assignment for the
benefit of its creditors, or any proceeding is commenced either by any such
party or against it under any bankruptcy or insolvency laws; (e) the
occurrence of any event of default specified in any of the other Related
Documents or in any other agreement now or hereafter arising between
Borrower and Lender; (f) the occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing now or hereafter by
Borrower to any third party; or (g) the liquidation, termination,
dissolution, death or legal incapacity of Borrower or any other party liable
for the payment of this Note, whether as maker, endorser, guarantor, surety,
or otherwise.

LENDER'S RIGHTS. Upon default, Lender may at its option, without further
notice or demand (i) declare the entire unpaid principal balance on this
Note, all accrued unpaid interest and all other costs and expenses for which
Borrower is responsible for under this Note and any other Related Document
immediately due, (ii) refuse to advance any additional amounts under this
Note, (iii) foreclose all liens securing payment hereof, (iv) pursue any
other rights, remedies and recourses available to the Lender, including
without limitation, any such rights, remedies or recourses under the Related
Documents, at law or in equity, or (v) pursue any combination of the
foregoing. Upon default, including failure to pay upon final maturity,
Lender, at its option, may also, if permitted under applicable law, do one
or both of the following: (a) increase the variable interest rate on this
Note to 4.000 percentage points over the Index, and (b) add any unpaid
accrued interest to principal and such sum will bear interest therefrom
until paid at the rate provided in this Note (including any increased rate).
The interest rate will not exceed the maximum rate permitted by applicable
law. Lender may hire an attorney to help collect this Note if Borrower does
not pay and Borrower will pay Lender's reasonable attorneys' fees and all
other costs of collection, unless prohibited by applicable law. This Note
has been delivered to Lender and accepted by Lender in the Commonwealth of
Kentucky. Subject to the provisions on arbitration, this Note shall be
governed by and construed in accordance with the laws of the Commonwealth of
Kentucky without regard to any conflict of laws or provisions thereof.

PURPOSE. Borrower agrees that no advances under this Note shall be used for
personal, family, or household purposes and that all advances hereunder shall
be used solely for business, commercial, agricultural or other similar
purposes.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge
with which Borrower pays is later dishonored.

RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Borrower grants to Lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers
to Lender all Borrower's right, title and interest in and to Borrower's
accounts with Lender (whether checking, savings, or any other account),
including without limitation all accounts held jointly with someone else and
all accounts Borrower may open in the future. Borrower authorizes Lender, to
the extent permitted by applicable law, to charge or setoff all sums owing
on this Note against any and all such accounts.

LINE OF CREDIT. This Note evidences a revolving line of credit. Borrower may
request advances and make payments hereunder from time to time, provided
that it is understood and agreed that the aggregate principal amount
outstanding from time to time hereunder shall not at any time exceed the
Total Principal Amount. The unpaid principal balance of this Note shall
increase and decrease with each new advance or

<PAGE>
<PAGE>

07-06-2001                    PROMISSORY NOTE                         PAGE 2
LOAN NO                         (CONTINUED)
============================================================================
payment hereunder, as the case may be. Subject to the terms hereof, Borrower
may borrow, repay and reborrow hereunder. Advances under this Note as well
as directions for payment from Borrower's accounts, may be requested orally
or in writing by Borrower or by an authorized person. Lender may, but need
not, require that all oral requests be confirmed in writing. Borrower agrees
to be liable for all sums either: (a) advanced in accordance with the
instructions of an authorized person or (b) credited to any of Borrower's
accounts with Lender.

ARBITRATION. Lender and Borrower agree that upon the written demand of
either party, whether made before or after the institution of any legal
proceedings, but prior to the rendering of any judgment in that proceeding,
all disputes, claims and controversies between them, whether individual,
joint, or class in nature, arising from this Note, any Related Document or
otherwise, including without limitation contract disputes and tort claims,
shall be resolved by binding arbitration pursuant to the Commercial Rules of
the American Arbitration Association ("AAA"). Any arbitration proceeding
held pursuant to this arbitration provision shall be conducted in the city
nearest the Borrower's address having an AAA regional office, or at any
other place selected by mutual agreement of the parties. No act to take or
dispose of any collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This arbitration
provision shall not limit the right of either party during any dispute,
claim or controversy to seek, use and employ ancillary, or preliminary
rights and/or remedies, judicial or otherwise, for the purposes of realizing
upon, preserving, protecting, foreclosing upon or proceeding under forcible
entry and detainer for possession of, any real or personal property, and any
such action shall not be deemed an election of remedies. Such remedies
include, without limitation, obtaining injunctive relief or a temporary
restraining order, invoking a power of sale under any deed of trust or
mortgage, obtaining a writ of attachment or imposition of a receivership or
exercising any rights relating to personal property, including exercising
the right of set-off or taking or disposing of such property with or without
judicial process pursuant to the Uniform Commercial Code. Any disputes,
claims, or controversies concerning the lawfulness or reasonableness of an
act or exercise of any right or remedy, concerning any collateral, including
any claim to rescind, reform, or otherwise modify any agreement relating to
the collateral, shall also be arbitrated; provided, however that no
arbitrator shall have the right or the power to enjoin or restrain any act
of either party. Judgment upon any award rendered by any arbitrator may be
entered in any court having jurisdiction. The statute of limitations,
estoppel, waiver, laches and similar doctrines which would otherwise be
applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of any action for these purposes. The
Federal Arbitration Act (Title 9 of the United States Code) shall apply to
the construction, interpretation, and enforcement of this arbitration
provision.

RENEWAL AND EXTENSION. This Note is given in replacement, renewal and/or
extension of, but not extinguishing the indebtedness evidenced by, that
promissory note dated February 21, 2001 executed by Borrower in the original
principal amount of $25,000,000.00, and is not a novation thereof. All
interest evidenced by the note being replaced, renewed and/or extended by
this instrument shall continue to be due and payable until paid.

ADDITIONAL PROVISION REGARDING LATE CHARGES. In the "Late Charge" provision
set forth above, the following language is hereby added after the word
"greater": "up to the maximum amount of One Thousand Five Hundred Dollars
($1500.00) per late charge".

AVAILABILITY FEE. Borrower shall pay to Lender an availability fee (the
"Availability Fee") with respect to each calendar quarter during the term of
the Note, based on the unused amount of the Note. The Availability Fee shall
be an amount equal to A x (B - C) x (D / E), where A equals .30%; B equals
the original amount of the Note; C equals the average daily outstanding
principal balance of the Loan during the calendar quarter; D equals the
actual number of days elapsed during the calendar quarter; and E equals (360
or 365, depending on interest accrual basis). Each Availability Fee shall be
due and payable to Lender quarterly, in arrears, within fifteen (15) days
after Borrower's receipt of an invoice for the Availability Fee from the
Lender.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights
or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by
law, waive presentment, demand for payment, protest and notice of dishonor.
Upon any change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this Note, or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender's
security interest in the collateral; and take any other action deemed
necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this Note without the consent of
or notice to anyone other than the party with whom the modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER
AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY
OF THE NOTE.

BORROWER:

DELTA NATURAL GAS COMPANY, INC.

By: Glenn R. Jennings, President & CEO
   -----------------------------------------
    AUTHORIZED SIGNER, TITLE

============================================================================

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