Document:

EXHIBIT 10.6

AGREEMENT AND PLAN OF
MEMBERSHIP INTEREST EXCHANGE AND SHARE EXCHANGE

by and between

NORTHPORT
EQUITY TRADING, INC.

a New York Corporation

and

TECHNOLOGY
SOLUTIONS INTERNATIONAL, L.L.C.

a Colorado Limited Liability Company

effective as of July     , 1999

AGREEMENT AND
PLAN OF MEMBERSHIP INTEREST EXCHANGE AND SHARE EXCHANGE

     THIS AGREEMENT AND PLAN
OF MEMBERSHIP EXCHANGE AND SHARE EXCHANGE, made and entered into this 20th day of August, 1999, by and
between Northport Equity Trading, Inc., a New York corporation with its principal place of business located at 40 Exchange Place,
Suite 1601, New York, New York 10005-2701 ("NET"), and Technology Solutions International, LLC, a Colorado Limited Liability Company
with its principal place of business located at 600 17th Street, Suite 2008-S, Denver, Colorado 80202 ("TSI").

Premises

     A.     This Agreement
provides for the purchase of 50% of the issued and outstanding membership interests of TSI by NET and
in connection therewith, the issuance of 133,000 shares of common stock of NET to the TSI members as\
listed on Exhibit "A."

     B.     The boards of directors of NET and the Manager of TSI have determined, subject to the terms and conditions set forth
in this Agreement, that the exchange contemplated hereby is desirable and in the best interests of their stockholders and members,
respectively. This Agreement is being entered into for the purpose of setting forth the terms and conditions of the merger.

Agreement

NOW, THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set
forth and the mutual benefits to the parties to be derived herefrom, it is hereby agreed as follows:

REPRESENTATIONS,
COVENANTS AND WARRANTIES OF NET

As an inducement
to and to obtain the reliance of TSI, NET represents and warrants as follows: 

     Section 1.1     Organization. NET is a corporation duly organized, validly existing, and in good standing under the
laws of New York and has the corporate power and is duly authorized, qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do business as a foreign corporation in the jurisdiction
in which the character and location of the assets owned by it or the nature of the business transacted by it requires qualification.
Included in the NET Schedules (as hereinafter defined) are complete and correct copies of the articles of incorporation, bylaws and
amendments thereto of NET as in effect on the date hereof. The execution and delivery of this Agreement does not and the
consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not violate any provision of
NET's articles of incorporation or bylaws. NET has full power, authority and legal right and has taken all action required by law,
its articles of incorporation, its bylaws or otherwise to authorize the execution and delivery of this Agreement.

     Section 1.2     Capitalization. The authorized capitalization of NET consists of 15,000,000 Common Shares, $0.001 par
value per share, and 5,000,000 Preferred Shares, $0.001 par value per share. As of the Closing date hereof, NET will have no more
than 8,760,000 common shares issued and outstanding. As of the Closing Date hereof, no shares of Preferred Stock will be issued or
outstanding. All issued and outstanding shares are legally issued, fully paid and nonassessable and are not issued in violation of
the preemptive or other rights of any person.

     Section 1.3     Subsidiaries
and Predecessor Corporations. NET does not have any other subsidiaries and does not own,
beneficially or of record, any shares of any other corporation.

     Section 1.4     Options and Warrants.
 There are no existing options, warrants, calls or commitments of any character
to which NET is a party and by which it is bound.

     Section 1.5     Tax
Matters; Books & Records; Financial Statements.

	 	(a)	
The books and records, financial and others, of NET are in all material respects complete and correct
and have been maintained in accordance with good business accounting practices;
	 	 	 
	 	(b)	
Except in the ordinary course of business, NET has no outstanding liabilities with respect to the payment of any
federal, state, county, local or other taxes (including any deficiences, interest of penalities);
	 	 	 
	 	(c)	
Financial Statements.  Subject to Section 1.19, NET has delivered or will deliver to TSI the following statements:
unaudited financial statements for the period January 1, 1999 through and including July 31, 1999,
and unaudited financial statements for the period July 10, 1998 (date of inception) to December 31, 1998,
including a balance sheet, statement of shareholder's equity and an income statement.  The
Financial Statements are complete and correct in all material respects and have been prepared in accordance with generally
acceptable accounting principles applied on a consistent basis throughout the periods indicated and with
each other, except that the unaudited Financial Statements may not contain all footnotes required
by generally accepted accounting principles.
	 	 	 

     Section 1.6     Information.   
The information concerning NET as set forth in this Agreement and in the NET schedules is complete
and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which they were made, not misleading.

     Section 1.7     Absence
of Certain Changes or Events.   Except as described herein or in the NET Schedules, since December 31, 1998:

	 	(a)	
NET has not:     (i) amended its certificate of incorporation, except for an
amendment to increase the number of its authorized shares of capital stock; (ii) waived any
rights of value which in the aggregate are extraordinary or material considering the business
of NET; (iii) made any material change in its method of management, operation or accounting;
or (iv) made any accural or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present or former officer
or employee.
	 	 	 
	 	(b)	
NET has not: (i) granted or agreed to grant any options, warrants or other rights
for its certificates, bonds or other corporate securities calling for the issuance thereof, which
option, warrant or other right has not been cancelled as of the Closing Date; (ii) borrowed or
agreed to borrow any funds or incurred or become subject to, any material obligation or
liability, (absolute or contingent) except liabikities incurred in the ordinary course of business; and
	 	 	 
	 	(c)	
to the best knowledge of NET, it has not become subject to any law or regulation
which mterially and dversely affects, or in the future may adverely affect, the business,
operations, properties, assets or condition of NET.
	 	 	 

     Section 1.8     Title
and Related Matters.  NET has good and marketable title to and is the sole
and exclusive owner of all of its properties, inventory, interests in properties and assets, real and
personal (collectively, the "Assets") which are reflected in the most recent NET unaudited balance sheet
and the NET Schedules or acquired after that date (except properties, interests in properties and assets
sold or otherwise disposed of since such date in the ordinary vcourse of business), free and clear of all
liens, pledges, changes or encumbrances.  Except as set forth in the NET  Schedules, NET owns free
and clear of any liens, claims, encumbrances, royalty interests or other restrictions or limittions of any
nature whatsoever and all procedures, techniques, marketing plans, business plans, methods of
management or other information utilized in connection with NET's business.  Except as set forth in the
NET Schedules, no third party has any right to, and NET has not received any notice of infrigement of
or conflict with asserted rights of others with respect to any product, technology, data, trade secrets,
know-how, proprietary techniques, trademarks, service marks, trade names or copyrights which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a materially
adverse affect on the business, operations, financial conditions or income of NET or any material portion
of its properties, assets or rights.

     Section 1.9     Litigation and Proceedings.
To the best of NET's knowledge and belief, there are no actions, suits,
proceedings or investigations pending or threatened by or against NET or affecting NET or its properties, at law or in equity, before
any court or other governmental agency or instrumentality, domestic or foreign or before any arbitrator of any kind that would have a
material adverse affect on the business, operations, financial condition or income of NET. NET does not have any knowledge of any
default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator
or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the
discovery of such a default.

     Section 1.10     Contracts.
On the Closing Date, except as discloszed in the NET Schedules:

	 	(a)	
There are no material contracts, agreements, franchises, license agreement, or
other commitments to which NET is a party or by which it or any of its properties are bound;
	 	 	 
	 	(b)	
NET is not a party to any contract, agreement, commitment or instrument or
subject tio any charter or other corporate restriction or any judgment, order, writ, injunction,
decree or award which materiallt and adversely affects, or in the future may (as far as NET
can now foresee) materially and adversely affect, the business, operations, properties, assets
or conditions of NET; and
	 	 	 
	 	(c)	
NET is not a party to any material oral written: (i) contract for the employment
of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option
severence pay, pension, benefit or retirement plan, agreement or arrangement covered by
Title IV of the Employee Retirement Income Security Act, as amended; (iii) agreement,
contract or indenture relating to the borrowing of money; (iv) guarnty of any obigation for the
borrowing of maney or otherwise, excluding endorsements made for collection and other
guaranties of obligations, which, in the aggregate exceeds $1,000; (v) consulting or other
similar contract with an unexpired term of more than one year or providing for payments in excess
of $10,000 in the aggregate; (vi) collective bargaining agreement; (vii) there in no
agreement with any present or former officer or director of NET; or (viii) any contract,
agreement, or other commitment involving payments by it for more than $10,000 in the
aggregate.
	 	 	 

     Section 1.11     No Conflict With Other Instruments.
The execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or provision of, or constitute an event of default under,
any material indenture, mortgage, deed of trust or other material contract, agreement or instrument to which NET is a party or to
which any of its properties or operations are subject.

     Section 1.12     Material Contract Defaults.
To the best of NET's knowledge and belief, NET is not in default in any
material respect under the terms of any outstanding contract, agreement, lease or other commitment which is material to the business,
operations, properties, assets or condition of NET, and there is no event of default in any material respect under any such contract,
agreement, lease or other commitment in respect of which NET has not taken adequate steps to prevent such a default from occurring.

     Section 1.13     Governmental Authorizations.
 To the best of NET's knowledge, NET has all licenses, franchises,
permits or other governmental authorizations legally required to enable NET to conduct its business in all material respects as
conducted on the date hereof. Except for compliance with federal and state securities and corporation laws, as hereinafter provided,
no authorization, approval, consent or order of, or registration, declaration or filing with, any court or other governmental body is
required in connection with the execution and delivery by NET of this Agreement and the consummation of NET of the transactions
contemplated hereby.

     Section 1.14     Compliance
With Laws and Regulations>
To the best of NET's knowledge and belief, NET has complied with all applicable statutes and regulations of any federal, state or other
governmental entity or agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business; operations, properties, assets or condition of NET or would not result
in NETS's incurring any material liability.

     Section 1.15     Insurance.
NET currently maintains no insurance on any of its properties.

     Section 1.16     Approval of Agreement
The holders of a majority of NET's voting and outstanding equity securities of NET have authorized the execution and delivery of the
Agreement by NET and have approved the transactions contemplated hereby.

     Section 1.17     Material
Transactions or Affiliations.As of the Closing Date, there will exist no
material contract, agreement or arrangement between NET and any person who was at the time of such
contract, agreement or arrangement an officer, director or person owning or record, or known by NET to
own beneficially, ten percent (10%) or more of hte issued and outstanding securities of NET and which
is to be performed in whole or in part after the date hereof.  NET hsa no commitment, whether written or
oral, to lend any funds to, borrow any money from or enter into any other material transactions with, any
such affiliated person.

     Section 1.18     Labor Relations.
NET has never had a material work stoppage resulting from
labor problems.

     Section 1.19     NET Schedules
UPon execution hereof, NET shall deliver to TSI the following
schedules, which are collectively referred to as the "NET Schedules" which are dated the date of this Agreement,
all certified by an officer of NET to be complete, true and accurate:

	 	(a)	
complete and correct copies of the certificate of incorporation and bylaws of NET as in effect as of the
date of this Agreement
	 	 	 
	 	(b)	
copies of all financial statements of NET identified in Section 1.5(c), except that NET shall deliver
to TSI prior to the Closing Date copies of all such financial statements in form and content acceptable to TSI;
	 	(c)	
the description of any material adverse change in the business, operations,
property, assets, or condition of NET since June 30, 1999 required to be provided pursuant to
Section 1.6; and
	 	 	 
	 	(d)	
any other informatsion, together with any required copies of documents, required to be disclosed in the
NET Schedules by Sections 1.1 through 1.19.
	 	 	 

ARTICLE II

REPRESENTATIONS,
COVENANTS AND WARRANTIES OF TSI

     As an inducement to, and to obtain the reliance
of NET, TSI represents and warrants as follows:

     Section 2.1     Organization. TSI is a limited liability company duly organized, validly existing and in good standing
under the laws of the State of Colorado and has the corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on
its business in all material respects as it is now being conducted, including qualification to do business as a foreign entity in the
states in which the character and location of the assets owned by it or the nature of the business transacted by it requires
qualification. Included in the TSI Schedules (as hereinafter defined) are complete and correct copies of the certificate of
formation, amended certificate of formation of, if any (collectively, hereinafter referred to as the "certificate of formation") and
operating agreement and amendments thereto of TSI as in effect on the date hereof. The execution and delivery of this Agreement does
not and the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not, violate any
provision of TSI's certificate of formation or operating agreement. TSI has taken all action required by law, it certificate of
formation, its operating agreement or otherwise to authorize the execution and delivery of this Agreement. TSI has full power,
authority and legal right and has taken all action required by law, its certificate of formation, operating agreement or otherwise
to consummate the transactions herein contemplated.

     Section 2.2     Capitalization.
The authorized capitalization of TSI consists of 1000 member units ("Member Units").  As of the date hereof there
are 9 Member Units issued and outstanding to the following: Matthew Walsh, Thomas Daley and William Connelly (the "Founders").
As of the Closing Date, as defined herein, (i) there will be no more than nine (9) Member Certificates issued and outstanding
held by the Founders; and (ii) there will be no other Member Units issued and outstanding except for the issuance of Member
Units to NET pursuant to this Agreement.  All issued and outstanding TSI Member Certificates have been
legally issued, fully paid and are nonassessable.

     Section 2.3     Subsidiaries.
TSI has no subsidiary companies.

     Section 2.4     Tax Matters;
Books & Records

	 	(a)	
The books and  records,  financial  and others,  of TSI are in all material  respects  complete and
correct and have been maintained in accordance with good business accounting practices;
	 	 	 
	 	(b)	
TSI has no liabilities with respect to the payment of any federal, state, county, local or other taxes
(including any deficiencies, interest or penalties);
	 	 	 
	 	(c)	
FInancial Statements.   TSI has delivered to NET the following statements:
unaudited financial statements for the period January 1, 1999 through and incuding July 31, 1999,
and unaudited financial statements for the year ended December 31, 1998, including a
balance sheet (inckuding a statement of shareholders' equity) and an income statement.  The
Financial Statements are complete and correct in all material respects and have been prepared
in accordance with generally acceptable accounting principles applied on a consistent basis
throughout the periods indicated and with each other, except that the unaudited Financial
Statements may not contain all footnotes required by generally accepted accounting principles.

     Section 2.5      Information.
The  information  concerning TSI as set forth in this Agreement and in the TSI Schedules is
complete  and  accurate  in all  material  respects  and does not contain any untrue  statement  of a material  fact or omit to state a
material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.

     Section 2.6     Absence
of Certain Changes or Events. Except as described herein or in the TSI Schedules, since
December 31, 1998:

	 	(a)
TSI has not: (i) amended its certificate of formation or operating agreement (the "Operating Agreement"),
except for the Amendment for the Operating Agreement dated as of the date of this Agreement;
(ii) waived any rights of value which in the aggregate are extraordinary or
material considering the business of TSI; (iii) made any material change in its
method of management, operation or accounting; or (iv) made any accrual or
arrangement for or payment of bonuses or special compensation of any kind or any
severance or termination pay to any present or former officer or employee. 

	 	(b)
TSI has not: (i) granted or agreed to grant any options, warrants or other
rights for its certificates, bonds or other corporate securities calling for the
issuance thereof, which option, warrant or other right has not been cancelled as
of the Closing Date; (ii) borrowed or agreed to borrow any funds or incurred or
become subject to, any material obligation or liability (absolute or contingent)
except liabilities incurred in the ordinary course of business; and 

	 	(c)
to the best knowledge of TSI, it has not become subject to any law or regulation
which materially and adversely affects, or in the future may adversely affect,
the business, operations, properties, assets or condition of TSI. 

     Section 2.7     Title
and Related Matters.TSI has good and marketable title to and is the sole and exclusive owner of all
of its properties, inventory, interests in properties and assets, real and personal (collectively, the "Assets") which are reflected
in the most recent TSI audited balance sheet and the TSI Schedules or acquired after that date (except properties, interests in
properties and assets sold or otherwise disposed of since such date in the ordinary course of business), free and clear of all liens,
pledges, changes or encumbrances. Except as set forth in the TSI Schedules, TSI owns free and clear of any liens, claims,
encumbrances, royalty interests or other restrictions or limitations of any nature whatsoever and all procedures, techniques,
marketing plans, business plans, methods of management or other information utilized in connection with TSI's business. Except as
set forth in the TSI Schedules, no third party has any right to, and TSI had not received any notice of infringement of or conflict
with asserted rights of others with respect to any product, technology, data, trade secrets, know-how, proprietary techniques,
trademarks, service marks, trade names or copyrights which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a materially adverse affect on the business, operations, financial conditions or income of TSI or any
material portion of its properties, assets or rights.

     Section 2.8     Litigation and Proceedings. Except for possible litigation involving William Zeitz, there are no
actions, suits or proceedings pending or, to the best of TSI's knowledge and belief, threatened by or against or affecting TSI, at
law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign or before any arbitrator of
any kind that would have a material adverse effect on the business, operations, financial condition, income or business prospects of
TSI. TSI does not have any knowledge of any default on its part with respect to any judgement, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator or governmental agency or instrumentality.

     Section 2.9 Contracts. On the Closing Date:

		(a)	There are no material contracts,
agreements,  franchises, license agreements, or other commitments to which
TSI is a party or by which it or any of its properties are bound;
	 	 	 
		(b)	TSI is not a party to any contract, agreement, commitment or instrument or
subject to any charter or other corporate restriction or any judgment, order,
writ, injunction, decree or award which materially and adversely affects, or in
the future may (as far as TSI can now foresee) materially and adversely affect,
the business, operations, properties, assets or conditions of TSI; and
	 	 	 
		(c)	TSI is not a party to any material oral or written: (i) contract for the
employment of any officer or employee; (ii) profit sharing, bonus, deferred
compensation, stock option, severance pay, pension, benefit or retirement plan,
agreement or arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or indenture relating to the
borrowing of money; (iv) guaranty of any obligation for the borrowing of money
or otherwise, excluding endorsements made for collection and other guaranties of
obligations, which, in the aggregate exceeds $1,000; (v) consulting or other
similar contract with an unexpired term of more than one year or providing for
payments in excess of $10,000 in the aggregate; (vi) collective bargaining
agreement; (vii) Except for the first Amendment to Operating Agreement with
Gerard Magliocca and a Verbal Agreement with Bridgeway Sicor, Inc., there is no
agreement with any present or former officer or director of TSI; or (viii)
contract, agreement, or other commitment involving payments by it for more than
$10,000 in the aggregate. 

     Section 2.10     No Conflict
With Other Instruments.The execution of this Agreement and the  consummation of the transactions
contemplated  by this  Agreement  will not result in the breach of any term or provision of, or  constitute an event of default  under,
any material  indenture,  mortgage,  deed of trust or other  material  contract,  agreement or instrument to which TSI is a party or to
which any of its properties or operations are subject.

     Section 2.11     Material
Contract Defaults.To the best of TSI's  knowledge and belief,  TSI is not in default in any
material respect under the terms of any outstanding contract,  agreement,  lease or other commitment which is material to the business,
operations,  properties,  assets or condition of TSI, and there is no event of default in any material respect under any such contract,
agreement, lease or other commitment in respect of which TSI has not taken adequate steps to prevent such a default from occurring.

     Section 2.12     Governmental
Authorizations.To the best of TSI's knowledge, TSI has all licenses,  franchises permits
and other  governmental  authorizations  that are legally  required to enable it to conduct its  business  operations  in all  material
respects  as  conducted  on the date  hereof.  Except for  compliance  with  federal  and state  securities  or  corporation  laws,  no
authorization,  approval,  consent or order of, or registration,  declaration or filing with, any court or other  governmental  body is
required in connection with the execution and delivery by TSI of the transactions contemplated hereby.

     Section 2.13     Compliance
With Laws and Regulations.To the best of TSI's  knowledge  and  belief,  TSI has  complied
with all applicable  statutes and  regulations of any federal,  state or other  governmental  entity or agency  thereof,  except to the
extent that noncompliance would not materially and adversely affect the business;  operations,  properties,  assets or condition of TSI
or would not result in TSI's incurring any material liability.

     Section 2.14     Insurance.
All of the insurable  properties  of TSI are insured for TSI's  benefit in accordance  with
the  insurance  policies  disclosed  in the TSI  Schedules  under valid and  enforceable  policy or policies  containing  substantially
equivalent coverage will be outstanding and in full force at the Closing Date.

     Section 2.15     Approval
of Agreement.The  holders of a majority  of the  Membership  Interests  of TSI have  authorized
the execution and delivery of the Agreement by TSI and have approved the transactions contemplated hereby.

     Section 2.16     Material
Transactions or Affiliations.As of the Closing Date,  there will exist no material  contract,
agreement  or  arrangement  between  TSI and any person who was at the time of such  contract,  agreement  or  arrangement  an officer,
director or person  owning of record,  or known by TSI to own  beneficially,  ten percent  (10%) or more of the issued and  outstanding
Membership  Interests of TSI and which is to be performed in whole or in part after the date  hereof.  TSI has no  commitment,  whether
written or oral, to lend any funds to, borrow any money from or enter into any other material  transactions  with, any such  affiliated
person.

     Section 2.17     Labor
Relations. TSI has never had a work stoppage resulting from labor problems.

     Section 2.18     TSI
Schedules.Upon  execution  hereof,  TSI  shall  deliver  to NET the  following  schedules,  which are
collectively  referred to as the "TSI Schedules"  which are dated the date of this Agreement,  all certified by an officer of TSI to be
complete, true and accurate:

     (a)
     complete and correct copies of the  certificate of formation and operating  agreement of TSI as in effect as
of the date of this Agreement;

     (b)
     copies of all financial statements of TSI identified in Section 2.4 (a);

     (c)
     the description of any material adverse change in the business, operations,
property, assets, or condition of TSI since November 14, 1997 required to be
provided pursuant to Section 2.5; and 

     (d)
     any other information, together with any required copies of documents, required
to be disclosed in the TSI Schedules by Sections 2.1 through 2.17. 

TSI shall cause the TSI Schedules and the instruments to be delivered to NET hereunder to be updated after the date hereof
up to and including the Closing Date.

ARTICLE III

EXCHANGE
PROCEDURE

     Section 3.1     Share Exchange/
Delivery of TSI Securities. On the Closing Date, and subject to this Article III and Section 3.2 below,
each of the Founders shall: (i) cause TSI to issue to NET three (3) Member Units either through
an amendment tro the Operating Agreement or the issuance of Member UNit certificates; and (ii) transfer from each of the Founders
one (1) Member Unit each (for a total of three (3) Member Units), either through an amendment to the Operating Agreement
or the delivery of certificates for the Member Units, duly endorsed in blank or with executed power attached thereto in
transferable form.  Upon the completion of the transactions referred to in this Article III, NET shall own
fifty percent (50%) of the issued and outstanding Member Units of TSI.

     Section 3.2     
Issuance of NET Common Shares and Payment of Purchase Price. On the Closing Date, in exchange for 50% of the
issued and outstanding TSI Member
Units issued and tendered pursuant to Section 3.1, NET shall pay the sum of $1,050,000 as follows:

(i)     in exchnage
for the three (3) Member Units issued by TSI pursuant to Section 3.1(i), NET shall pay the amount of
$525,000 payable in cash to TSI as follows: (a) $100,000 payable on the execution of this Agreement (such funds
shall be used by TSI’s members to repay the existing debt that was
originally used to finance the initial stages of TSI’s software
development and after payment of such debtr, any remaining amount shall be payable in equal amounts to the Founders);
(b) up to a maximum of $425,000 to be paid during the remainder of
the TradeAnywhereTM software development stage for actual expenses incurred by TSI
in such development (such funds will be paid directly to third party vendors or outside programmers,
on behalf of TSI, for products and/or services used for the TradeAnywhereTM software development
and will not be used to otherwise compensate the Founders, except as provided below).
For purpoases hereof, the TradeAnywhereTM software development shall be deemed to be completed upon
the earlier of the (i) completion of software pursuant to the written requirements for
such software attached as Schedule 3.2; or (ii) the use of such software in actual
production or commercial purposaes by any person or entity (either, the
"Completion of Development").  NET and the FOunders agree to take all
necessary actions to casue TSI to pay, or for NET to pay directly, any amount of
the $425,000 that is not used to pay third parties to be immediately payable in equal
amounts to the Founders upon Completion of Development.

(ii)     in exchnage
for the Founders transferring the total of three (3) Member Units held by them pursuant to Section 3.1(ii),
NET shall issue and deliver 133,000
“restricted as defined in Section 4.2 below) NET common Shares to the Founders and in the
amount listed on Schedule "A" upon COmpletion of Development.  TSI and NET agree for this agreement
that these shares will be valued at $3.9474 per share.

(c)      NET hereby grants the
Founders listed on Schedule “A”, each the option to purchase up to
50,000 additional (restricted, as defined in Section 4.2 below) common shares of NET (maximum of
150,000 common shares in the aggregate) at an exercise price of $2.75 per common
share for a period of 6 months from the date of this Agreement. After such 6
month period, the options shall expire. 

     Section 3.3     
Events Prior to Closing. Upon execution hereof or as soon thereafter as practical, management of TSI and
NET shall execute, acknowledge and deliver (or shall cause to be executed, acknowledged and delivered) any and all certificates,
opinions, financial statements, schedules, agreements, resolutions rulings or other instruments required by this Agreement to be so
delivered, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in
order to effectuate or evidence the transactions contemplated hereby, subject only to the conditions to Closing referenced
hereinbelow.

     Section 3.4     
Closing. The closing ("Closing") of the transactions contemplated by this Agreement shall be
on August 20, 1999 ("Closing Date").

     Section 3.5     Termination.

	 	        (a)
This Agreement may be terminated by the board of directors, or majority interest
of Members of either NET or TSI, respectively, at any time prior to the Closing
date if: 

	 	        (i)
there shall be any action or proceeding before any court or any governmental
body which shall seek to restrain, prohibit or invalidate the transactions
contemplated by this Agreement and which, in the judgement of such board of
directors, made in good faith and based on the advice of its legal counsel,
makes it inadvisable to proceed with the exchange contemplated by this
Agreement; or 

	 	        (ii)
any of the transactions contemplated hereby are disapproved by any regulatory
authority whose approval is required to consummate such transactions. 

     In the event of termination pursuant to this paragraph (a) of this Section 3.5, no obligation, right, or liability shall
arise hereunder and each party shall bear all of the expenses incurred by it in connection with the negotiation, drafting and
execution of this Agreement and the transactions herein contemplated;

	 	        (b)
This Agreement may be terminated at any time prior to the Closing Dated by
action of the board of directors of NET if TSI shall fail to comply in any
material respect with any of its covenants or agreements contained in this
Agreement or if any of the representations or warranties of TSI contained herein
shall be inaccurate in any material respect, which noncompliance or inaccuracy
is not cured after 20 days written notice thereof is given to TSI. If this
Agreement is terminated pursuant to this paragraph (b) of this Section 3.5, this
Agreement shall be of no further force or effect and no obligation, right or
liability shall arise hereunder. 

ARTICLE IV

SPECIAL
COVENANTS

     Section 4.1     
Access to Properties and Records. Prior to closing, TSI and NET will each afford to the officers and
authorized representatives of the other full access to the properties, books and records of TSI and NET, as the case may be, in order
that each may have full opportunity to make such reasonable investigation as it shall desire to make of the affairs of the other and
each will furnish the other with such additional financial and operating data and other information as to the business and properties
of TSI and NET, as the case may be, as the other shall from time to time reasonably request.

     Section 4.2     
Availability of Rule 144. Each of the parties acknowledge that the stock of NET to be issued pursuant to
this Agreement will be "restricted securities, " as that term is defined in Rule 144 promulgated pursuant to the Securities Act. NET
is under no obligation to register such shares under the Securities Act, or otherwise. The stockholders of NET holding restricted
securities of NET as of the date of this Agreement and their respective heirs, administrators, personal representatives, successors
and assigns, are intended third party beneficiaries of the provisions set forth herein. The covenants set forth in this Section 4.2
shall survive the Closing and the consummation of the transactions herein contemplated.

     Section 4.3     
Special Covenants and Representations Regarding the NET Common Shares to be Issued in the Exchange.
The consummation of this Agreement, including the issuance of the NET Common Shares to the Members of TSI as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act, and applicable state statutes. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus delivery requirements of such statutes which depend, inter
alia, upon the circumstances under which the TSI Members acquire such securities.

      Section 4.4     
Third Party Consents. TSI and NET agree to cooperate with each other in order to obtain any required
third party consents to this Agreement and the transactions herein contemplated.

     Section 4.5     
Actions Prior and Subsequent to Closing.

     (a)     
From and after the date of this Agreement until the Closing Date and except as
set forth in the TSI Schedules or as permitted or contemplated by this
Agreement, TSI will each use its best efforts to: 

	 	(i)	
carry on its business in substantially the same manner as it has heretofore;
	 	(ii)	
maintain and keep its properties in states of good repair and condition as at present, except for
depreciation due to ordinary wear and tear and damage due to casualty;
	 	(iii)	
maintain in full force and effect insurance comparable in amount and in scope of coverage to that now
maintained by it;
	 	(iv)	
perform in all material respects all of its obligations under material contracts, leases and instruments
relating to or affecting its assets, properties and business;
	 	(v)	
maintain and preserve its business organization intact, to retain its key employees and to maintain its
relationship with its material suppliers and customers; and
	 	(vi)	
fully comply with and perform in all material respects all obligations and
duties imposed on it by all federal and state laws and all rules, regulations
and orders imposed by federal or state governmental authorities. 

     (b)     From
and after the date of this Agreement until the Closing Date, TSI will not, without the prior consent of NET:

	 	(i)	except as otherwise specifically set forth herein, make any change in its membership certificates,
certificate of formation or operating agreement;
	 	(ii)	
declare or pay any dividend on its outstanding Membership Certificates, except
as may otherwise be required by law, or effect any stock split or otherwise
change its capitalization, except as provided herein; 
	 	(iii)	
enter into or amend any employment, severance or similar agreements or arrangements with any directors or
officers;
	 	(iv)	
grant, confer or award any options, warrants, conversion rights or other rights not existing on the date
hereof to acquire any Membership Shares; or
	 	(v)	
purchase or redeem any Membership Shares.

     (c)     
This transaction shall close on the Closing Date. However, the finalization of
this transaction and filing documents to effectuate this transaction shall
remain in escrow pending the following: 

	 	(i)	(A) TSI delivering to NET the three (3)
Member Units, pursuant to Section 3.1(i); and (B) the Founders transferring the three (3) Member Units held by
them, pursuant to Section 3.1(ii), with the result that at the conclusion of such transactions,
NET shall own fifty percent (50%) of the issued and outstanding Member Units of TSI;

	 	(ii)	Receipt by NET’s legal counsel
of an opinion letter from TSI’s legal
counsel in form and substance as set forth in Section 6.4 hereof.

     Section 4.6     
Indemnification.

	 	        (a)
TSI hereby agrees to indemnify NET and each of the officers, agents and
directors of NET as of the date of execution of this Agreement against any loss,
liability, claim, damage or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing or defending
against and litigation, commenced or threatened or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made in this Agreement. The indemnification
provided for in this paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement; and 

	 	        (b)
NET hereby agrees to indemnify TSI and each of the officers, agents, directors
and current Members of TSI as of the Closing Date against any loss, liability,
claim, damage or expense (including, but not limited to, any and all expense
whatsoever reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened or any claim whatsoever), to which it or
they may become subject arising out of or based on any inaccuracy appearing in
or misrepresentation made in this Agreement and particularly the representation
regarding no liabilities referred to in Section 2.4 (b). The indemnification
provided for in this Section shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement. 

ARTICLE V

CONDITIONS
PRECEDENT TO OBLIGATIONS OF NET

     The obligations of NET under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following
conditions:

     Section 5.1     Accuracy
of Representations. The representations and warranties made by TSI in this Agreement were
true when made and shall be true at the Closing Date with the same force and effect as if such representations and warranties were
made at the Closing Date (except for changes therein permitted by this Agreement), and TSI shall have performed or compiled with all
covenants and conditions required by this Agreement to be performed or complied with by TSI prior to or at the Closing. NET shall be
furnished with a certificate, signed by a duly authorized officer of TSI and dated the Closing Date, to the foregoing effect.

     Section 5.2     
Member Approval. A majority of the Membership Interests of TSI shall have approved this Agreement and the
transactions contemplated herein.

     Section 5.3     
Manager's Certificate. NET shall have been furnished with a certificate dated the Closing Date and
signed by the Manager of TSI to the effect that: (a) the representations and warranties of TSI set forth in the Agreement and in
all Exhibits, Schedules and other documents furnished in connection herewith are in all material respects true and correct as if made
on the Effective Date; (b) TSI has performed all covenants, satisfied all conditions, and complied with all other terms and
provisions of this Agreement to be performed, satisfied or complied with by it as of the Effective Date; (c) since such date and
other than as previously disclosed to NET, TSI has not entered into any material transaction other than transactions which are usual
and in the ordinary course if its business; and (d) no litigation, proceeding,
investigation or inquiry is pending or, to the best knowledge of TSI, threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement or, to the extent not disclosed in the TSI Schedules, by
or against TSI which might result in any material adverse change in any of the assets, properties, business or operations of TSI.

     Section 5.4     
No Material Adverse Change. Prior to the Closing Date, there shall not have occurred any material
adverse change in the financial condition, business or operations of nor shall any event have occurred which, with the lapse of time
or the giving of notice, may cause or create any material adverse change in the financial condition, business or operations or TSI.

     Section 5.5     
Opinion of Counsel to TSI.NET shall receive an opinion dated the Closing date of counsel to TSI, in
substantially the following form:

	 	        (a)
TSI is a limited liability company duly organized, validly existing, and in good
standing under the laws of Colorado and has the corporate power and is duly
authorized, qualified, franchised and licensed under all material applicable
laws, regulations, ordinances and orders of public authorities to own all of its
properties and assets and to conduct its business as now conducted, including
qualification to do business as a foreign corporation in the states in which the
character and location of the assets owned by it or the nature of the business
transacted by it requires qualifications; 

	 	        (b)
To the best knowledge of such legal counsel, the execution and delivery by TSI
of this Agreement and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not conflict with or result
in the breach of any tern or provision of TSI’s certificate of formation or
operating agreement or violate any court order, writ, injunction or decree
applicable to TSI, or its properties or assets; 

	 	        (c)
All issued and outstanding Membership Certificates are legally issued, fully
paid and nonassessable. Except as set forth in the TSI Schedules, to the best
knowledge of such legal counsel, there are no outstanding subscriptions,
options, rights, warrants, convertible securities or other agreements or
commitments obligating TSI to issue any additional Membership Certificates. 

	 	        
(d) This Agreement has been duly and validly authorized, executed and delivered by TSI;

	 	        (e)
To the best knowledge of such legal counsel, except as set forth in the TSI
Schedules, there are no actions, suits or proceedings pending or threatened by
or against or affecting TSI or its properties, at laws or in equity, before any
court or other governmental agency or instrumentality, domestic or foreign or
before any arbitrator of any kind; 

     Section 5.6     
Other Items. NET shall have received such further documents, certificates or instruments relating to
the transactions contemplated hereby as NET may reasonably request.

ARTICLE VI

CONDITIONS
PRECEDENT TO OBLIGATIONS OF TSI

     The obligations of TSI
under this Agreement are subject to the satisfaction, at or before the Closing date (unless otherwise
indicated herein), of the following conditions:

     Section 6.1     
Accuracy of Representations. The representations and warranties made by NET in this Agreement were
true when made and shall be true as of the Closing Date (except for changes therein permitted by this Agreement) with the same force
and effect as if such representations and warranties were made at and as of the Closing Date, and NET shall have performed and
complied with all covenants and conditions required by this Agreement to be performed or complied with by NET prior to or at the
Closing. TSI shall have been furnished with a certificate, signed by a duly authorized executive officer of NET and dated the
Closing Date, to the foregoing effect.

     Section 6.2     
Officer's Certificate. TSI shall be furnished with a certificate dated the Closing date and signed by a
duly authorized officer of NET to the effect that: (a) the representations and warranties of NET set forth in the Agreement and in
all Exhibits, Schedules and other documents furnished in connection herewith are in all material respects true and correct as if made
on the Effective Date; and (b) NET had performed all covenants, satisfied all conditions, and complied with all other terms and
provisions of the Agreement to be performed, satisfied or complied with by it as of the Effective Date.

     Section 6.3     
No Material Adverse Change. Prior to the Closing Date, there shall not have occurred any material
adverse change in the financial condition, business or operations or nor shall ant event have occurred which, with the lapse of
time or the giving of notice, may cause or create any material adverse change in the financial condition, business or operations of
NET.

     Section 6.4     
Opinion of Counsel to NET. TSI shall receive an opinion dated the Closing Date of Richard I. Anslow
& Associates, counsel to NET, in substantially the following form: 

	 	        (a)
NET is a corporation duly organized, validly existing, and in good standing
under the laws of the State of New York and has the corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in the states in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification; 

	 	        (b)
To the best knowledge of such legal counsel, the execution and delivery by NET
of this Agreement and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not conflict with or result
in the breach of any term or provision of TSI’s articles of incorporation
or bylaws or constitute a default or give rise to a right of termination,
cancellation or acceleration under any material mortgage, indenture, deed of
trust, license agreement or other obligation or violate any court order, writ,
injunction or decree applicable to TSI or its properties or assets; 

	 	        (c)
The authorized capitalization of NET consists of 15,000,000 shares of Common
Stock, par value $0.001 per share and 5,000,000 shares of Preferred Stock, par
value $0.001 per share. As of the Closing Date, there will be no more than
8,760,000 common shares issued and outstanding; and no Preferred Shares issued
and outstanding. All issued and outstanding shares are legally issued, fully
paid and nonassessable and issued in violation of the preemptive rights of any
person. 

	 	        (d)
The NET Common Shares to be issued to the TSI Members pursuant to the terms of
this Agreement will be, when issued in accordance with the terms hereof, legally
issued, fully paid and non-assessable; 

	 	        (e)
This Agreement has been duly and validly authorized, executed, and delivered and
constitutes the legal and binding obligation of NET, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally; 

	 	        (f)
To the best knowledge of such counsel, there are no actions, suits or
proceedings pending or threatened by or against NET or affecting NET’s
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign or before any arbitrator of any kind;
and 

     Section 6.5     
Management of TSI. NET and the present members of TSI shall share equally in the management decisions of
TSI. Notwithstanding same, the day to day operations of TSI shall be the responsibility of its current managing members.

ARTICLE VII

MISCELLANEOUS

     Section 7.1     
Brokers and Finders. Each party hereto hereby represents and warrants that it is under no obligation,
express or implied, to pay certain finders in connection with the bringing of the parties together in the negotiation, execution, or
consummation of this Agreement. The parties each agree to indemnify the other against any claim by any third person not listed in
Schedule 7.1 for any commission, brokerage or finder's fee or other payment with respect to this Agreement or the transactions
contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.

     Section 7.2     
Law. Forum and Jurisdiction. This Agreement shall be construed and interpreted in accordance with the
laws of the State of Delaware.

     Section 7.3     
Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if
personally delivered to it or sent by registered mail or certified mail, postage prepaid, or by prepaid telegram addressed as follows:

     If to NET:

     Richard I. Anslow & Associates

     4255 Route 9, Suite D

     Freehold, New Jersey 07728

     If to TSI:

     Matthew Walsh, Manager

     Technology Solutions International, LLC

     600 17th Street

     Suite 2008-S

     Denver, Colorado 80202

     

     With a copy to:

     

     Jeffrey E. Lewis, Esq.

     Gordon & Glickson LLC

     444 N. MIchigan Avenue
     Chicago, Illinois 60611-3903

or such other addresses as
shall be furnished in writing by any party in the manner for giving notices
hereunder, and any such notice or communication shall be deemed to have given as
of the date so delivered, mailed or telegraphed. 

     Section 7.4     
Attorneys' Fees. In the event that any party institutes any action or suit to enforce this Agreement or to
secure relief from any default hereunder or breach hereof, the breaching party or parities shall reimburse the non-breaching party or
parties for all costs, including reasonable attorneys' fee, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.

     Section 7.5     
Confidentiality. Each party hereto agrees with the other parties that, unless and until the reorganization
contemplated by this Agreement has been consummated, they and their representatives will hold in strict confidence all data and
information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, of such other party, and shall not used such data or information or
disclose the same to others, except: (i) to the extent such data is a matter of public knowledge or is required by law to be
published; and (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.

     Section 7.6     
Schedules; Knowledge. Each party is presumed to have full knowledge of all information set forth in
the other party's schedules delivered pursuant to this Agreement.

     Section 7.7     
Third Party Beneficiaries.  This contract is solely among TSI and NET and except as specifically provided,
no director, officer, stockholder, employee, agent, independent contractor or any other person or entity shall be deemed to be a
third party beneficiary of this Agreement.

     Section 7.8     
Entire Agreement.This Agreement represents the entire agreement between the parties relating to the
subject matter hereof. This Agreement alone fully and completely expresses the agreement of the parties relating to the subject
matter hereof. There are no other courses of dealing, understanding, agreements, representations or warranties, written or oral,
except a set forth herein. This Agreement may not be amended or modified, except by a written agreement signed by all parties hereto.

     Section 7.9     
Survival; Termination. The representations, warranties and covenants of the respective parties shall
survive the Closing Date and the consummation of the transactions herein contemplated for 18 months.

     Section 7.10     
Counterparts. This Agreements may be executed in multiple counterparts, each of which shall be deemed
an original and all of which taken together shall be but a single instrument.

     Section 7.11     
Amendment or Waiver. Every right and remedy provided herein shall be cumulative with every other
right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any
party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time prior to the Closing Date, this Agreement may be amended by a writing
signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance hereof may be extended by a writing signed by the party or parties for whose benefit the provision
is intended.

     Section 7.12     
Incorporation of Recitals.  All of the recitals hereof are incorporated by this reference and are made a
part hereof as though set forth at length herein.

     Section 7.13     
Expenses. Each party herein shall bear all of their respective cost s and expenses incurred in
connection with the negotiation of this Agreement and in the consummation of the transactions provided for herein and the preparation
thereof.

     Section 7.14     
Headings; Context. The headings of the sections and paragraphs contained in this Agreement are for
convenience of reference only and do not form a part hereof and in no way modify, interpret or construe the meaning of this Agreement.

     Section 7.15     
Benefit. This Agreement shall be binding upon and shall insure only to the benefit of the parties hereto,
and their permitted assigns hereunder. This Agreement shall not be assigned by any party without the prior written consent of the
other party.

     Section 7.16     
Public Announcements. Except as may be required by law, neither party shall make any public
announcement or filing with respect to the transactions provided for herein without the prior consent of the other party hereto.

     Section 7.17     
Severability. In the event that any particular provision or provisions of this Agreement or the other
agreements contained herein shall for any reason hereafter be determined to be unenforceable, or in violation of any law,
governmental order or regulation, such unenforceability or violation shall not affect the remaining provisions of such agreements,
which shall continue in full force and effect and be binding upon the respective parties hereto.

     Section 7.18     
Failure of Conditions; Termination.  In the event of any of the conditions specified in this Agreement shall
not be fulfilled on or before the Closing Date, either of the parties have the right either to proceed or, upon prompt written notice
to the other, to terminate and rescind this Agreement without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to continue to use its efforts to fulfill the unmet conditions.

     Section 7.19     
No Strict Construction. The language of this Agreement shall be construed as a whole, according to its
fair meaning and intendment, and not strictly for or against wither party hereto, regardless of who drafted or was principally
responsible for drafting the Agreement or terms or conditions hereof.

     Section 7.20     
Execution Knowing and Voluntary. In executing this Agreement, the parties severally acknowledge and
represent that each: (a) has fully and carefully read and considered this Agreement; (b) has been or has had the opportunity to be
fully apprised of its attorneys of the legal effect and meaning of this document and all terms and conditions hereof,; and (c) is
executing this Agreement voluntarily, free from any influence, coercion or duress of any kind.

     Section 7.21     
Additional Representatives

	 	(a)	
By execution hereof, each of the indersigned hereby confirms that the securities
of NET and TSI to be issued or delivered to him or it pursuant to this Agreement (the
"Securities") will be acquired for investment for the undersigned's own account, not as a nominee
or agent, and not with a view to the resale or distribution of any part thereof, and that each of the
undersigned has no present intention of selling, granting any participation in, or otherwise
distributing the same.  By execution hereof, each of the undersigned further represents such
undersigned does not have any contract, undertaking agreement or arrangement with any third
party, with respect to any of the Securities.
	 	 	 
	 	(b)	
Each of the undersigned understands that the Securities are being issued
pursuant to available exemption thereto and have not been registered under the Securities Act,
or under any state securities law.  Each of the undersigned understands that no registration
statements has been filed with the United States, Securities and Exchange COmmission nor with
any other regulatsory authority and that, sa a result, any benefit which might normally accrue to a
holder such as the undersigned by an impartial review of such registration statement by the
Securities and Exchange Commission or the regulatory authority will not be forthcoming.  Each of
the undersigned understands thta he/she/it cannot sell the Securities unless such sale is
registered becomes available.  In this connection each of the undersigned understands that the
Securities are "restricted securities" under the Securities Act and that they may not be
transferred by the undersigned to any person without prior consent of the Company, which
consent of the Company will require an opinion of counsel to the effect that, in the event the
Securities are not registere under the Securities Act, any transfer as may be proposed by the
undersigned must be entitled to an exemption from the registration provisions of the Securities
Act.  TO this end, each of the undersigned acknowledges that a legend to the following effect will
be places upon the certificate representing the Securities and that the Transfer Agent (in the
case of NET Securities) has been advised of such facts:
	 	 	 
	 	 	
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE OFFERED AND SOLD ONLY IF REGISTERED
PURSUANT TO THE PROVISIONS OF THE ACT OR IF AN EXEMPTION FROM
REGISTRATION THEREUNDER IS AVAILABLE, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TOT HE SATISFACTION OF THE COMPANY.
	 	 	 
	 	 	
Each of the undersigned understands that foregoing legend on his/her certificate for
the Securities limits their value, including their value as collateral.
	 	 	 
	 	(c)	
Each of the undersigned represents that he/she/it is experienced in evaluation and
investing in securities of companies in the development stage and acknowledges that he/she/it is
able to fend for itself, can bear the economic risk of this investment and has such knowledge
and experience in financial and business matters that it is capable of evaluating in the Securities.
	 	 	 

     IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective officers,
hereunto duly authorized, and entered into as of the date first above written.

	 	 
	ATTEST:	NORTHPORT EQUITY TRADING, INC.
	 	 
	/s/   Michael Lieber

MICHAEL LIEBER	/s/   Anthony Fusco

ANTHONY FUSCO
	 	 
	 	ACCPETED: AS IT APPLIES TO THE FOUNDERS
	 	/s/   Matthew Walsh

MATTHEW WALSH

EXHIBIT
“A”

LIST OF NEW
SHAREHOLDERS OF NET

	 Name
	 # of Shares

	MATTHEW WALSH	 44,333
	THOMAS DALEY	 44,333
	WILLIAM CONNELLY	 44,333

	TOTAL	 133,000<PAGE>

                                                                   EXHIBIT 4(d)

                       DELTA NATURAL GAS COMPANY, INC.

                                     AND

                              FIFTH THIRD BANK,

                                   TRUSTEE

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

                                  INDENTURE

                        DATED AS OF NOVEMBER 1, 2002

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

                                 $20,000,000

                              ____% DEBENTURES
                            DUE DECEMBER 1, 2022

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

<PAGE>
<PAGE>

                             TABLE OF CONTENTS

ARTICLE   SECTION           HEADING                                        PAGE

1                           DEFINITIONS AND INCORPORATION
                            BY REFERENCE.....................................1

            1.01            Definitions......................................1
            1.02            Incorporation by Reference of
                              Trust Indenture Act............................5

            1.03            Rules of Construction............................6

2                           THE DEBENTURES...................................6

            2.01            Form and Dating..................................6
            2.02            Execution and Authentication.....................6
            2.03            Registrar and Paying Agent.......................7
            2.04            Paying Agent to Hold Money in
                              Trust..........................................7
            2.05            Debentureholder Lists............................7
            2.06            Transfer and Exchange............................8
            2.07            Replacement Debentures...........................8
            2.08            Outstanding Debentures...........................9
            2.09            Treasury Debentures..............................9
            2.10            Temporary Debentures.............................9
            2.11            Cancellation.....................................9
            2.12            Defaulted Interest...............................9
            2.13            Persons Deemed Owners...........................10

3                           REDEMPTION OF DEBENTURES AT
                              CORPORATION'S OPTION..........................10

            3.01            Redemption Right at
                              Corporation's Option..........................10
            3.02            Notices to Trustee..............................10
            3.03            Selection of Debentures to be
                              Redeemed......................................11
            3.04            Notice of Redemption............................11
            3.05            Effect of Notice of Redemption..................12
            3.06            Deposit of Redemption Price.....................12
            3.07            Debentures Redeemed in Part.....................12
            3.08            Corporation's Right to Withdraw
                              Redemption Election...........................12

4                           REDEMPTION OF DEBENTURES AT
                            DEBENTUREHOLDER'S OPTION........................12

            4.01            Redemption Right at
                              Debentureholder's Option......................12

5                           COVENANTS.......................................13

            5.01            Payment of Debentures...........................13

                                     i

<PAGE>
<PAGE>

            5.02            Reporting.......................................13
            5.03            Corporate Existence.............................13
            5.04            Payment of Taxes and Other
                              Claims........................................13
            5.05            Limitation on Certain Funded
                              Indebtedness..................................14
            5.06            Limitations on Dividends and
                              Other Payments on Stock.......................14
            5.07            Limitation on Secured
                              Indebtedness..................................14
            5.08            Compliance Certificate..........................15
            5.09            Default Certificate.............................16

6                           SUCCESSORS......................................16

            6.01            When Corporation May Merge, etc.................16

7                           DEFAULTS AND REMEDIES...........................16

            7.01            Events of Default...............................16
            7.02            Acceleration....................................18
            7.03            Other Remedies..................................18
            7.04            Waiver of Past Defaults.........................18
            7.05            Control by Majority.............................19
            7.06            Limitation on Suits.............................19
            7.07            Rights of Holders to Receive
                              Payment.......................................19
            7.08            Collection Suit by Trustee......................20
            7.09            Trustee May File Proofs of
                              Claim.........................................20
            7.10            Priorities......................................20
            7.11            Undertaking for Costs...........................20
            7.12            Waiver of Stay or Extension
                              Laws..........................................21
            7.13            Restoration of Rights and
                              Remedies......................................21

            7.14            Record Date for Vote of
                              Debentureholders..............................21

8                           TRUSTEE.........................................21

            8.01            Duties of Trustee...............................21
            8.02            Rights of Trustee...............................22
            8.03            Individual Rights of Trustee....................23
            8.04            Trustee's Disclaimer............................23
            8.05            Notice of Defaults..............................23
            8.06            Reports by Trustee to Holders...................23
            8.07            Compensation and Indemnity......................23
            8.08            Replacement of Trustee..........................24
            8.09            Successor Trustee by Merger, etc................25
            8.10            Eligibility; Disqualification...................25
            8.11            Preferential Collection of
                              Claims Against Corporation....................25
            8.12            Appointment of Co-Trustee.......................25

                                     ii

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9                           DISCHARGE OF INDENTURE..........................26

            9.01            Termination of Corporation's
                              Obligations...................................26
            9.02            Application of Trust Money......................27
            9.03            Repayment to Corporation........................27

10                          AMENDMENTS, SUPPLEMENTS AND
                              WAIVERS.......................................28

           10.01            Without Consent of Holders......................28
           10.02            With Consent of Holders.........................28
           10.03            Compliance with Trust Indenture
                              Act...........................................28
           10.04            Revocation and Effect of
                              Consents......................................29
           10.05            Notation on or Exchange of
                              Debentures....................................29
           10.06            Trustee Protected...............................29

11                          MISCELLANEOUS...................................29

           11.01            Trust Indenture Act Controls....................29
           11.02            Notices.........................................29
           11.03            Communication by Holders with
                              Other Holders.................................30

           11.04            Certificate and Opinion as to
                              Conditions Precedent..........................30
           11.05            Statements Required in
                              Certificate or Opinion........................30
           11.06            Rules by Trustee and Agent......................31
           11.07            Legal Holidays..................................31
           11.08            No Recourse Against Others......................31
           11.09            Duplicate Originals.............................31
           11.10            Governing Law...................................31
           11.11            Table of Contents, Headings, etc................31

SIGNATURES..................................................................32

EXHIBIT A -- FORM OF GLOBAL SECURITY.......................................A-1

EXHIBIT B -- FORM OF DEBENTURE.............................................B-1

                                    iii

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                                  INDENTURE
                                  ---------

         THIS INDENTURE dated as of November 1, 2002, between DELTA NATURAL
GAS COMPANY, INC., a Kentucky corporation ("Corporation"), and FIFTH THIRD
BANK, an Ohio banking corporation ("Trustee").

         Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Corporation's ____%
Debentures Due December 1, 2022 ("Debentures"):

           ARTICLE 1 - DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.  DEFINITIONS.

         "AFFILIATE" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the
Corporation.

         "AGENT" means any Registrar, Paying Agent or co-registrar or agent
for service of notices and demands.

         "BANKRUPTCY LAW" means Title 11, U.S. Code, or any similar Federal
or State law for the relief of debtors.

         "BOARD OF DIRECTORS" means the Board of Directors of the
Corporation or any authorized committee of the Board.

         "BOARD RESOLUTION" means a copy of a resolution certified by the
Corporate Secretary of the Corporation to have been duly adopted by the
Board of Directors and to be in full force and effect.

         "CAPITAL STOCK" means any and all shares, interests, participations
or other equivalents (however designated) of corporate stock.

         "COMMON STOCK" means the common stock, par value $1 per share, of
the Corporation as the same exists at the date of this Indenture or as such
stock shall be constituted from time to time.

         "CONSOLIDATED", when used in connection with any accounting terms,
means the Corporation and its Subsidiaries, the financial statements of
which are consolidated in accordance with generally accepted accounting
principles.

         "CONSOLIDATED FUNDED INDEBTEDNESS" means the outstanding Funded
Indebtedness of the Corporation and its Consolidated Subsidiaries (excluding
in all cases Funded Indebtedness owing to the Corporation or Consolidated
Subsidiaries); provided, however, that if the

                                     1

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Corporation owns, directly or indirectly, less than all of the voting stock
of a Consolidated Subsidiary, only that portion of the Funded Indebtedness
of such Consolidated Subsidiary equal to the proportion of its outstanding
voting stock owned (directly or indirectly) by the Corporation shall be
included in determining Consolidated Funded Indebtedness.

         "CONSOLIDATED NET UTILITY FIXED ASSETS" means the aggregate value
of Utility Fixed Assets of the Corporation and its Consolidated Subsidiaries
less accumulated depreciation, determined on a consolidated basis in
accordance with generally accepted accounting principles applied in a manner
consistent with the most recent audited financial statements included in
reports delivered to the Trustee pursuant to Section 5.02 hereof; provided,
however, that if the Corporation owns, directly or indirectly, less than all
of the outstanding voting stock of a Consolidated Subsidiary, only that
portion of the Utility Fixed Assets of such Consolidated Subsidiary equal to
the proportion of its outstanding voting stock owned by the Corporation
shall be included in determining Consolidated Net Utility Fixed Assets.

         "CONSOLIDATED TANGIBLE NET WORTH" means an amount equal to the
stockholders' ownership of the Corporation and its Consolidated Subsidiaries
(including capital stock, capital in excess of par value and retained
earnings, but eliminating any unpaid amounts due for sale of stock) less
intangible assets, all determined on a consolidated basis in accordance with
generally accepted accounting principles applied in a manner consistent with
the most recent audited financial statements included in reports delivered
to the Trustee pursuant to Section 5.02 hereof.

         "CORPORATE TRUST OFFICE" means the office of the Trustee located in
Cincinnati, Ohio, at which at any time its corporate trust business shall be
principally administered, which office at the date of execution of this
Indenture is located at 38 Fountain Square Plaza, Cincinnati, Ohio 45263,
Attention: Corporate Trust Administration.

         "CORPORATION" means the party named as such above until a successor
replaces it pursuant to the applicable provisions of the Indenture and
thereafter means the successor.

         "CURRENT INDEBTEDNESS" of a Person means, as of the date of
determination thereof, all Indebtedness maturing on demand or not more than
one year after the date as of which such determination is made (excluding
any Indebtedness renewable or extendible at the option of the debtor,
absolutely or conditionally, for a period or periods ending more than one
year after the date of such determination, whether or not theretofore
extended or renewed), fixed sinking fund payments (except to the extent that
funds for the payment thereof shall have been deposited with a trustee for
the application thereof) and other prepayments required to be made with
respect to any Indebtedness not more than one year after such date, and all
other items (including taxes accrued as estimated) which in accordance with
generally accepted accounting principles would be included as current
indebtedness.

         "CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

         "DEBENTURE" means the Debentures described above as issued under
this Indenture.

                                     2

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         "DEFAULT" means any event which is, or after notice or passage of
time would be, an Event of Default.

         "DEPOSITORY" means The Depository Trust Company in the City of New
York and any successor to such Person.

         "EVENT OF DEFAULT" shall have the meaning assigned such term in
Section 7.01 hereof.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as from
time to time amended.

         "FUNDED INDEBTEDNESS" means all Indebtedness other than Current
Indebtedness.

         "GLOBAL SECURITY" means a security evidencing all of the Debentures
issued to the Depository or its nominee and registered in the name of the
Depository or its nominee.

         "HOLDER" OR "DEBENTUREHOLDER" means a person in whose name a
Debenture is registered; provided, however, that for purposes of Sections
7.06 and 7.07 hereof, such terms shall also include the Beneficial Owner (as
defined in the Debenture) of any Debenture.

         "INDEBTEDNESS" of a Person means (i) all items of indebtedness or
liability which in accordance with generally accepted accounting principles
would be included in determining total liabilities as shown on the liability
side of a balance sheet as at the date as of which indebtedness is to be
determined, (ii) indebtedness upon which the Person whose indebtedness is
being determined customarily pays interest charges and indebtedness secured
by any mortgage, pledge or lien existing on property owned by such Person,
whether or not the indebtedness secured thereby shall have been assumed but,
if (a) any such indebtedness shall not have been assumed or guaranteed by
such Person, (b) such Person customarily does not pay any interest thereon,
and (c) such mortgage, pledge or lien was created by others upon lands over
which such Person has an easement or right of way, such indebtedness shall
not be deemed to be Indebtedness of such Person except to the extent of the
larger of the fair value or cost to such Person of such property (including
any improvements thereon) covered by such mortgage, pledge or lien, and
(iii) guaranties, endorsements (other than for purposes of collection in the
ordinary course of business) and other contingent obligations in respect of,
or to purchase or otherwise acquire, indebtedness of others.

         "INDENTURE" means this Indenture as amended from time to time.

         "INTEREST PAYMENT DATE" means March 1, June 1, September 1 and
December 1 of each year commencing March 1, 2003 through and including
December 1, 2022.

         "LEGAL HOLIDAY" means a Saturday, a Sunday, or a day on which
banking institutions in Cincinnati, Ohio, are not required to be open.

         "LIEN" means any lien, mortgage, pledge, security interest, charge
or other encumbrance of any kind.

                                     3

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         "OFFICER" means the chief executive officer, principal financial
officer, principal accounting officer or President of the Corporation.

         "OFFICERS' CERTIFICATE" means a certificate signed by two Officers
of the Corporation.

         "OPINION OF COUNSEL" means a written opinion from legal counsel who
may be an employee of or counsel to the Corporation or the Trustee and who
is reasonably acceptable to the Trustee.

         "PAYING AGENT" shall have the meaning assigned such term in Section
2.03 hereof.

         "PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other legal entity.

         "PRINCIPAL" of the Debenture means the principal of the Debenture
plus the premium, if any, on the Debenture.

         "QUALIFIED INSTITUTION" means a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company located in the United
States.

         "RECORD DATE" means February 15, May 15, August 15 and November 15
(as applicable).

         "REDEMPTION DATE" when used with respect to any Debenture to be
redeemed means the date fixed for such redemption pursuant to this
Indenture.

         "REDEMPTION PRICE" when used with respect to any Debenture to be
redeemed means the price at which it is to be redeemed pursuant to this
Indenture and the Debenture.

         "REGISTRAR" shall have the meaning assigned such term in Section
2.03 hereof.

         "SEC" means the Securities and Exchange Commission.

         "SPECIAL RECORD DATE" means the date set by the Corporation for
determination of Debentureholders of record for purposes of paying any
defaulted interest.

         "SUBSIDIARY" means a corporation at least the majority of whose
voting stock is owned (directly or indirectly) by the Corporation.

         "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date shown or, in the case of any
amendment or supplement to this Indenture, as in effect on the date of any
such amendment or supplement.

                                     4

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<PAGE>

         "TRUSTEE" means the party named as such above until a successor
replaces it pursuant to the applicable provisions of the Indenture and
thereafter means the successor.

         "TRUST OFFICER" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.

         "UNITED STATES" means the United States of America.

         "U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a person controlled or supervised
by and acting as an agency or instrumentality of the United States the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case, are not callable or
redeemable at the option of the issuer thereof.

         "UTILITY FIXED ASSETS" means all physical property owned by the
Corporation and any Consolidated Subsidiaries and used or useful to the
Corporation in the business of furnishing or distributing, as a public
utility, gas service, the cost of which is charged and properly chargeable
to plant or plant addition account on the books of the Corporation or such
Consolidated Subsidiary in accordance with sound accounting practices and
generally accepted accounting principles. Utility Fixed Assets need not
consist of a specific or complete accession, addition or improvement or
complete new property, but may include construction work in progress or any
work such as is carried in fixed property accounts in accordance with sound
accounting practices and generally accepted accounting principles, whether
capable of complete description and identification or not.

SECTION 1.02.  INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

         Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.

         The following TIA terms used in this Indenture have the following
meanings:

         "INDENTURE SECURITIES" means the Debentures.

         "INDENTURE SECURITY HOLDER" means a Debentureholder.

         "INDENTURE TO BE QUALIFIED" means this Indenture.

         "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.

         "OBLIGOR" on the indenture securities means the Corporation.

         All other terms used in this Indenture that are defined by the TIA
(or defined by the TIA reference to another statute or defined by a SEC rule
under the TIA) have the meanings assigned to them in each such definition.

                                     5

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SECTION 1.03.  RULES OF CONSTRUCTION.

         Unless the context otherwise requires:

         (1) a term has the meaning assigned to it;

         (2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles;

         (3) "or" is not exclusive;

         (4) words in the singular include the plural, and words in the
plural include the singular;

         (5) provisions apply to successive events and transactions; and

         (6) "Section" shall refer to a Section of this Indenture.

                         ARTICLE 2 - THE DEBENTURES

SECTION 2.01.  FORM AND DATING.

         The form of the Debentures to be originally issued as a Global
Security shall be substantially in the form of Exhibit A, which is part of
this Indenture. The form of the Debentures to be issued in exchange for a
Global Security shall be substantially in the form of Exhibit B, which is
part of this Indenture. The terms of such Exhibits A and B are hereby
incorporated herein by reference. The Debentures may have notations, legends
or endorsements required by law, stock exchange rule or usage. Each
Debenture shall be dated the date of its authentication.

SECTION 2.02.  EXECUTION AND AUTHENTICATION.

         Two Officers shall sign the Debentures for the Corporation by
manual or facsimile signature. The Corporation's seal shall be reproduced on
the Debentures.

         If an Officer whose signature is on a Debenture no longer holds
that Office at the time the Debenture is authenticated, the Debenture shall
nevertheless be valid.

         A Debenture shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that
the Debenture has been authenticated under this Indenture.

         The Trustee shall authenticate Debentures for original issue up to
the aggregate principal amount of $20,000,000 upon a written order of the
Corporation signed by one Officer. The

                                     6

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aggregate principal amount of Debentures outstanding at any time may not
exceed that amount except as provided in Section 2.07 hereof.

         The Trustee may appoint an authenticating agent acceptable to the
Corporation to authenticate Debentures. An authenticating agent may
authenticate Debentures whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to deal
with the Corporation or an Affiliate.

SECTION 2.03.  REGISTRAR AND PAYING AGENT.

         The Corporation shall maintain an office or agency where Debentures
may be presented for registration or transfer or for exchange ("REGISTRAR"),
an office or agency where Debentures may be presented for payment ("PAYING
AGENT") and an office or agency where notices and demands to or upon the
Corporation in respect of the Debentures and this Indenture may be served.
The Registrar shall keep a register of the Debentures and of their transfer
and exchange. The Corporation may appoint one or more co-registrars and one
or more additional paying agents. The Corporation or any Subsidiary may act
as Registrar or Paying Agent. The terms "Registrar" and "Paying Agent"
include, respectively, any co-registrar or additional paying agent.

         The Corporation shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Corporation fails
to maintain a Registrar, Paying Agent or agent for service of notices and
demands or fails to give the foregoing notice, the Trustee shall act as
such.

         The Corporation initially appoints The Fifth Third Bank as
Registrar, Paying Agent and agent for service of notices and demands.

SECTION 2.04.  PAYING AGENT TO HOLD MONEY IN TRUST.

         The Corporation shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Debentureholders or the Trustee all money held by the Paying
Agent for the payment of Principal or interest on the Debentures, and will
notify the Trustee of any Default by the Corporation in making any such
payment. While any such Default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Corporation at any
time may require a Paying Agent to pay all money held by it to the Trustee.
Upon payment over to the Trustee, the Paying Agent shall have no further
liability for the money. If the Corporation (or any Subsidiary) acts as
Paying Agent, it shall segregate and hold as a separate trust fund all money
held by it as Paying Agent.

SECTION 2.05.  DEBENTUREHOLDER LISTS.

         The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Debentureholders. If the Trustee is not the Registrar, the Corporation
shall furnish to the Trustee on or before each Interest Payment Date and at
such other times as the Trustee may request in writing a list of the names
and

                                     7

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addresses of Debentureholders in such form and as of such date as the
Trustee may reasonably require.

SECTION 2.06.  TRANSFER AND EXCHANGE.

         When Debentures are presented to the Registrar or a co-registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Debentures of other denominations, the Registrar shall
register the transfer or make the exchange, provided that every Debenture
presented or surrendered for registration of transfer or exchange shall be
duly endorsed or be accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by the Holder thereof or by his
attorney duly authorized in writing. To permit registrations of transfer and
exchanges, the Trustee shall authenticate Debentures at the Registrar's
written request (which written request may be waived by the Trustee so long
as the Trustee and Registrar are one and the same). No service charge shall
be made for any registration of transfer or exchange of Debentures to the
Debentureholders, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto, other than exchanges pursuant to Section 2.10 or 3.07
hereof.

         A Global Security shall be exchangeable pursuant to this Section
for Debentures registered in the names of Persons other than the Depository
or its nominee only as provided in this paragraph. A Global Security shall
be exchangeable pursuant to this Section if (i) such Depository notifies the
Corporation that it is unwilling or unable to continue as Depository for
such Debentures or at any time ceases to be a clearing agency registered as
such under the Exchange Act, (ii) the Corporation executes and delivers to
the Trustee an Officers' Certificate providing that such Global Security
shall be so exchangeable, or (iii) there shall have occurred and be
continuing an Event of Default. Debentures so issued in exchange for a
Global Security shall be of like tenor, in authorized denominations of
$1,000 or integral multiples thereof and in the aggregate having the same
principal amount as the Global Security to be exchanged, and shall be
registered in such names as the Depository shall direct.

         Notwithstanding any other provision of this Section, a Global
Security may not be transferred except as a whole by the Depository to a
nominee of such Depository or by a nominee of such Depository to such
Depository or another nominee of such Depository.

SECTION 2.07.  REPLACEMENT DEBENTURES.

         If the Holder of a Debenture claims that the Debenture has been
lost, destroyed or wrongfully taken, the Corporation shall issue and the
Trustee shall authenticate a replacement Debenture if the Trustee's
requirements are met. If required by the Trustee or the Corporation, an
indemnity bond must be obtained and be sufficient in the judgment of both to
protect the Corporation, the Trustee, any Agent or any authenticating agent
from any loss which any of them may suffer if a Debenture is replaced. The
Corporation and the Trustee may charge for their expenses in replacing a
Debenture.

         Every replacement Debenture is an additional obligation of the
Corporation.

                                     8

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SECTION 2.08.  OUTSTANDING DEBENTURES.

         The Debentures outstanding at any time are all the Debentures
authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, and those described in this Section as not
outstanding.

         If a Debenture is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to
it that the replaced Debenture is held by a bona fide purchaser.

         If Debentures are considered paid under Section 5.01 hereof, they
cease to be outstanding and interest on them ceases to accrue.

         Except for the limitations set forth in Section 2.09 hereof, a
Debenture does not cease to be outstanding because the Corporation or an
Affiliate holds the Debenture.

SECTION 2.09.  TREASURY DEBENTURES.

         In determining whether the Holders of the required principal amount
of Debentures have concurred in any direction, waiver or consent, Debentures
owned by the Corporation or an Affiliate shall be disregarded, except for
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent. Only Debentures which the Trustee
knows are so owned shall be disregarded.

SECTION 2.10.  TEMPORARY DEBENTURES.

         Until definitive Debentures are ready for delivery, the Corporation
may prepare and the Trustee shall authenticate temporary Debentures.
Temporary Debentures shall be substantially in the form of definitive
Debentures but may have variations that the Corporation considers
appropriate for temporary Debentures. Without unreasonable delay, the
Corporation shall cause to be issued and the Trustee shall authenticate
definitive Debentures in exchange for temporary Debentures.

SECTION 2.11.  CANCELLATION.

         The Corporation at any time may deliver Debentures to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Debentures surrendered to them for registration of transfer,
exchange or payment. The Trustee shall cancel all Debentures surrendered for
registration of transfer, exchange or payment and shall dispose of canceled
Debentures as the Corporation directs. The Corporation may not issue new
Debentures to replace Debentures that it has paid for or delivered to the
Trustee for cancellation.

SECTION 2.12.  DEFAULTED INTEREST.

         If the Corporation defaults in a payment of interest on the
Debentures, it shall pay the defaulted interest in any lawful manner. It may
pay the defaulted interest, plus any interest

                                     9

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payable on the defaulted interest, to the Persons who are Debentureholders
on a subsequent Special Record Date. The Corporation shall fix the Special
Record Date and payment date in a manner satisfactory to the Trustee. At
least fifteen (15) days before the Special Record Date, the Corporation
shall mail to Debentureholders a notice that states the Special Record Date,
the payment date and the amount of interest to be paid.

SECTION 2.13.  PERSONS DEEMED OWNERS.

         Prior to due presentment of a Debenture for registration of
transfer, the Corporation, the Trustee and any Agent of the Corporation or
the Trustee may treat the Person in whose name such Debenture is registered
as the owner of such Debenture for the purpose of receiving payment of
Principal of (and premium, if any) and (subject to Section 2.12 hereof)
interest, if any, on such Debenture and for all other purposes whatsoever,
whether or not such Debenture be overdue, and neither the Corporation, the
Trustee nor any Agent of the Corporation or the Trustee shall be affected by
notice to the contrary. All such payments so made to any such Person, or
upon such Person's order, shall be valid, and, to the extent of the sums so
paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Debenture.

         Except to the extent provided in Sections 7.06 and 7.07 hereof, no
holder of any beneficial interest in any Global Security held on its behalf
by a Depository shall have any rights under this Indenture with respect to
such Global Security, and such Depository may be treated by the Corporation,
the Trustee, and any Agent of the Corporation or the Trustee as the owner of
such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall impair, as between a Depository and such
holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depository as Holder of any
Debenture.

                   ARTICLE 3 - REDEMPTION OF DEBENTURES AT
                            CORPORATION'S OPTION

SECTION 3.01.  REDEMPTION RIGHT AT CORPORATION'S OPTION.

         The Corporation has the right to redeem the Debentures at its sole
option, in whole or in part, at any time and from time to time on or after
December 1, 2006, at the Redemption Prices specified in paragraph 5 of the
forms of Debenture attached hereto as Exhibits A and B, subject to the terms
and conditions set forth in this Article 3. The election of the Corporation
to redeem any Debenture shall be evidenced by a Board Resolution.

SECTION 3.02.  NOTICES TO TRUSTEE.

         If the Corporation wishes to redeem Debentures pursuant to
paragraph 5 of the Debenture, it shall notify the Trustee in writing of the
Redemption Date and the principal amount of Debentures to be redeemed. The
Corporation shall give the notice provided for in this Section

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not less than sixty (60) days prior to the Redemption Date or such shorter
time as may be satisfactory to the Trustee.

SECTION 3.03.  SELECTION OF DEBENTURES TO BE REDEEMED.

         If less than all the Debentures are to be redeemed, the Trustee
shall select the Debentures to be redeemed by lot. The Trustee shall, not
less than forty-five (45) days before the Redemption Date or such shorter
time as may be mutually satisfactory to the Trustee and the Corporation,
inform the Corporation in writing of those specific Debentures selected for
redemption. The Trustee may select for redemption portions of the principal
of Debentures that have denominations larger than $1,000. Debentures and
portions of Debentures that the Trustee selects shall be in amounts of
$1,000 or integral multiples of $1,000. Provisions of this Indenture that
apply to Debentures called for redemption also apply to portions of
Debentures called for redemption.

SECTION 3.04.  NOTICE OF REDEMPTION.

         At least 30 days before a Redemption Date, the Corporation shall
mail notice of redemption to each Holder whose Debentures are to be
redeemed. A copy of each such notice shall be mailed to the Trustee.

         The notice shall state:

         (1) the Redemption Date;

         (2) the Redemption Price;

         (3) the name and address of the Paying Agent;

         (4) that Debentures called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;

         (5) that interest on Debentures called for redemption ceases to
accrue on and after the Redemption Date (unless the Corporation shall
default in the payment of the Redemption Price); and

         (6) if less than all of the Debentures outstanding are to be
redeemed, the identification (and, in the case of partial redemption, the
respective principal amounts) of the Debentures to be redeemed.

         At the Corporation's written request, the Trustee shall give notice
of redemption in the Corporation's name and at the expense of the
Corporation.

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SECTION 3.05.  EFFECT OF NOTICE OF REDEMPTION.

         Once notice of redemption is mailed as provided in Section 3.04
hereof, Debentures called for redemption become due and payable on the
Redemption Date at the Redemption Price, subject, however to the provisions
of Section 3.08 hereof.

SECTION 3.06.  DEPOSIT OF REDEMPTION PRICE.

         On or before the Redemption Date, the Corporation shall deposit
with the Paying Agent cash sufficient to pay the Redemption Price and
accrued interest on all Debentures to be redeemed.

SECTION 3.07.  DEBENTURES REDEEMED IN PART.

         Upon surrender of a Debenture that is redeemed in part, the Trustee
shall authenticate for the Holder a new Debenture equal in principal amount
to the unredeemed portion of the Debenture surrendered.

SECTION 3.08.  CORPORATION'S RIGHT TO WITHDRAW REDEMPTION ELECTION.

         Notwithstanding any other provision of this Article 3, the
Corporation shall have the right, at its option, to withdraw, in whole or in
part, its election and notice of redemption pursuant to this Article 3 by
written notice of such withdrawal given by the Corporation to the Trustee
and to each Holder affected thereby at least five (5) days prior to the
Redemption Date. At the Corporation's request, the Trustee shall give such
notice of withdrawal to such Holders in the Corporation's name and at the
expense of the Corporation. Upon the giving of such notice of withdrawal,
the Corporation's redemption election and all notices given pursuant thereto
shall be deemed rescinded to the extent set forth in such notice of
withdrawal and all parties affected thereby shall be restored to their
respective former positions hereunder as if no redemption election had been
made by the Corporation and no such redemption notices had been given.

ARTICLE 4 - REDEMPTION OF DEBENTURES AT DEBENTUREHOLDER'S OPTION

SECTION 4.01.  REDEMPTION RIGHT AT DEBENTUREHOLDER'S OPTION.

         Representatives of deceased Debentureholders and, as long as the
Global Security remains outstanding, representatives of deceased beneficial
owners of such Global Security, have certain optional redemption rights all
as set forth in paragraph 6 of the forms of Debenture attached hereto as
Exhibits A and B.

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                            ARTICLE 5 - COVENANTS

SECTION 5.01.  PAYMENT OF DEBENTURES.

         The Corporation shall pay the Principal of and interest on the
Debentures on the dates and in the manner provided in the Debentures.
Principal and interest shall be considered paid on the date due if the
Trustee or any Paying Agent holds on that date money sufficient to pay all
Principal and interest then due, provided that, if Debentures are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made.

         The Corporation shall pay interest on overdue Principal at the rate
borne by the Debentures; it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.

SECTION 5.02.  REPORTING.

         The Corporation shall file with the Trustee within fifteen (15)
days after it files them with the SEC copies of the annual reports and of
the information, documents, and other reports (or copies of such portions of
any of the foregoing as the SEC may by rules and regulations prescribe)
which the Corporation is required to file with the SEC pursuant to Section
13 or 15(d) of the Exchange Act. The Corporation also shall comply with the
other provisions of TIA Section 314(a).

SECTION 5.03.  CORPORATE EXISTENCE.

         Subject to Article 6 hereof, the Corporation will do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the rights (contractual and statutory) of the
Corporation; provided, however, that the Corporation shall not be required
to preserve any such right if the Board of Directors shall determine that
the preservation thereof is no longer desirable in the conduct of the
business of the Corporation taken as a whole and that the loss thereof is
not, and will not be, adverse in any material respect to the Holders.

SECTION 5.04.  PAYMENT OF TAXES AND OTHER CLAIMS.

         The Corporation will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges levied or imposed upon it or any
Subsidiary or upon the income, profits or property of the Corporation or any
Subsidiary and (ii) all material lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of
the Corporation or any of its Subsidiaries; provided, however, that the
Corporation shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.

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SECTION 5.05.  LIMITATION ON CERTAIN FUNDED INDEBTEDNESS.

         Neither the Corporation nor a Subsidiary will create, issue, incur,
guarantee or assume any Funded Indebtedness which ranks prior to or on a
parity with the Debentures in right of payment unless immediately
thereafter, and after giving effect thereto and to the application of the
proceeds thereof, Consolidated Net Utility Fixed Assets shall be at least
equal to Consolidated Funded Indebtedness.

SECTION 5.06.  LIMITATIONS ON DIVIDENDS AND OTHER PAYMENTS ON STOCK.

         The Corporation will not declare or pay any dividends or make any
distributions upon any Common Stock (other than dividends and distributions
payable only in shares of Common Stock) and will not directly or indirectly
apply any of the assets of the Corporation to the redemption, retirement,
purchase or other acquisition of any stock of the Corporation of any class,
except purchases or redemptions in compliance with any mandatory sinking
fund or purchase fund or redemption requirement in respect of any preferred
stock of the Corporation, whether now or hereafter authorized or issued,
unless after giving effect to such declaration, payment, distribution or
application of assets the Consolidated Tangible Net Worth of the Corporation
shall be at least equal to $25,800,000 as reflected on the Corporation's
latest available balance sheet, which in no event shall be as of a date more
than three months prior to the date of declaration of a dividend or
application of assets.

SECTION 5.07.  LIMITATION ON SECURED INDEBTEDNESS.

         Neither the Corporation nor a Subsidiary will issue, assume or
guarantee any Indebtedness secured by a Lien on any property or asset at any
time owned by it, without effectively securing, prior to or concurrently
with the issuance, assumption or guarantee of any such Indebtedness, the
Debentures equally and ratably with (or, at the Corporation's option, in a
prior position to) such Indebtedness. The foregoing described restriction
does not apply to or prevent the creation of:

                  (1) existing Liens on property or Indebtedness of a
Person which is merged with or into or consolidated with the Corporation or
a Subsidiary provided that the Liens do not apply to any property
theretofore owned by the Corporation;

                  (2) any Lien existing on the effective date of this
Indenture, and, if the Corporation purchases in fee real property and
acquires or constructs improvements thereon to be used by the Corporation as
office space, a Lien on such real property and improvements to secure
Indebtedness incurred for the purchase of such real property and
improvements, so long as such Lien is limited to such real property and
improvements and such Indebtedness does not exceed 75% of the purchase price
thereof;

                  (3) Liens on moneys or U.S. Government Obligations
deposited with the Trustee pursuant to the provisions of this Indenture
summarized under Article 9 hereof:

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                  (4) Liens (which term for purposes of this Subsection
5.07 (4) shall include conditional sale agreements or other title retention
agreements and leases in the nature of title retention agreements) upon
motor vehicles or office equipment acquired by the Corporation or a
Subsidiary after the effective date of this Indenture, under credit terms
customarily extended to purchasers by the manufacturers or other sellers,
provided that no such Lien shall extend to or cover any property of the
Corporation or any Subsidiary, as the case may be, other than the property
then being acquired;

                  (5) Liens for the sole purpose of extending, renewing
or replacing, in whole or in part, Liens securing Indebtedness of the type
referred to in the foregoing Subsections 5.07 (1) through (4) above,
provided, however, that the principal amount of the Indebtedness so secured
at the time of such extension, renewal or replacement shall not be increased
and that such extension, renewal or replacement shall be limited to all or
part of the property or Indebtedness which secured the Lien so extended,
renewed or replaced (plus improvements on such property);

                  (6) Liens for taxes or assessments or other governmental
charges or levies not yet due and payable;

                  (7) Materialmen's, mechanics', workmen's, repairmen's
or other like Liens arising in the ordinary course of business so long as
the obligations giving rise to such Liens are satisfied in a timely manner;

                  (8) Liens created by or existing from any litigation
or legal proceeding which is currently being contested in good faith by
appropriate proceedings, and as to which execution is effectively stayed; or

                  (9) Liens to secure Indebtedness having an outstanding
principal balance aggregating not more than $5,000,000 exclusive of
Indebtedness described in the foregoing Subsections 5.07 (1) through (8)
above.

         The Corporation further covenants that it will not incur any such
Lien unless the instruments and collateral documents equally and ratably
securing the Debentures are approved by the Trustee, and in the opinion of
independent counsel selected by the Trustee, the transaction creating such
Lien complies with the requirements of this Section.

SECTION 5.08.  COMPLIANCE CERTIFICATE.

         The Corporation shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Corporation an Officers' Certificate as
to the Corporation's compliance with all conditions and covenants under this
Indenture, and further stating whether or not the signers know of any
Default that occurred during the fiscal year. If the signers know of any
such Default, the Officers' Certificate shall describe the Default and its
status, and the Corporation's compliance shall be determined without regard
to any grace period or notice requirements under this Indenture. The
Officer's Certificate need not comply with Section 11.05 hereof.

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SECTION 5.09.  DEFAULT CERTIFICATE.

         The Corporation shall deliver to the Trustee, within seven (7) days
of obtaining knowledge of the existence of a Default hereunder, or within
seven (7) days of any Event of Default as described in Section 7.01(4)
hereof, a certificate signed by one of its Officers, setting forth the
nature of the Default and the steps taken, if any, to cure such Default.

                           ARTICLE 6 - SUCCESSORS

SECTION 6.01.  WHEN CORPORATION MAY MERGE, ETC.

         The Corporation shall not consolidate or merge into, or transfer or
lease all or substantially all of its assets to, any Person unless:

         (1) the Person is a corporation or limited liability company
organized and existing under the Laws of the United States, or any State
thereof or the District of Columbia;

         (2) the Person (if the surviving entity in the case of a merger or
the lessee or acquiror of assets) assumes by supplemental indenture all the
obligations of the Corporation under the Debentures and this Indenture;

         (3) immediately after the transaction no Default exists; and

         (4) the Corporation has delivered to the Trustee an Officers'
Certificate and Opinion of Counsel each stating that the transaction and
supplemental indenture comply with this Article.

         The surviving transferee or lessee corporation shall be the
successor Corporation and deemed to and be substituted for the Corporation
under the Indenture, and the predecessor Corporation in the case of a
transfer or lease shall be released from all obligations and covenants under
the Indenture and the Debentures.

                      ARTICLE 7 - DEFAULTS AND REMEDIES

SECTION 7.01.  EVENTS OF DEFAULT.

         An "EVENT OF DEFAULT" occurs if:

         (1) the Corporation defaults in the payment of interest on any
Debenture when the same becomes due and payable and the Default continues
for a period of thirty (30) days;

         (2) the Corporation defaults in the payment of the Principal of any
Debenture when the same becomes due and payable at maturity, upon redemption
or otherwise;

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         (3) the Corporation fails to comply with any of its other
agreements in the Debentures or this Indenture and the Default continues for
the period and after the notice specified below;

         (4) an event of default as defined in any mortgage, indenture or
instrument under which (i) there may be issued, or by which there may be
secured or evidenced, any Indebtedness for money borrowed for which the
Corporation or any Consolidated Subsidiary is responsible or liable as
obligor, guarantor or otherwise or obligations of the Corporation or (ii)
any Consolidated Subsidiary is a lessee under leases required to be
capitalized under generally accepted accounting principles, in an aggregate
principal amount of $100,000 or more, whether such Indebtedness or
obligation now exists or shall hereafter be created, shall happen and shall
result in such Indebtedness or obligation becoming or being declared due and
payable prior to the date on which it would otherwise become due and
payable, and such acceleration shall not be rescinded or annulled, or such
Indebtedness or obligation shall not have been discharged, within a period
of ten (10) days after written notice has been given to the Corporation by
the Trustee or to the Corporation and the Trustee by the Holders of at least
twenty-five percent (25%) in principal amount of the Debentures then
outstanding, specifying such event of default and requiring the Corporation
to cause such acceleration to be rescinded or annulled or to cause such
Indebtedness or obligation to be discharged and stating that such notice is
a "Notice of Default" hereunder;

         (5) the Corporation pursuant to or within the meaning of any
Bankruptcy Law:

             (A) commences a voluntary case;

             (B) consents to the entry of an order for relief against it in
an involuntary case;

             (C) consents to the appointment of a Custodian of it or for all
or substantially all of its property; or

             (D) makes a general assignment for the benefit of its
creditors; or

         (6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law, and the order or decree remains unstayed and in
effect for 60 days, that:

             (A) is for relief against the Corporation in an involuntary case;

             (B) appoints a Custodian of the Corporation for all or
substantially all of its property; or

             (C) orders the liquidation of the Corporation.

         A Default under Section 7.01(3) above is not an Event of Default
until (i) the Trustee or the Holders of at least twenty-five percent (25%)
in principal amount of the Debentures then outstanding notify the
Corporation of the Default, or (ii) the Corporation provides notice to the
Trustee pursuant to the provisions of Section 5.08 hereof, and the
Corporation does not cure the Default within sixty (60) days after receipt
of such respective notice. The notice must specify the

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Default, demand that it be remedied and state that the notice is a "Notice
of Default." The Trustee shall, if requested to do so by the Holders of
twenty-five percent (25%) in principal amount of the Debentures, notify the
Corporation of the Default pursuant to this Section.

         Subject to the provisions of Sections 8.01 and 8.02 hereof, the
Trustee shall not be charged with knowledge of any Event of Default unless
written notice thereof shall have been given to a Trust Officer of the
Trustee at the Corporate Trust Office by the Corporation, the Paying Agent,
the Holder of a Debenture or an agent of such Holder or, in the case of an
Event of Default under Section 7.01(4) above, by the trustee acting under
any mortgage, indenture or other instrument under which the event of default
shall have occurred or by the holder or the agent of any holder of such
Indebtedness.

SECTION 7.02.  ACCELERATION.

         If an Event of Default occurs and is continuing, the Trustee, by
notice to the Corporation, or the Holders of at least twenty-five percent
(25%) in principal amount of the Debentures then outstanding, by notice to
the Corporation and the Trustee, may declare the Principal of, and accrued
interest on, all the Debentures to be due and payable. Upon such declaration
the Principal and interest shall be due and payable immediately.

         The Holders of a majority in principal amount of the Debentures
then outstanding, by notice to the Trustee, may rescind an acceleration of
all the Debentures and its consequences if (i) all existing Events of
Default have been cured or waived except nonpayment of the principal and
interest that has become due solely because of the acceleration and (ii) if
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction. No such rescission shall affect any subsequent
default or impair any right consequent thereon.

SECTION 7.03.  OTHER REMEDIES.

         If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of Principal or interest
on the Debentures or to enforce the performance of any provision of the
Debentures or this Indenture.

         The Trustee may maintain a proceeding even if it does not possess
any of the Debentures or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Debentureholder in exercising any
right or remedy accruing upon an Event of Default shall not impair the right
or remedy or constitute a waiver of or acquiescence in such Event of
Default. All remedies are cumulative to the extent permitted by law.

SECTION 7.04.  WAIVER OF PAST DEFAULTS.

         The Holders of a majority in principal amount of the Debentures, by
notice to the Trustee, on behalf of all Debentureholders, may waive a past
Default and its consequences, except a Default in the payment of the
Principal of or interest on any Debenture other than in connection with an
acceleration of all the Debentures, an uncured failure to make any
redemption payment

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or an uncured Default with respect to a provision which cannot be modified
under the terms of this Indenture without the consent of each Holder
affected.

SECTION 7.05.  CONTROL BY MAJORITY.

         The Holders of a majority in principal amount of the Debentures
then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, is unduly prejudicial
to the rights of other Debentureholders, or would involve the Trustee in
personal liability; provided, that the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.
However, the Trustee is under no duty or obligation to exercise its
discretion in determining whether such directions may conflict with law or
this Indenture, or are unduly prejudicial to the rights of Debentureholders.

SECTION 7.06.  LIMITATION ON SUITS.

         A Debentureholder may pursue a remedy with respect to this
Indenture or the Debentures only if:

         (1) the Holder gives to the Trustee written notice of a continuing
Event of Default;

         (2) the Holders of at least twenty-five percent (25%) in principal
amount of the Debentures then outstanding make a written request to the
Trustee to pursue the remedy;

         (3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;

         (4) the Trustee does not comply with the request by
Debentureholders pursuant to Section 7.06(2) above, within sixty (60) days
after receipt of the request and the offer of indemnity; and

         (5) during such sixty (60)-day period the Holders of a majority in
principal amount of the Debentures then outstanding do not give the Trustee
a direction inconsistent with the request.

         A Debentureholder may not use this Indenture to prejudice the
rights of another Debentureholder or to obtain a preference or priority over
another Debentureholder.

SECTION 7.07.  RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

         Notwithstanding any other provision of this Indenture, the right of
any Holder of a Debenture to receive payment of Principal and interest on
the Debenture, on or after the respective due dates expressed in the
Debenture, or to bring suit for the enforcement of any such payment on or
after such respective dates, is absolute and unconditional and shall not be
impaired or affected without the consent of the Holder.

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SECTION 7.08.  COLLECTION SUIT BY TRUSTEE.

         If an Event of Default in payment of interest or Principal
specified in Section 7.01(1) or (2) hereof occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express
trust against the Corporation for the whole amount of unpaid Principal and
accrued interest remaining unpaid.

SECTION 7.09.  TRUSTEE MAY FILE PROOFS OF CLAIM.

         The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Debentureholders allowed in any judicial proceedings relative to the
Corporation upon the Debentures, its creditors or its property, and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and
any Custodian in any such judicial proceeding is hereby authorized by each
Debentureholder to make such payments to the Trustee, and in the event that
the Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses and disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 8.07 hereof.

SECTION 7.10.  PRIORITIES.

         If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:

         First: to the Trustee for amounts due under Section 8.07 hereof;

         Second: to Debentureholders for amounts due and unpaid on the
Debentures for Principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Debentures for Principal and interest, respectively; and

         Third: to the Corporation.

         The Trustee may fix a record date and payment date for any payment
to Debentureholders pursuant to this Article.

SECTION 7.11.  UNDERTAKING FOR COSTS.

         Subject to the provisions of Section 8.02 hereof, in any suit for
the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant in the

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suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 7.07 hereof or a suit by Holders of more than ten
percent (10%) in principal amount of the Debentures.

SECTION 7.12.  WAIVER OF STAY OR EXTENSION LAWS.

         The Corporation covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of the Indenture; and the
Corporation (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and execution of any power
herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

SECTION 7.13.  RESTORATION OF RIGHTS AND REMEDIES.

         If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under the Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case the
Corporation, the Trustee and the Holders shall, subject to any determination
in such proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been
instituted.

SECTION 7.14.  RECORD DATE FOR VOTE OF DEBENTUREHOLDERS.

         The Corporation may set a record date for purposes of determining
the identity of Debentureholders entitled to vote or consent to any action
by vote or consent authorized or permitted by Sections 7.02, 7.04 and 7.05
hereof. Such record date shall be the later of thirty (30) days prior to the
first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee pursuant to Section 2.05 hereof prior to
such solicitation.

                             ARTICLE 8 - TRUSTEE

SECTION 8.01.  DUTIES OF TRUSTEE.

         (a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.

         (b) Except during the continuance of an Event of Default:

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             (1) The Trustee need perform only those duties that
are specifically set forth in this Indenture and no others.

             (2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.

         (c) The Trustee may not be relieved from liability for its own
negligent action, its own gross negligent failure to act or its own willful
misconduct, except that:

             (1) This paragraph does not limit the effect of paragraph (b)
of this Section.

             (2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and

             (3) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 7.05 hereof.

         (d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section 8.01.

         (e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any
loss, liability or expense.

         (f) The Trustee shall not be liable for interest on any money
received by it except as otherwise agreed with the Corporation. Money held
in trust by the Trustee need not be segregated from other funds except to
the extent required by law.

SECTION 8.02.  RIGHTS OF TRUSTEE.

         Except as otherwise provided in Section 8.01 hereof:

         (a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.

         (b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.

         (c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.

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         (d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.

SECTION 8.03.  INDIVIDUAL RIGHTS OF TRUSTEE.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Debentures and may otherwise deal with the Corporation
or an Affiliate with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. However, the Trustee is subject
to the requirements set forth in Sections 8.10 and 8.11 hereof.

SECTION 8.04.  TRUSTEE'S DISCLAIMER.

         The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Debentures, it shall not be accountable for the
Corporation's use of the proceeds from the Debentures, and it shall not be
responsible for any statement in the Debentures other than its
authentication.

SECTION 8.05.  NOTICE OF DEFAULTS.

         If a Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to Debentureholders, in the manner and to
the extent provided in TIA Section 313(c), a notice of the Default within
ninety (90) days after it occurs. Except in the case of a Default in payment
of the Principal of or interest on any Debenture, the Trustee may withhold
the notice if and so long as the Trustee's Board of Directors (or its
Executive Committee) or a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of
Debentureholders.

SECTION 8.06.  REPORTS BY TRUSTEE TO HOLDERS.

         On or before each June 15 beginning with the June 15 following the
date of this Indenture, the Trustee shall mail to each Debentureholder a
brief report, dated as of such reporting date, with respect to any of the
events listed in TIA Section 313(a) which may have occurred within the
previous twelve (12) months, but if no such event has occurred within such
period no such report need be mailed. The Trustee also shall comply with TIA
Section 313(b)(2).

         A copy of each report required in this Section shall be mailed to
such Debentureholders as required by TIA Section 313(c) and shall, at the
time of its mailing to such Debentureholders, be filed with the Corporation,
the SEC and each stock exchange on which the Debentures are listed. The
Corporation shall notify the Trustee when the Debentures are listed on any
stock exchange.

SECTION 8.07.  COMPENSATION AND INDEMNITY.

         The Corporation shall pay to the Trustee from time to time
reasonable compensation for its services. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust.
If an Event of Default should occur, the Trustee shall be entitled to

                                    23

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<PAGE>

reasonable additional compensation for all additional or extraordinary
services rendered and expenses (including reasonable counsel fees) incurred
in connection with said Event of Default.

         The Corporation shall indemnify the Trustee against any loss or
liability incurred by it. The Trustee shall notify the Corporation promptly
of any claim for which it may seek indemnity. The Corporation shall defend
the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel, and the Corporation shall pay the reasonable fees and
expenses of such counsel. The Corporation need not pay for any settlement
made without its consent.

         The Corporation need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through negligence or bad
faith.

         To secure the Corporation's payment obligations in this Section,
the Trustee shall have a lien prior to the Debentures on all money or
property held or collected by the Trustee.

         When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 7.01(5) or (6) hereof occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

SECTION 8.08.  REPLACEMENT OF TRUSTEE.

         A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.

         The Trustee may resign by so notifying the Corporation. The Holders
of a majority in principal amount of the Debentures may remove the Trustee
by so notifying the Trustee and the Corporation. The Corporation may remove
the Trustee if:

         (1) the Trustee fails to comply with Section 8.10 hereof;

         (2) the Trustee is adjudged a bankrupt or an insolvent;

         (3) a receiver or public officer takes charge of the Trustee or
its property;

         (4) the Trustee becomes incapable of acting; or

         (5) the Trustee fails to comply with TIA Section 310(b) after an
Event of Default.

         If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Corporation shall promptly appoint a
successor Trustee. Within one year after the successor Trustee assumes
office, the Holders of a majority in principal amount of the Debentures may
appoint a successor Trustee to replace the successor Trustee appointed by
the Corporation.

                                     24

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<PAGE>

         If a successor Trustee does not take office within sixty (60) days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Corporation or the Holders of at least ten percent (10%) in principal amount
of the Debentures then outstanding may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

         If the Trustee fails to comply with Section 8.10 hereof, any
Debentureholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

         A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Corporation. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to the Debentureholders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 8.07 hereof.

SECTION 8.09.  SUCCESSOR TRUSTEE BY MERGER, ETC.

         If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

SECTION 8.10.  ELIGIBILITY; DISQUALIFICATION.

         This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall always have a
combined capital and surplus of at least $15,000,000 as set forth in its
most recent published annual report of condition. Neither the Corporation
nor any Affiliate shall serve as Trustee upon the Debentures or pursuant to
this Indenture. The Trustee shall at all time comply with the provisions of
TIA Section 310(b).

SECTION 8.11.  PREFERENTIAL COLLECTION OF CLAIMS AGAINST CORPORATION.

         The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed is subject to TIA Section 311(a) to the extent
indicated.

SECTION 8.12.  APPOINTMENT OF CO-TRUSTEE.

         It is the purpose of this Indenture that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as trustee in such
jurisdiction. It is recognized that in case of litigation under this
Indenture, and in particular in case of the enforcement of an Event of
Default, or in case the Trustee deems that by reason of any present or
future law of any jurisdiction it may not exercise any of the powers, rights
or remedies herein granted to the Trustee in trust, as herein granted, or

                                     25

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<PAGE>

take any other action which may be desirable or necessary in connection
therewith, it may be necessary that an additional individual or institution
be appointed as a separate or Co-Trustee.

         At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction, the Trustee and the Corporation may
appoint an additional individual or institution as a separate or Co-Trustee,
in which event each and every remedy, power, right, claim, demand, cause of
action, immunity, estate, title, interest and lien expressed or intended by
this Indenture, to be exercised by or vested in or conveyed to the Trustee
with respect thereto shall be exercisable by and vest in such separate or
Co-Trustee but only to the extent necessary to enable such separate or
Co-Trustee to exercise such powers, rights and remedies, and every covenant
and obligation necessary to the exercise thereof by such separate or
Co-Trustee shall run to and be enforceable by either of them. If the
Corporation does not join in such appointment within fifteen (15) days after
receipt by it of a request so to do, or in case an Event of Default has
occurred and is continuing, the Trustee alone shall have power to make such
appointment.

         Should any deed, conveyance or instrument in writing from the
Corporation be required by the separate or Co-Trustee so appointed by the
Trustee for more fully and certainly vesting in and confirming to it such
properties, rights, powers, trusts, duties and obligations, including
particularly the right to be paid its fees for services rendered, any and
all such deeds, conveyances and instruments in writing shall, on request, be
executed, acknowledged and delivered by the Corporation. In case any
separate or Co-Trustee, or a successor to either, shall die, become
incapable of acting, resign or be removed, all the estates, properties,
rights, powers, trusts, duties and obligations of such separate or
Co-Trustee, so far as permitted by law, shall vest in and be exercised by
the Trustee until the appointment of a new Trustee or successor to such
separate or Co-Trustee.

         The rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of this Indenture shall be conferred or
imposed upon and exercised or performed by the Trustee or by the Trustee and
such separate or Co-Trustee jointly, as shall be provided in the instrument
appointing such separate or Co-Trustee, except to the extent that under any
law of any jurisdiction in which any particular act is to be performed, the
Trustee shall be incompetent or unqualified to perform such act, in which
event such rights, powers, duties and obligations shall be exercised and
performed by such separate or Co-Trustee.

                     ARTICLE 9 - DISCHARGE OF INDENTURE

SECTION 9.01.  TERMINATION OF CORPORATION'S OBLIGATIONS.

         The Corporation may at any time terminate all of its obligations
under this Indenture if:

         (1) the Corporation provides written notice to the Trustee of the
Corporation's intent to terminate its obligation under this Indenture;

         (2) the Debentures mature within one year of the Corporation's
written notice of its intent to terminate or all of the Debentures are to be
called for redemption within one year of the

                                     26

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<PAGE>

Corporation's written notice of its intent to terminate under arrangements
satisfactory to the Trustee for giving the notice of redemption; and

         (3) the Corporation irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations sufficient to pay Principal and
interest on the Debentures at maturity or on redemption, as the case may be.
The Corporation may make the deposit only during the one-year period
referred to in paragraph (2) above.

         However, the Corporation's obligations in Sections 2.03, 2.04,
2.05, 2.06, 2.07, 5.01, 8.07, 8.08 and 9.03 hereof shall survive until the
Debentures are no longer outstanding. Thereafter, the Corporation's
obligations in Sections 8.07 and 9.03 hereof shall survive.

         After a deposit the Trustee upon request shall acknowledge in
writing the discharge of the Corporation's obligations under this Indenture
except for those surviving obligations specified above.

         In order to have money available on a payment date to pay Principal
or interest on the Debentures, the U.S. Government Obligations shall be
payable as to Principal or interest on or before such payment date in such
amounts as will provide the necessary money. The U.S. Government Obligations
shall not be callable at the issuer's option.

SECTION 9.02.  APPLICATION OF TRUST MONEY.

         The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 9.01 hereof. It shall
apply the deposited money and the money from the U.S. Government Obligations
through the Paying Agent and in accordance with this Indenture to the
payment of Principal and interest on the Debentures.

SECTION 9.03.  REPAYMENT TO CORPORATION.

         The Trustee and the Paying Agent shall promptly pay to the
Corporation upon request any excess money or securities held by the Trustee
as a result of the Corporation's making payments to the Trustee and Paying
Agent in excess of that required under the provisions of this Indenture. The
obligation of the Trustee and the Paying Agent to pay such excess money or
securities to the Corporation shall survive the payment and/or cancellation
of all of the Debentures until all such excess funds or securities have been
so paid.

         The Trustee and the Paying Agent shall pay to the Corporation
annually as of December 1 of each year any money held by them for the
payment of Principal or interest that remains unclaimed for two years. After
payment to the Corporation, Debentureholders entitled to the money must look
to the Corporation for payment as general creditors unless an applicable
abandoned property law designates another person.

                                     27

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<PAGE>

              ARTICLE 10 - AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 10.01.  WITHOUT CONSENT OF HOLDERS.

         The Corporation and the Trustee may amend or supplement this
Indenture or the Debentures without notice to or consent of any
Debentureholder:

         (1) to cure any ambiguity, omission, defect or inconsistency;

         (2) to comply with Section 6.01 hereof;

         (3) to provide for uncertificated Debentures in addition to or in
place of certificated Debentures; or

         (4) to make any change that does not materially adversely affect the
rights of any Debentureholder.

SECTION 10.02.  WITH CONSENT OF HOLDERS.

         The Corporation and the Trustee may amend or supplement this
Indenture or the Debentures with the written consent of the Holders of at
least a majority in principal amount of the Debentures then outstanding.
Without the consent of each Debentureholder affected, however, an amendment
under this Section may not:

         (1) reduce the amount of Debentures whose Holders must consent to an
amendment or waiver;

         (2) reduce the rate of or change the time for payment of interest on
any Debenture;

         (3) reduce the Principal of or change the maturity of any Debenture;

         (4) waive a Default in the payment of the Principal of or interest
on any Debenture;

         (5) make any Debenture payable in money other than that stated in
the Debenture; or

         (6) modify the provisions of Sections 7.04, 7.07 and 10.02 (second
sentence) hereof.

         After an amendment or supplement under this Section becomes
effective, the Corporation shall mail to Debentureholders a notice briefly
describing the amendment.

SECTION 10.03.  COMPLIANCE WITH TRUST INDENTURE ACT.

         Every amendment to or supplement of this Indenture or the
Debentures shall be set forth in a supplemental indenture that complies with
the TIA as then in effect.

                                     28

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<PAGE>

SECTION 10.04.  REVOCATION AND EFFECT OF CONSENTS.

         Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Debenture is a continuing consent by the
Holder and every subsequent Holder of a Debenture or portion of a Debenture
that evidences the same debt as the consenting Holder's Debenture, even if
notation of the consent is not made on any Debenture. However, any such
Holder or subsequent Holder may revoke the consent as to his Debenture or
portion of a Debenture if the Trustee receives the notice of revocation
before the date the amendment, supplement or waiver becomes effective.

SECTION 10.05.  NOTATION ON OR EXCHANGE OF DEBENTURES.

         The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Debenture thereafter authenticated. The
Corporation in exchange for all Debentures may issue and the Trustee shall
authenticate new Debentures that reflect the amendment, supplement or
waiver.

SECTION 10.06.  TRUSTEE PROTECTED.

         The Trustee need not sign any supplemental indenture that adversely
affects its rights.

                         ARTICLE 11 - MISCELLANEOUS

SECTION 11.01.  TRUST INDENTURE ACT CONTROLS.

         If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of TIA Section 318(c), the duties
imposed by TIA Section 318(c) shall control.

SECTION 11.02.  NOTICES.

         Any notice or communication by the Corporation or the Trustee to
the other is duly given if in writing and when delivered in person or mailed
by first-class mail addressed as follows:

if to the Corporation:

                  DELTA NATURAL GAS COMPANY, INC.
                  3617 Lexington Road
                  Winchester, Kentucky 40391
                  Attention: Treasurer

if to the Trustee:

                  FIFTH THIRD BANK
                  38 Fountain Square Plaza
                  Cincinnati, Ohio 45263
                  Attention: Corporate Trust Administration

                                     29

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<PAGE>

         The Corporation or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

         Any notice or communication to a Debentureholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Debentureholder or any defect
in it shall not affect its sufficiency with respect to other
Debentureholders.

         If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.

         If the Corporation mails a notice or communication to
Debentureholders, it shall mail a copy to the Trustee and each Agent at the
same time.

         All notices or communications shall be in writing, except as set
forth below.

         In case by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice
required by this Indenture, then such method of notification as shall be
made with the approval of the Trustee shall constitute a sufficient mailing
of such notice.

SECTION 11.03.  COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

         Debentureholders may communicate pursuant to TIA Section 312(b)
with other Debentureholders with respect to their rights under this
Indenture or the Debentures. The Corporation, the Trustee, the Registrar and
anyone else shall have the protection of TIA Section 312(c).

SECTION 11.04.  CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

         Upon any request or application by the Corporation to the Trustee
to take any action under this Indenture, the Corporation shall furnish to
the Trustee:

         (1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and

         (2) an Opinion of Counsel addressed to the Trustee and upon which
the Trustee may rely, stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.

SECTION 11.05.  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

         Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:

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<PAGE>

         (1) a statement that the persons making such Officers' Certificate or
Opinion of Counsel have read such covenant or condition;

         (2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;

         (3) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and

         (4) a statement as to whether or not, in the opinion of such
persons, such condition or covenant has been complied with.

SECTION 11.06.  RULES BY TRUSTEE AND AGENT.

         The Trustee may make reasonable rules for action by, or a meeting
of, Debentureholders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.

SECTION 11.07.  LEGAL HOLIDAYS.

         If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.

SECTION 11.08.  NO RECOURSE AGAINST OTHERS.

         No liability under the Debentures shall inure to any director,
officer, employee or stockholders, as such, of the Corporation and each
Debentureholder, by accepting the Debenture, waives and releases all such
liability.

SECTION 11.09.  DUPLICATE ORIGINALS.

         The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.

SECTION 11.10.  GOVERNING LAW.

         This Indenture and the Debentures shall be governed by and
construed in accordance with the laws of the Commonwealth of Kentucky,
without reference to its principles of conflicts of laws or choice of law.

SECTION 11.11.  TABLE OF CONTENTS, HEADINGS, ETC.

         The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no
way modify or restrict any of the terms or provisions hereof.

                                     31

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<PAGE>

         IN WITNESS WHEREOF, Delta Natural Gas Company, Inc. and The Fifth
Third Bank have caused this Indenture to be signed by their respective duly
authorized officers.

Dated: ______________, 2002             DELTA NATURAL GAS COMPANY,  INC.
                                          ("Corporation")

(SEAL)                                  By: _________________________________
                                            Glenn R. Jennings, President
                                              and Chief Executive Officer
Attest: _________________________
        John F. Hall, Secretary

Dated: ______________, 2002             FIFTH THIRD BANK
                                          ("Trustee")

                                        By: ________________________________
                                            Fred T. Overbeck, Trust Officer

                                     32

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                           FORM OF GLOBAL SECURITY

                                  EXHIBIT A

         THIS DEBENTURE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR NOMINEE OF A DEPOSITORY. THIS GLOBAL SECURITY IS EXCHANGEABLE
FOR DEBENTURES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY
OR ITS NOMINEE ONLY IN LIMITED CIRCUMSTANCES HEREINAFTER DESCRIBED AND MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY.

         Unless this certificate is presented by an authorized
representative of THE DEPOSITORY TRUST COMPANY, a New York corporation
("DTC"), to Delta Natural Gas Corporation, Inc., a Kentucky corporation, or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of CEDE & CO. or in such other
name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.

                     DELTA NATURAL GAS CORPORATION, INC.

                    _____% DEBENTURE DUE DECEMBER 1, 2022

                                                                  $20,000,000

No._______________________                           CUSIP No. ______________

         DELTA NATURAL GAS CORPORATION, INC., a Kentucky corporation, for
value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of TWENTY MILLION DOLLARS on December 1, 2022, and to pay
interest on said principal sum at the rate of _____% per annum calculated on
the basis of a 360-day year of twelve 30-day months.

1.       INTEREST.

         DELTA NATURAL GAS CORPORATION, INC. ("CORPORATION"), a Kentucky
corporation, promises to pay interest on the principal amount of this
Debenture at the rate per annum shown above. The Corporation will pay
interest quarterly on March 1, June 1, September 1 and December 1 of each
year (each such date being an "INTEREST PAYMENT DATE"), commencing March 1,
2003. Interest on the Debentures will accrue from the most recent date to
which interest has been paid, or, if no interest has been paid previously,
from the date of original

                                    A-1

<PAGE>
<PAGE>

issuance of this Debenture; provided that, if there is no existing default
in the payment of interest, and if this Debenture is authenticated between a
"Record Date" (as hereinafter defined) and the next succeeding Interest
Payment Date, interest shall accrue from the next Interest Payment Date. The
term "RECORD DATE" as used herein shall mean the February 15, May 15, August
15 or November 15, as the case may be, immediately preceding each Interest
Payment Date.

2.       METHOD OF PAYMENT.

         The Corporation will pay interest on the Debentures (except
defaulted interest) to the Paying Agent who will then pay such interest to
the Persons who are registered Holders of Debentures at the close of
business on the Record Date next preceding the Interest Payment Date. The
Corporation shall pay appropriate amounts to the Paying Agent in immediately
available funds at least one (1) business day preceding the Interest Payment
Date. The Paying Agent will pay interest to such Holders on the next
Interest Payment Date even though Debentures are canceled after the Record
Date but on or before the Interest Payment Date. Holders must surrender
Debentures to the Paying Agent to collect Principal payments; except that,
with respect to a Global Security, the Depository need not surrender the
Global Security to collect payments of Principal other than the final
payment of Principal of such Global Security, provided that the Depository
makes appropriate endorsement on such Global Security of such prepayments on
the Table of Prepayments attached hereto. The Paying Agent will pay
Principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However,
except as set forth in the last sentence of this paragraph: (i) the Paying
Agent may pay Principal and interest by check payable in such money; and
(ii) the Paying Agent may mail an interest check to a Holder's registered
address. Any Holder of at least $1,000,000 aggregate principal amount of
Debentures shall have the right to receive payment of Principal of and
interest on the Debentures by wire transfer of funds, provided that such
Debentureholder requests such form of payment, accompanied by appropriate
wire transfer instructions, by written notice to the Trustee and the Paying
Agent given not later than the Record Date immediately preceding such
payment.

3.       PAYING AGENT AND REGISTRAR.

         Initially, Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati,
Ohio 45263, will act as Paying Agent and Registrar. The Corporation may
change any Paying Agent, Registrar or co-registrar without notice. The
Corporation or any of its Subsidiaries may act in any such capacity.

4.       INDENTURE.

         The Corporation issued the Debentures under an Indenture dated as
of November 1, 2002 ("INDENTURE"), between the Corporation and the Trustee.
The terms of the Debentures include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) (the "ACT") as in effect on the date of the
Indenture. The Debentures are subject to all such terms, and
Debentureholders are referred to the Indenture and the Act for a statement
of such terms. Capitalized terms used but not otherwise defined herein shall
have the same meanings such terms are given in the Indenture. The

                                     A-2

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<PAGE>

Debentures are unsecured general obligations of the Corporation limited to
$20,000,000 in aggregate principal amount.

5.       REDEMPTION AT CORPORATION'S OPTION.

         The Corporation may, at its option, at any time on or after
_________, 2006, redeem all the Debentures or some of them from time to time
at a Redemption Price equal to (i) during the period from _______, 2006,
through ______, 2007, 102% of the Principal amount thereof plus unpaid
interest to the Redemption Date, (ii) during the period from _______, 2007,
through _____, 2008, 101% of the Principal amount thereof plus unpaid
interest to the Redemption Date and (iii) at any time after _______, 2008,
100% of the Principal amount thereof plus unpaid accrued interest to the
Redemption Date.

         Notice of redemption at the Corporation's option will be mailed at
least thirty (30) days before the Redemption Date to each Holder of
Debentures to be redeemed at his registered address as set forth in the
register. Debentures in denominations larger than $1,000 may be redeemed in
part but only in integral multiples of $1,000. On and after the Redemption
Date (if there is no default in the payment of the Redemption Price by the
Corporation), interest ceases to accrue on Debentures or portions thereof
called for redemption. The Corporation shall have the right, at its option,
to withdraw and rescind, in whole or in part, any such optional redemption
by the Corporation and any such notice of redemption given in connection
therewith up to five (5) days prior to the Redemption Date by written notice
of such withdrawal to the Trustee and to the Debentureholders affected
thereby.

6.       REDEMPTION BY THE CORPORATION IN THE EVENT OF DEATH OF A BENEFICIAL
         -------------------------------------------------------------------
         OWNER
         -----

         Unless the Debentures have been declared due and payable prior to
their maturity by reason of an Event of Default, the Representative (as
hereinafter defined) of a deceased Beneficial Owner (as hereinafter defined)
has the right to request redemption prior to stated maturity of all or part
of his interest in the Debenture, and the Corporation will redeem the same
subject to the limitations that the Corporation will not be obligated to
redeem, during the period from the original issue date through and including
____________, 2003 (the "Initial Period"), and during any twelve-month
period which ends on and includes each __________ thereafter (each such
twelve-month period being hereinafter referred to as a "Subsequent Period"),
(i) on behalf of a deceased Beneficial Owner any interest in the Debentures
which exceeds $25,000 principal amount or (ii) interests in the Debentures
exceeding $400,000 in aggregate principal amount. A request for redemption
may be initiated by the Representative of a deceased Beneficial Owner at any
time and in any principal amount.

         The Corporation may, at its option, redeem interests of any
deceased Beneficial Owner in the Debentures in the Initial Period or any
Subsequent Period in excess of the $25,000 limitation. Any such redemption,
to the extent that it exceeds the $25,000 limitation for any deceased
Beneficial Owner, shall not be included in the computation of the $400,000
aggregate limitation for such Initial Period or such Subsequent Period, as
the case may be, or for any succeeding Subsequent Period. The Corporation
may, at its option, redeem interests of deceased Beneficial Owners in the
Debentures, in the Initial Period or any Subsequent Period in an aggregate

                                    A-3

<PAGE>
<PAGE>

principal amount exceeding $400,000. Any such redemption, to the extent it
exceeds the $400,000 aggregate limitation, shall not reduce the $400,000
aggregate limitation for any Subsequent Period. On any determination by the
Corporation to redeem Debenture in excess of the $25,000 limitation or the
$400,000 aggregate limitation, Debentures so redeemed shall be redeemed in
the order of the receipt of Redemption Requests (as hereinafter defined) by
the Trustee.

         A request for redemption of an interest in the Debentures may be
initiated by the personal representative or other person authorized to
represent the estate of the deceased Beneficial Owner or from a surviving
joint tenant(s) or tenant(s) by the entirety or the trustee of a trust
(each, a "Representative"). The Representative shall deliver a request to
the Participant (hereinafter defined) through whom the deceased Beneficial
Owner owned such interest, in form satisfactory to the Participant, together
with evidence of the death of the Beneficial Owner, evidence of the
authority of the Representative satisfactory to the Participant, such
waivers, notices or certificates as may be required under applicable state
or federal law and such other evidence of the right to such redemption as
the Participant shall require. The request shall specify the principal
amount of the interest in the Debentures to be redeemed. The Participant
shall thereupon deliver to the Depositary a request for redemption
substantially in the form attached as EXHIBIT A hereto (a "Redemption
Request"). The Depositary will, on receipt thereof, forward the same to the
Trustee. The Trustee shall maintain records with respect to Redemption
Requests received by it including date of receipt, the name of the
Participant filing the Redemption Request and the status of each such
Redemption Request with respect to the $25,000 limitation and the $400,000
aggregate limitation. The Trustee will immediately file each Redemption
Request it receives, together with the information regarding the eligibility
thereof with respect to the $25,000 limitation and the $400,000 aggregate
limitation, with the Corporation. The Depositary, the Corporation and the
Trustee may conclusively assume, without independent investigation, that the
statements contained in each Redemption Request are true and correct and
shall have no responsibility for reviewing any documents submitted to the
Participant by the Representative or for determining whether the applicable
decedent is in fact the Beneficial Owner of the interest in the Debentures
to be redeemed or was in fact deceased and whether the Representative is
duly authorized to request the redemption on behalf of the applicable
Beneficial Owner.

         Subject to the $25,000 limitation and the $400,000 aggregate
limitation, the Corporation will, after the death of any Beneficial Owner,
redeem the interest of such Beneficial Owner in the Debenture within sixty
(60) days following receipt by the Corporation of a Redemption Request from
the Trustee. If Redemption Requests exceed the aggregate principal amount of
interests in Debentures required to be redeemed during the Initial Period or
during any Subsequent Period, then such excess Redemption Requests will be
applied in the order received by the Trustee to successive Subsequent
Periods, regardless of the number of Subsequent Periods required to redeem
such interests. The Corporation may, at any time notify the Trustee that it
will redeem, on a date not less than thirty (30) nor more than sixty (60)
days thereafter, all or any such lesser amount of Debentures for which
Redemption Requests have been received but which are not then eligible for
redemption by reason of the $25,000 limitation or the $400,000 aggregate
limitation. Any Debentures so redeemed shall be redeemed in the order of
receipt of Redemption Requests by the Trustee.

                                    A-4

<PAGE>
<PAGE>

         The price to be paid by the Corporation for the Debentures to be
redeemed pursuant to a Redemption Request is 100% of the principal amount
thereof plus accrued but unpaid interest to the date of payment. Subject to
arrangements with the Depositary, payment for interests in the Debentures
which are to be redeemed shall be made to the Depositary upon presentation
of Debentures to the Trustee for redemption in the aggregate principal
amount specified in the Redemption Requests submitted to the Trustee by the
Depositary which are to be fulfilled in connection with such payment. The
principal amount of any Debentures acquired or redeemed by the Corporation
other than by redemption at the option of any Representative of a deceased
Beneficial Owner pursuant to this section shall not be included in the
computation of either the $25,000 limitation or the $400,000 aggregate
limitation for the Initial Period or for any Subsequent Period.

         For purposes of this section, a "Beneficial Owner" means the Person
who has the right to sell, transfer or otherwise dispose of an interest in a
Debenture and the right to receive the proceeds therefrom, as well as the
interest and Principal payable to the holder thereof. In general, a
determination of beneficial ownership in the Debentures will be subject to
the rules, regulations and procedures governing the Depositary and
institutions that have accounts with the Depositary or a nominee thereof
("Participants").

         For purposes of this section, an interest in a Debenture held in
tenancy by the entirety, joint tenancy or by tenants in common will be
deemed to be held by a single Beneficial Owner and the death of a tenant by
the entirety, joint tenant or tenant in common will be deemed the death of a
Beneficial Owner. The death of a person who, during his lifetime, was
entitled to substantially all of the rights of a Beneficial Owner of an
interest in the Debentures will be deemed the death of the Beneficial Owner,
regardless of the recordation of such interest on the records of the
Participant, if such rights can be established to the satisfaction of the
Participant. Such interests shall be deemed to exist in typical cases of
nominee ownership, ownership under the Uniform Gifts to Minors Act or the
Uniform Transfers to Minors Act, community property or other similar joint
ownership arrangements, including individual retirement accounts or Keogh
[H.R. 10] plans maintained solely by or for the decedent or by or for the
decedent and any spouse, and trust and certain other arrangements where one
Person has substantially all of the rights of a Beneficial Owner during such
person's lifetime.

         In the case of a redemption request which is presented on behalf of
a deceased Beneficial Owner and which has not been fulfilled at the time we
give notice of our election to redeem the Debentures, the Debentures which
are the subject of such pending redemption request shall be redeemed prior
to any other Debentures.

         Any Redemption Request may be withdrawn by the Person(s) presenting
the same upon delivery of a written request for such withdrawal given by the
Participant on behalf of such Person to the Depositary and by the Depositary
to the Trustee not less than thirty (30) days prior to payment thereof by
the Corporation.

         The Corporation may, at its option, purchase any Debentures for
which Redemption Requests have been received in lieu of redeeming such
Debentures. Any Debentures so

                                    A-5

<PAGE>
<PAGE>

purchased by the Corporation shall either be reoffered for sale and sold
within 180 days after the date of purchase or presented to the Trustee for
redemption and cancellation.

         During such time or times as the Debentures are not represented by
a Global Security and are issued in definitive form, all references in this
Section to Participants and the Depositary, including the Depositary's
governing rules, regulations and procedures, shall be deemed deleted, all
determinations which under this section the Participants are required to
make shall be made by the Corporation (including, without limitation,
determining whether the applicable decedent is in fact the Beneficial Owner
of the interest in the Debentures to be redeemed or is in fact deceased and
whether the Representative is duly authorized to request redemption on
behalf of the applicable Beneficial Owner), all redemption requests, to be
effective, shall be delivered by the Representative to the Trustee, with a
copy to the Corporation, and shall be in the form of a Redemption Request
(with appropriate changes to reflect the fact that such Redemption Request
is being executed by a Representative) and, in addition to all documents
that are otherwise required to accompany a Redemption Request, shall be
accompanied by the Debenture that is the subject of such request.

7.       DENOMINATIONS, TRANSFER AND EXCHANGE.

         The Debentures are in registered form without coupons in
denominations of $1,000 and integral multiples thereof. The transfer of
Debentures shall be registered and Debentures may be exchanged as provided
in the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The Registrar need
not exchange or register the transfer of any Debenture or portion of a
Debenture selected for redemption. Also, it need not exchange or register
the transfer of any Debentures during that period of time subsequent to any
Record Date and prior to the next succeeding Interest Payment Date.

8.       PERSONS DEEMED OWNERS.

         The registered Holder of a Debenture may be treated as its owner
for all purposes.

9.       AMENDMENTS, SUPPLEMENTS AND WAIVERS.

         Subject to certain exceptions, the Indenture or the Debentures may
be amended or supplemented, and any existing Default may be waived, with the
consent of Holders of a majority in principal amount of the Debentures then
outstanding. Without the consent of any Debentureholder, the Indenture or
the Debentures may be amended or supplemented, for among other reasons, to
cure any ambiguity, defect or inconsistency, to provide for assumption of
Corporation obligations to Debentureholders or to make any change that does
not materially adversely affect the rights of any Debentureholder.

10.      DEFAULTS AND REMEDIES.

         An Event of Default is: default for thirty (30) days in payment of
interest on the Debentures; default in payment of Principal of the
Debentures; failure by the Corporation for

                                    A-6

<PAGE>
<PAGE>

sixty (60) days after notice to it to comply with any of its other
agreements in the Indenture or the Debentures; default in the payment of
Indebtedness having an outstanding principal balance of $100,000 or more
under certain circumstances; and certain events of bankruptcy or insolvency.
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least twenty-five percent (25%) in principal amount of the Debentures
may declare all the Debentures to be due and payable immediately.
Debentureholders may not enforce the Indenture or the Debentures except as
provided in the Indenture. The Trustee may require indemnity satisfactory to
it before it enforces the Indenture or the Debentures. Subject to certain
limitations, Holders of a majority in principal amount of the Debentures may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Debentureholders notice of any continuing Default (except a
default in payment of Principal or interest) if it determines that
withholding notice is in their interests. The Corporation must furnish an
annual Officers' Certificate to the Trustee.

         The Trustee shall not be charged with knowledge of any Event of
Default as defined in the Indenture, unless written notice thereof shall
have been given to a Trust Officer of the Trustee at the Corporate Trust
Office by the Corporation, the Paying Agent, the Holder of a Debenture or an
agent of such Holder.

11.      TRUSTEE DEALINGS WITH CORPORATION.

         Fifth Third Bank, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Corporation or its Affiliates, and may
otherwise deal with the Corporation or its Affiliates, as if it were not
Trustee, subject to any limitations imposed by the Act.

12.      NO RECOURSE AGAINST OTHERS.

         A director, officer, employee or stockholder, as such, of the
Corporation shall not have any liability for any obligations of the
Corporation under the Debentures or the Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. Each
Debentureholder by accepting a Debenture waives and releases all such
liability. The waiver and release are part of the consideration for the
issue of the Debentures.

13.      AUTHENTICATION.

         This Debenture shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.

14.      ABBREVIATIONS.

         Customary abbreviations may be used in the name of a
Debentureholder or an assignee, such as TEN COM ( = tenants in common), TEN
ENT ( = tenants by the entirety), JT TEN ( = joint tenants with right of
survivorship and not as tenants in common), CUST ( = Custodian), and U/G/M/A
( = Uniform Gifts to Minors Act).

                                    A-7

<PAGE>
<PAGE>

Dated:
Authenticated:

FIFTH THIRD BANK,                        DELTA NATURAL GAS
  AS TRUSTEE                             CORPORATION, INC.

By:_______________________________       By:_________________________________
     Its: Authorized Signer                 Glenn A. Jennings, President and
                                            Chief Executive Officer

                                         By:_________________________________
                                            John F. Hall, Secretary

                                         (SEAL)

                          _________________________

The Corporation will furnish to any Debentureholder upon written request and
without charge a copy of the Indenture, which has in it the text of this
Debenture in larger type. Requests may be made to: Treasurer, Delta Natural
Gas Corporation, Inc., 3617 Lexington Road, Winchester, Kentucky 40391.

                                    A-8

<PAGE>
<PAGE>

                            ____________________
                            TABLE OF PREPAYMENTS

         Upon all partial payments of principal of the within Debenture,
this Debenture shall be surrendered to the Trustee for issuance of a new
Debenture unless the registered Holder hereof shall make appropriate
endorsements on the table below indicating the amount of principal so
prepaid, prior to any transfer to this Debenture. Any purchaser or
transferee of this Debenture shall verify with the Trustee the principal
balance outstanding prior to the purchase or transfer hereof.

                PRINCIPAL               REMAINING UNPAID
DATE            AMOUNT PAID             PRINCIPAL BALANCE          SIGNATURE
----            -----------             -----------------          ---------

                                    A-9

<PAGE>
<PAGE>

                               ASSIGNMENT FORM

I/We assign and transfer this Debenture to

[________________________]
(Insert assignee's social
 security or tax I.D. number)

         _________________________________________________________________

         _________________________________________________________________

         _________________________________________________________________
              (Print or type name, address and zip code of assignee)

and irrevocably appoint __________________________________ agent to transfer
this Debenture on the books of the Corporation. The agent may substitute
another to act for him.

DATE: ___________________  SIGNATURE: ___________________________________
                                             (Sign exactly as your
                                              name appears on this
                                              Debenture)

Signature Guarantee

_______________________

                                    A-10

<PAGE>
<PAGE>
                                  EXHIBIT A

                         FORM OF REDEMPTION REQUEST
                       DELTA NATURAL GAS COMPANY, INC.
                    ____% DEBENTURES DUE DECEMBER 1, 2022
                             (THE "DEBENTURES")

                            CUSIP NO. __________

         The undersigned, ____________________ (the "Participant"), does
hereby certify, pursuant to the provisions of that certain Indenture dated
as of December 1, 2002 (the "Indenture") made by Delta Natural Gas Company,
Inc. (the "Company") and Fifth Third Bank, as Trustee (the "Trustee"), to
The Depositary Trust Company (the "Depositary"), the Company, and the
Trustee that:

         1. [Name of deceased Beneficial Owner] is deceased.

         2. [Name of deceased Beneficial Owner] had a $__________ interest
in the above referenced Debentures.

         3. [Name of Representative] is [Beneficial Owner's personal
representative/other person authorized to represent the estate of the
Beneficial Owner/surviving joint tenant/surviving tenant by the
entirety/trustee of a trust] of [Name of deceased Beneficial Owner] and has
delivered to the undersigned a request for redemption in form satisfactory
to the undersigned, requesting that $__________ principal amount of said
Debentures be redeemed pursuant to said Indenture. The documents
accompanying such request, all of which are in proper form, are in all
respects satisfactory to the undersigned and the [Name of Representative] is
entitled to have the Debentures to which this Request relates redeemed.

         4. The Participant holds the interest in the Debentures with
respect to which this Redemption Request is being made on behalf of [Name of
deceased Beneficial Owner].

         5. The Participant hereby certifies that it will indemnify and hold
harmless the Depositary, the Trustee and the Corporation (including their
respective officers, directors, agents, attorneys and employees), against
all damages, loss, cost, expense (including reasonable attorneys' and
accountants' fees), obligations, claims or liability (collectively, the
"Damages") incurred by the indemnified party or parties as a result of or in
connection with the redemption of Debentures to which this Request relates.
The Participant will, at the request of the Corporation, forward to the
Corporation, a copy of the documents submitted by [Name of Representative]
in support of the request for redemption.

                                    A-11

<PAGE>
<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this Redemption
Request as of ____________, _____.

                                        [PARTICIPANT NAME]

                                        By:_________________________________

                                        Name:_______________________________

                                        Title:______________________________

                                    A-12

<PAGE>
<PAGE>

                              FORM OF DEBENTURE

                                  EXHIBIT B
                             (Face of Debenture)

                       DELTA NATURAL GAS COMPANY, INC.

                    _____% DEBENTURE DUE DECEMBER 1, 2022

No. ______________________                         $_________________________

         DELTA NATURAL GAS COMPANY, INC., a Kentucky corporation, for value
received, hereby promises to pay to ________________________, or registered
assigns, the principal sum of_______________________ DOLLARS on _________,
2022, and to pay interest on said principal sum at the rate of _____% per
annum calculated on the basis of a 360-day year of twelve 30-day months.

         INTEREST PAYMENT DATES: March 1, June 1, September 1 and December 1

         RECORD DATES: February 15, May 15, August 15 and November 15

Dated:

Authenticated:

FIFTH THIRD BANK,                          DELTA NATURAL GAS
  AS TRUSTEE                                 COMPANY, INC.

By:_____________________________           By:_______________________________
     Its: Authorized Signer                   Glenn A. Jennings, President

                                           By:_______________________________
                                              John F. Hall, Secretary

                                           (SEAL)

                                    B-1

<PAGE>
<PAGE>

                             (Back of Debenture)

                       DELTA NATURAL GAS COMPANY, INC.

                   _______% DEBENTURE DUE DECEMBER 1, 2022

1.       INTEREST.

         DELTA NATURAL GAS CORPORATION, INC. ("CORPORATION"), a Kentucky
corporation, promises to pay interest on the principal amount of this
Debenture at the rate per annum shown above. The Corporation will pay
interest quarterly on March 1, June 1, September 1 and December 1 of each
year (each such date being an "INTEREST PAYMENT DATE"), commencing March 1,
2003. Interest on the Debentures will accrue from the most recent date to
which interest has been paid, or, if no interest has been paid previously,
from the date of original issuance of this Debenture; provided that, if
there is no existing default in the payment of interest, and if this
Debenture is authenticated between a "Record Date" (as hereinafter defined)
and the next succeeding Interest Payment Date, interest shall accrue from
the next Interest Payment Date. The term "RECORD DATE" as used herein shall
mean the February 15, May 15, August 15 or November 15, as the case may be,
immediately preceding each Interest Payment Date.

2.       METHOD OF PAYMENT.

         The Corporation will pay interest on the Debentures (except
defaulted interest) to the Paying Agent who will then pay such interest to
the Persons who are registered Holders of Debentures at the close of
business on the Record Date next preceding the Interest Payment Date. The
Corporation shall pay appropriate amounts to the Paying Agent in immediately
available funds at least one (1) business day preceding the Interest Payment
Date. The Paying Agent will pay interest to such Holders on the next
Interest Payment Date even though Debentures are canceled after the Record
Date but on or before the Interest Payment Date. Holders must surrender
Debentures to the Paying Agent to collect Principal payments; except that,
with respect to a Global Security, the Depository need not surrender the
Global Security to collect payments of Principal other than the final
payment of Principal of such Global Security, provided that the Depository
makes appropriate endorsement on such Global Security of such prepayments on
the Table of Prepayments attached hereto. The Paying Agent will pay
Principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However,
except as set forth in the last sentence of this paragraph: (i) the Paying
Agent may pay Principal and interest by check payable in such money; and
(ii) the Paying Agent may mail an interest check to a Holder's registered
address. Any Holder of at least $1,000,000

                                    B-2

<PAGE>
<PAGE>

aggregate principal amount of Debentures shall have the right to receive
payment of Principal of and interest on the Debentures by wire transfer of
funds, provided that such Debentureholder requests such form of payment,
accompanied by appropriate wire transfer instructions, by written notice to
the Trustee and the Paying Agent given not later than the Record Date
immediately preceding such payment.

3.       PAYING AGENT AND REGISTRAR.

         Initially, Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati,
Ohio 45263, will act as Paying Agent and Registrar. The Corporation may
change any Paying Agent, Registrar or co-registrar without notice. The
Corporation or any of its Subsidiaries may act in any such capacity.

4.       INDENTURE.

         The Corporation issued the Debentures under an Indenture dated as
of November 1, 2002 ("INDENTURE"), between the Corporation and the Trustee.
The terms of the Debentures include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) (the "ACT") as in effect on the date of the
Indenture. The Debentures are subject to all such terms, and
Debentureholders are referred to the Indenture and the Act for a statement
of such terms. Capitalized terms used but not otherwise defined herein shall
have the same meanings such terms are given in the Indenture. The Debentures
are unsecured general obligations of the Corporation limited to $20,000,000
in aggregate principal amount.

5.       REDEMPTION AT CORPORATION'S OPTION.

         The Corporation may, at its option, at any time on or after
_________, 2006, redeem all the Debentures or some of them from time to time
at a Redemption Price equal to (i) during the period from _______, 2006,
through ______, 2007, 102% of the Principal amount thereof plus unpaid
interest to the Redemption Date, (ii) during the period from _______, 2007,
through _____, 2008, 101% of the Principal amount thereof plus unpaid
interest to the Redemption Date and (iii) at any time after _______, 2008,
100% of the Principal amount thereof plus unpaid accrued interest to the
Redemption Date.

         Notice of redemption at the Corporation's option will be mailed at
least thirty (30) days before the Redemption Date to each Holder of
Debentures to be redeemed at his registered address as set forth in the
register. Debentures in denominations larger than $1,000 may be redeemed in
part but only in integral multiples of $1,000. On and after the Redemption
Date (if there is no default in the payment of the Redemption Price by the
Corporation), interest ceases to accrue on Debentures or portions thereof
called for redemption. The Corporation shall have the right, at its option,
to withdraw and rescind, in whole or in part, any such optional redemption
by the Corporation and any such notice of redemption given in connection
therewith up to five (5) days prior to the Redemption Date by written notice
of such withdrawal to the Trustee and to the Debentureholders affected
thereby.

                                    B-3

<PAGE>
<PAGE>

6.       REDEMPTION BY THE CORPORATION IN THE EVENT OF DEATH OF A BENEFICIAL
         -------------------------------------------------------------------
         OWNER
         -----

         Unless the Debentures have been declared due and payable prior to
their maturity by reason of an Event of Default, the Representative (as
hereinafter defined) of a deceased Beneficial Owner (as hereinafter defined)
has the right to request redemption prior to stated maturity of all or part
of his interest in the Debenture, and the Corporation will redeem the same
subject to the limitations that the Corporation will not be obligated to
redeem, during the period from the original issue date through and including
____________, 2003 (the "Initial Period"), and during any twelve-month
period which ends on and includes each __________ thereafter (each such
twelve-month period being hereinafter referred to as a "Subsequent Period"),
(i) on behalf of a deceased Beneficial Owner any interest in the Debentures
which exceeds $25,000 principal amount or (ii) interests in the Debentures
exceeding $400,000 in aggregate principal amount. A request for redemption
may be initiated by the Representative of a deceased Beneficial Owner at any
time and in any principal amount.

         The Corporation may, at its option, redeem interests of any
deceased Beneficial Owner in the Debentures in the Initial Period or any
Subsequent Period in excess of the $25,000 limitation. Any such redemption,
to the extent that it exceeds the $25,000 limitation for any deceased
Beneficial Owner, shall not be included in the computation of the $400,000
aggregate limitation for such Initial Period or such Subsequent Period, as
the case may be, or for any succeeding Subsequent Period. The Corporation
may, at its option, redeem interests of deceased Beneficial Owners in the
Debentures, in the Initial Period or any Subsequent Period in an aggregate
principal amount exceeding $400,000. Any such redemption, to the extent it
exceeds the $400,000 aggregate limitation, shall not reduce the $400,000
aggregate limitation for any Subsequent Period. On any determination by the
Corporation to redeem Debenture in excess of the $25,000 limitation or the
$400,000 aggregate limitation, Debentures so redeemed shall be redeemed in
the order of the receipt of Redemption Requests (as hereinafter defined) by
the Trustee.

         A request for redemption of an interest in the Debentures may be
initiated by the personal representative or other person authorized to
represent the estate of the deceased Beneficial Owner or from a surviving
joint tenant(s) or tenant(s) by the entirety or the trustee of a trust
(each, a "Representative"). The Representative shall deliver a request to
the Participant (hereinafter defined) through whom the deceased Beneficial
Owner owned such interest, in form satisfactory to the Participant, together
with evidence of the death of the Beneficial Owner, evidence of the
authority of the Representative satisfactory to the Participant, such
waivers, notices or certificates as may be required under applicable state
or federal law and such other evidence of the right to such redemption as
the Participant shall require. The request shall specify the principal
amount

                                    B-4

<PAGE>
<PAGE>

of the interest in the Debentures to be redeemed. The Participant shall
thereupon deliver to the Depositary a request for redemption substantially
in the form attached as EXHIBIT A hereto (a "Redemption Request"). The
Depositary will, on receipt thereof, forward the same to the Trustee. The
Trustee shall maintain records with respect to Redemption Requests received
by it including date of receipt, the name of the Participant filing the
Redemption Request and the status of each such Redemption Request with
respect to the $25,000 limitation and the $400,000 aggregate limitation. The
Trustee will immediately file each Redemption Request it receives, together
with the information regarding the eligibility thereof with respect to the
$25,000 limitation and the $400,000 aggregate limitation, with the
Corporation. The Depositary, the Corporation and the Trustee may
conclusively assume, without independent investigation, that the statements
contained in each Redemption Request are true and correct and shall have no
responsibility for reviewing any documents submitted to the Participant by
the Representative or for determining whether the applicable decedent is in
fact the Beneficial Owner of the interest in the Debentures to be redeemed
or was in fact deceased and whether the Representative is duly authorized to
request the redemption on behalf of the applicable Beneficial Owner.

         Subject to the $25,000 limitation and the $400,000 aggregate
limitation, the Corporation will, after the death of any Beneficial Owner,
redeem the interest of such Beneficial Owner in the Debenture within sixty
(60) days following receipt by the Corporation of a Redemption Request from
the Trustee. If Redemption Requests exceed the aggregate principal amount of
interests in Debentures required to be redeemed during the Initial Period or
during any Subsequent Period, then such excess Redemption Requests will be
applied in the order received by the Trustee to successive Subsequent
Periods, regardless of the number of Subsequent Periods required to redeem
such interests. The Corporation may, at any time notify the Trustee that it
will redeem, on a date not less than thirty (30) nor more than sixty (60)
days thereafter, all or any such lesser amount of Debentures for which
Redemption Requests have been received but which are not then eligible for
redemption by reason of the $25,000 limitation or the $400,000 aggregate
limitation. Any Debentures so redeemed shall be redeemed in the order of
receipt of Redemption Requests by the Trustee.

         The price to be paid by the Corporation for the Debentures to be
redeemed pursuant to a Redemption Request is 100% of the principal amount
thereof plus accrued but unpaid interest to the date of payment. Subject to
arrangements with the Depositary, payment for interests in the Debentures
which are to be redeemed shall be made to the Depositary upon presentation
of Debentures to the Trustee for redemption in the aggregate principal
amount specified in the Redemption Requests submitted to the Trustee by the
Depositary which are to be fulfilled in connection with such payment. The
principal amount of any Debentures acquired or redeemed by the Corporation
other than by redemption at the option of any Representative of a deceased
Beneficial Owner pursuant to this section shall not be included in the
computation of either the $25,000 limitation or the $400,000 aggregate
limitation for the Initial Period or for any Subsequent Period.

                                    B-5

<PAGE>
<PAGE>

         For purposes of this section, a "Beneficial Owner" means the Person
who has the right to sell, transfer or otherwise dispose of an interest in a
Debenture and the right to receive the proceeds therefrom, as well as the
interest and Principal payable to the holder thereof. In general, a
determination of beneficial ownership in the Debentures will be subject to
the rules, regulations and procedures governing the Depositary and
institutions that have accounts with the Depositary or a nominee thereof
("Participants").

         For purposes of this section, an interest in a Debenture held in
tenancy by the entirety, joint tenancy or by tenants in common will be
deemed to be held by a single Beneficial Owner and the death of a tenant by
the entirety, joint tenant or tenant in common will be deemed the death of a
Beneficial Owner. The death of a person who, during his lifetime, was
entitled to substantially all of the rights of a Beneficial Owner of an
interest in the Debentures will be deemed the death of the Beneficial Owner,
regardless of the recordation of such interest on the records of the
Participant, if such rights can be established to the satisfaction of the
Participant. Such interests shall be deemed to exist in typical cases of
nominee ownership, ownership under the Uniform Gifts to Minors Act or the
Uniform Transfers to Minors Act, community property or other similar joint
ownership arrangements, including individual retirement accounts or Keogh
[H.R. 10] plans maintained solely by or for the decedent or by or for the
decedent and any spouse, and trust and certain other arrangements where one
Person has substantially all of the rights of a Beneficial Owner during such
person's lifetime.

         In the case of a redemption request which is presented on behalf of
a deceased Beneficial Owner and which has not been fulfilled at the time we
give notice of our election to redeem the Debentures, the Debentures which
are the subject of such pending redemption request shall be redeemed prior
to any other Debentures.

         Any Redemption Request may be withdrawn by the Person(s) presenting
the same upon delivery of a written request for such withdrawal given by the
Participant on behalf of such Person to the Depositary and by the Depositary
to the Trustee not less than thirty (30) days prior to payment thereof by
the Corporation.

         The Corporation may, at its option, purchase any Debentures for
which Redemption Requests have been received in lieu of redeeming such
Debentures. Any Debentures so purchased by the Corporation shall either be
reoffered for sale and sold within 180 days after the date of purchase or
presented to the Trustee for redemption and cancellation.

         During such time or times as the Debentures are not represented by
a Global Security and are issued in definitive form, all references in this
Section to Participants and the Depositary, including the Depositary's
governing rules, regulations and procedures, shall be deemed deleted, all
determinations which under this section the Participants are required to
make shall be made by the Corporation (including, without limitation,
determining whether the applicable decedent is in fact the Beneficial Owner
of the interest in the Debentures to be redeemed or is in fact deceased and
whether the Representative is duly authorized to request redemption on
behalf of

                                    B-6

<PAGE>
<PAGE>

the applicable Beneficial Owner), all redemption requests, to be effective,
shall be delivered by the Representative to the Trustee, with a copy to the
Corporation, and shall be in the form of a Redemption Request (with
appropriate changes to reflect the fact that such Redemption Request is
being executed by a Representative) and, in addition to all documents that
are otherwise required to accompany a Redemption Request, shall be
accompanied by the Debenture that is the subject of such request.

7.       DENOMINATIONS, TRANSFER AND EXCHANGE.

         The Debentures are in registered form without coupons in
denominations of $1,000 and integral multiples thereof. The transfer of
Debentures shall be registered and Debentures may be exchanged as provided
in the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes
and fees required by law or permitted by the Indenture. The Registrar need
not exchange or register the transfer of any Debenture or portion of a
Debenture selected for redemption. Also, it need not exchange or register
the transfer of any Debentures during that period of time subsequent to any
Record Date and prior to the next succeeding Interest Payment Date.

8.       PERSONS DEEMED OWNERS.

         The registered Holder of a Debenture may be treated as its owner
for all purposes.

9.       AMENDMENTS, SUPPLEMENTS AND WAIVERS.

         Subject to certain exceptions, the Indenture or the Debentures may
be amended or supplemented, and any existing Default may be waived, with the
consent of Holders of a majority in principal amount of the Debentures then
outstanding. Without the consent of any Debentureholder, the Indenture or
the Debentures may be amended or supplemented, for among other reasons, to
cure any ambiguity, defect or inconsistency, to provide for assumption of
Corporation obligations to Debentureholders or to make any change that does
not materially adversely affect the rights of any Debentureholder.

10.      DEFAULTS AND REMEDIES.

         An Event of Default is: default for thirty (30) days in payment of
interest on the Debentures; default in payment of Principal of the
Debentures; failure by the Corporation for sixty (60) days after notice to
it to comply with any of its other agreements in the Indenture or the
Debentures; default in the payment of Indebtedness having an outstanding
principal balance of $100,000 or more under certain circumstances; and
certain events of bankruptcy or insolvency. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least twenty-five
percent (25%) in principal amount of the Debentures may declare all the
Debentures to be due and payable immediately. Debentureholders may not
enforce the Indenture or the Debentures except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before

                                    B-7

<PAGE>
<PAGE>

it enforces the Indenture or the Debentures. Subject to certain limitations,
Holders of a majority in principal amount of the Debentures may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Debentureholders notice of any continuing Default (except a default in
payment of Principal or interest) if it determines that withholding notice
is in their interests. The Corporation must furnish an annual Officers'
Certificate to the Trustee.

         The Trustee shall not be charged with knowledge of any Event of
Default as defined in the Indenture, unless written notice thereof shall
have been given to a Trust Officer of the Trustee at the Corporate Trust
Office by the Corporation, the Paying Agent, the Holder of a Debenture or an
agent of such Holder.

11.      TRUSTEE DEALINGS WITH CORPORATION.

         Fifth Third Bank, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Corporation or its Affiliates, and may
otherwise deal with the Corporation or its Affiliates, as if it were not
Trustee, subject to any limitations imposed by the Act.

12.      NO RECOURSE AGAINST OTHERS.

         A director, officer, employee or stockholder, as such, of the
Corporation shall not have any liability for any obligations of the
Corporation under the Debentures or the Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. Each
Debentureholder by accepting a Debenture waives and releases all such
liability. The waiver and release are part of the consideration for the
issue of the Debentures.

13.      AUTHENTICATION.

         This Debenture shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent.

14.      ABBREVIATIONS.

         Customary abbreviations may be used in the name of a
Debentureholder or an assignee, such as TEN COM ( = tenants in common), TEN
ENT ( = tenants by the entirety), JT TEN ( = joint tenants with right of
survivorship and not as tenants in common), CUST ( = Custodian), and U/G/M/A
( = Uniform Gifts to Minors Act).

The Corporation will furnish to any Debentureholder upon written request and
without charge a copy of the Indenture, which has in it the text of this
Debenture in larger type. Requests may be made to: Treasurer, Delta Natural
Gas Company, Inc., 3617 Lexington Road, Winchester, Kentucky 40391.

                                    B-8

<PAGE>
<PAGE>

                               ASSIGNMENT FORM

I/We assign and transfer this Debenture to

[________________________]
(Insert assignee's social
 security or tax I.D. number)

         _________________________________________________________________

         _________________________________________________________________

         _________________________________________________________________
           (Print or type name, address and zip code of assignee)

and irrevocably appoint _________________________ agent to transfer this
Debenture on the books of the Corporation. The agent may substitute another
to act for him.

Date: ___________________  Signature: ____________________________________
                                             (Sign exactly as your
                                              name appears on the
                                              other side of this
                                              Debenture)

Signature Guarantee

___________________________

                                    B-9

<PAGE>
<PAGE>

                                  EXHIBIT A

                         FORM OF REDEMPTION REQUEST
                       DELTA NATURAL GAS COMPANY, INC.
                    ____% DEBENTURES DUE DECEMBER 1, 2022
                             (THE "DEBENTURES")

                            CUSIP NO. __________

         The undersigned, ____________________ (the "Participant"), does
hereby certify, pursuant to the provisions of that certain Indenture dated
as of December 1, 2002 (the "Indenture") made by Delta Natural Gas Company,
Inc. (the "Company") and Fifth Third Bank, as Trustee (the "Trustee"), to
The Depositary Trust Company (the "Depositary"), the Company, and the
Trustee that:

         1. [Name of deceased Beneficial Owner] is deceased.

         2. [Name of deceased Beneficial Owner] had a $__________ interest in
the above referenced Debentures.

         3. [Name of Representative] is [Beneficial Owner's personal
representative/other person authorized to represent the estate of the
Beneficial Owner/surviving joint tenant/surviving tenant by the
entirety/trustee of a trust] of [Name of deceased Beneficial Owner] and has
delivered to the undersigned a request for redemption in form satisfactory
to the undersigned, requesting that $__________ principal amount of said
Debentures be redeemed pursuant to said Indenture. The documents
accompanying such request, all of which are in proper form, are in all
respects satisfactory to the undersigned and the [Name of Representative] is
entitled to have the Debentures to which this Request relates redeemed.

         4. The Participant holds the interest in the Debentures with
respect to which this Redemption Request is being made on behalf of [Name of
deceased Beneficial Owner].

         5. The Participant hereby certifies that it will indemnify and hold
harmless the Depositary, the Trustee and the Corporation (including their
respective officers, directors, agents, attorneys and employees), against
all damages, loss, cost, expense (including reasonable attorneys' and
accountants' fees), obligations, claims or liability (collectively, the
"Damages") incurred by the indemnified party or parties as a result of or in
connection with the redemption of Debentures to which this Request relates.
The Participant will, at the request of the Corporation, forward to the
Corporation, a copy of the documents submitted by [Name of Representative]
in support of the request for redemption.

                                    B-10

<PAGE>
<PAGE>

     IN WITNESS WHEREOF, the undersigned has executed this Redemption
Request as of ____________, _____.

                                     [PARTICIPANT NAME]

                                     By:______________________________________

                                     Name:____________________________________

                                     Title:___________________________________

                                    B-11

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