MICHIGAN CONSOLIDATED GAS CO /MI/ (Form: S-3, Received: 06/19/2001 17:28:23)

As filed with the Securities and Exchange Commission on June 19, 2001

Registration No. 333-[ ]

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Michigan Consolidated Gas Company

(Exact name of Registrant as specified in its charter)






Michigan		38-0478040
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

500 Griswold Street

Detroit, Michigan 48226

(313) 965-2430

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Susan M. Beale

Vice President and Corporate Secretary

Michigan Consolidated Gas Company

2000 2nd Avenue

Detroit, Michigan 48226

(313) 235-4000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:


Frances B. Rohlman DTE Energy Company 2000 2nd Avenue Detroit, Michigan 48226 (313) 235-4000		Jonathan B. Miller Sidley Austin Brown & Wood LLP One World Trade Center New York, New York 10048 (212) 839-5300

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.

CALCULATION OF REGISTRATION FEE





	Proposed Maximum
	Aggregate	Amount of
Title of Each Class of Securities to be Registered	Offering Price(1)	Registration Fee


Senior Debt Securities	$360,000,000	$90,000

(1) Such amount shall be increased if any debt securities are issued at an original issue discount by an amount such that the net proceeds to be received by the registrant shall be equal to the above amount to be registered. Any offering of securities denominated other than in U.S. dollars will be treated as the equivalent in U.S. dollars based upon the official exchange rate applicable to the purchase of such securities from the registrant.

Pursuant to the provisions of Rule 429 under the Securities Act of 1933, the prospectus contained herein constitutes a combined prospectus relating also to $140,000,000 of unsold senior debt securities registered pursuant to the registration statement on Form S-3 (registration no. 333-56333). In the event that any of such previously registered senior debt securities are offered prior to the effective date of this registration statement, the amount of such senior debt securities will not be included in any prospectus hereunder. The amount of senior debt securities being registered hereunder, together with the remaining senior debt securities previously registered under registration statement no. 333-56333, represents the maximum amount of the registrant’s senior debt securities which are expected to be offered for sale. This registration statement, which is a new registration statement, also constitutes post-effective amendment no. 1 to registration statement no. 333-56333, and such post-effective amendment shall hereafter become effective concurrently with the effectiveness of this registration statement and in accordance with Section 8(c) of the Securities Act of 1933. This registration statement and the registration statement amended hereby are collectively referred to herein as the “registration statement”.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until
the Securities and Exchange Commission declares the registration statement effective. This preliminary prospectus is not an
offer to sell or the solicitation of an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion, dated June 19, 2001

Prospectus

$500,000,000

Michigan Consolidated Gas Company

Senior Debt Securities

By this prospectus, Michigan Consolidated Gas Company from time to time may offer senior debt securities. Prior to the release date described in this prospectus, the senior debt securities will be secured by first mortgage bonds.

This prospectus provides a general description of the debt securities MichCon may offer. Supplements to this prospectus will describe the specific terms of the debt securities that MichCon actually offers. This prospectus may not be used to sell debt securities unless it is accompanied by a prospectus supplement that describes those debt securities.

Before you invest, you should carefully read this prospectus, any applicable prospectus supplement and any information under the heading “Where You Can Find More Information.”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

This prospectus is dated , 2001.

TABLE OF CONTENTS


	Page

ABOUT THIS PROSPECTUS		3




CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS		3




MICHIGAN CONSOLIDATED GAS COMPANY		4




USE OF PROCEEDS		4




RATIOS OF EARNINGS TO FIXED CHARGES		4




SECURITIES		5




DESCRIPTION OF THE SENIOR DEBT SECURITIES		6




DESCRIPTION OF THE FIRST MORTGAGE BONDS		16




PLAN OF DISTRIBUTION		20




LEGAL MATTERS		21




EXPERTS		21




WHERE YOU CAN FIND MORE INFORMATION		21

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that Michigan Consolidated Company, which we refer to as MichCon, filed with the Securities and Exchange Commission utilizing a “shelf” registration process. Under this shelf process, MichCon may sell any combination of the debt securities described in this prospectus in one or more offerings up to a total offering price of $500,000,000, including the U.S. dollar equivalent of non-U.S. dollar offerings. This prospectus provides you with a general description of the debt securities MichCon may offer. Each time MichCon offers to sell debt securities, MichCon will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read this prospectus, the applicable prospectus supplement and the additional information described below under the heading “Where You Can Find More Information.”

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This prospectus and the documents incorporated by reference in this prospectus contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, with respect to the financial condition, results of operations and business of MichCon. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates” or similar expressions in this prospectus or in documents incorporated herein.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Factors that may cause actual results to differ from those contemplated by the forward-looking statements include, among others, the following variables:

• the effects of weather and other natural phenomena;

• increased competition from other energy suppliers as well as alternative forms of energy;

• the capital intensive nature of MichCon’s business;

• the economic climate and growth in the geographic areas in which MichCon does business;

• the uncertainty of gas reserve estimates;

• the timing and extent of changes in commodity prices for natural gas, electricity and crude oil;

• conditions of capital markets and equity markets; and

• the effects of changes in governmental policies and regulatory actions, including income taxes, environmental compliance and authorized rates, including limitations on the price of gas that may be recovered from customers.

In addition, expected results will be affected by DTE Energy Company’s merger with MichCon’s parent company, MCN Energy Group Inc., and the timing of the accretive effect of such merger.

Because such forward-looking statements are subject to assumptions, risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on such statements, which speak only as of the date of this prospectus or the date of any document incorporated by reference.

All subsequent written and oral forward-looking statements attributable to MichCon or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.

The factors discussed above and other factors are discussed more completely in our public filings with the SEC, including our annual report on Form 10-K for the year ended December 31, 2000.

MICHIGAN CONSOLIDATED GAS COMPANY

MichCon is a Michigan corporation organized in 1898 and, with its predecessors, has been in business for more than 150 years. MichCon, an indirect, wholly-owned subsidiary of DTE Energy Company, which we refer to as DTE, is a natural gas utility primarily engaged in the distribution and transmission of natural gas in the State of Michigan. MichCon also has subsidiaries involved in the gathering and transmission of natural gas in northern Michigan. MichCon operates one of the largest natural gas distribution and transmission systems in the United States. MichCon’s non-regulated operations are not significant. MichCon serves approximately 1.2 million residential, commercial and industrial customers in the Detroit, Grand Rapids, Ann Arbor, Traverse City, Marquette and Muskegon metropolitan areas and in various other communities throughout Michigan.

MichCon became an indirect, wholly-owned subsidiary of DTE on May 31, 2001, when MichCon’s parent company, MCN Energy Group Inc., was merged into DTE Enterprises, Inc., a wholly-owned subsidiary of DTE. DTE and DTE Enterprises, Inc. are exempt holding companies under the Public Utility Holding Company Act of 1935.

The mailing address of MichCon’s principal executive office is 500 Griswold Street, Detroit, Michigan 48226, and its telephone number is (313) 965-2430.

USE OF PROCEEDS

Except as we may otherwise state in the applicable prospectus supplement, we expect to use the net proceeds from the sale of the senior debt securities offered hereby for:

• the acquisition of property;

• the construction, completion, extension or improvement of facilities;

• working capital requirements;

• the improvement or maintenance of service;

• the discharge or lawful retirement of short or long-term debt and borrowings made or expected to be made; and

• for other corporate purposes.

Specific allocations of proceeds for such purposes have not been made at this time. Funds may be borrowed in anticipation of future requirements. Pending the application of proceeds, we may invest the funds in short-term investment grade securities.

RATIOS OF EARNINGS TO FIXED CHARGES

Our ratios of earnings to fixed charges were as follows for the periods indicated in the table below.

Twelve Months

Year Ended December 31,

Ended

March 31, 2001

2000

1999

1998

1997

1996

Ratio of earnings to fixed charges(1)(2)

4.33

3.64

3.74

2.87

3.17

3.27

(1) MichCon is a guarantor of certain other debt. Fixed charges related to such debt, deemed to be immaterial, have been excluded in computing the above ratios.

(2) For the purpose of computing these ratios, earnings consists of net income plus income taxes and fixed charges. Fixed charges consist of total interest, amortization of debt discount, premium and expense and the estimated portion of interest implicit in rentals.

SECURITIES

We may issue the senior debt securities, from time to time, in one or more series (i) secured by our first mortgage bonds issued and delivered to the senior trustee under the Twenty-Ninth Supplemental Indenture, dated as of July 15, 1989 providing for the restatement of the Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, between MichCon and Citibank, N.A., as mortgage trustee, and Robert T. Kirchner, as individual trustee, which became effective on April 1, 1994, as supplemented and amended by the supplemental indentures thereto, which we refer to collectively as the mortgage, or (ii) following the release date (as defined below), as either unsecured senior notes or as senior notes secured by first mortgage bonds issued under a mortgage bond indenture other than the mortgage. We refer to Citibank, N.A. as Citibank, and to Citibank, or any successor trustee, in its capacity as trustee under the mortgage, as the mortgage trustee. We refer to Robert T. Kirchner, or any successor, as the individual trustee, and together with the mortgage trustee, as the secured trustees. On the release date, any outstanding senior debt securities secured by our first mortgage bonds when issued will cease to be secured by first mortgage bonds issued under our mortgage and, at our option, either (a) will become unsecured general obligations of MichCon or (b) will be secured by first mortgage bonds issued under a mortgage bond indenture other than the mortgage.

We will issue senior debt securities under the senior indenture, dated as of June 1, 1998, between MichCon and Citibank, as trustee, which we refer to as the senior indenture. We refer to Citibank or any successor or additional trustee, in its capacity as trustee under the senior indenture, as the senior trustee for purposes of this prospectus. Prior to the release date, first mortgage bonds securing the senior debt securities, which we refer to as the collateral bonds, will be issued under the mortgage.

Other than as described below under “Description of the First Mortgage Bonds — Issuance of Additional First Mortgage Bonds” with respect to limitations on the issuance of first mortgage bonds, neither the mortgage nor the senior indenture limits our ability to incur indebtedness. In addition, except as described below under “Description of the Senior Debt Securities — Restrictions” neither the mortgage nor the senior indenture affords holders of debt securities protection in the event of a decline in our credit quality or if we are involved in a takeover, recapitalization or highly leveraged or similar transaction. Accordingly, we could in the future enter into transactions that could increase the amount of indebtedness outstanding at that time or otherwise affect our capital structure or credit rating. You should refer to the prospectus supplement relating to a particular series of debt securities for information regarding any deletions from, modifications of or additions to the events of default described below or covenants contained in the senior indenture, including any addition of a covenant or other provisions providing event risk or similar protection.

There is no requirement, under either the senior indenture or the mortgage, which we refer to collectively as the indentures, that future issues of debt securities of MichCon be issued under the indentures, and, subject to certain restrictions which are described in “Description of the Senior Debt Securities — Restrictions,” MichCon will be free to employ other indentures or documentation, containing provisions different from those included in the indentures or applicable to one or more issues of senior debt securities, in connection with future issues of such other debt securities. Certain capitalized terms herein are defined in the indentures.

We have filed copies of the senior indenture and the mortgage as exhibits to the registration statement of which this prospectus is a part. The summaries in this prospectus are summaries of certain provisions of the senior indenture and the mortgage and do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all provisions of the senior indenture and the mortgage, including the definition therein of certain terms. The following summaries set forth certain general terms and provisions of the debt securities to which any prospectus supplement may relate. We will describe the

particular terms of the debt securities offered by any prospectus supplement and the extent, if any, to which such general provisions may apply to the debt securities so offered in the prospectus supplement relating to those debt securities.

DESCRIPTION OF THE SENIOR DEBT SECURITIES

The following summaries of certain provisions of the senior debt securities and the senior indenture do not purport to be complete and are subject to, and are qualified in their entirety by express reference to, all the provisions of the senior indenture, including the definitions of certain terms. Certain capitalized terms in this section are defined in the senior indenture.

General

Until the release date (as defined below), the senior debt securities will be secured by one or more series of collateral bonds issued under the mortgage and delivered to the senior trustee. See “— Security; Release Date.” On the release date, the senior debt securities will cease to be secured by the collateral bonds and, at our option, either (i) will become unsecured general obligations of MichCon or (ii) will be secured by first mortgage bonds, which we refer to as substituted collateral bonds, issued under a mortgage bond indenture other than the mortgage. The senior indenture provides that, in addition to the senior debt securities offered hereby, we may issue additional senior debt securities, without limitation as to aggregate principal amount, from time to time, in one or more series, provided that, prior to the release date, the amount of senior debt securities that we may issue cannot exceed the aggregate principal amount of first mortgage bonds that we are able to issue under the mortgage.

The prospectus supplement relating to the senior debt securities being offered will include specific terms relating to the offered securities. These terms will include some or all of the following:

• the title of the senior debt securities;

• any limit on the aggregate principal amount of the senior debt securities;

• whether the senior debt securities will be issued in the form of one or more global securities and whether such global securities will be issued in a temporary global form or permanent global form;

• the date or dates on which the senior debt securities will mature;

• the rate or rates (which may be fixed or variable) per annum at which the senior debt securities will bear interest or the method by which such rate or rates shall be determined and the date from which such interest will accrue or the method by which such date or dates shall be determined;

• the place or places where the principal of (and premium, if any) and interest on the senior debt securities shall be payable;

• the dates on which interest will be payable and the regular record dates for such interest payment dates;

• the dates, if any, on which, and the price or prices at which, the senior debt securities may, pursuant to any mandatory or optional sinking fund provisions, be redeemed by MichCon and other detailed terms and provisions of such sinking funds;

• the date, if any, after which, and the price or prices at which, the senior debt securities may, pursuant to any optional redemption provisions, be redeemed at the option of MichCon or of the holder thereof and other detailed terms and provisions of such optional redemption;

• the authorized denominations of the senior debt securities, if other than denominations of $1,000 and any integral multiple thereof;

• if other than the principal amount thereof, the portion of the principal amount of the senior debt securities or any of them which shall be payable upon declaration of acceleration of the maturity thereof or the method by which such portion is to be determined;

• if other than U.S. dollars, the currency or currencies or currency unit or units of two or more currencies in which senior debt securities are denominated, for which they may be purchased, and in which principal and any premium and interest is payable;

• any modifications of or additions to the events of default or covenants with respect to the senior debt securities; and

• any other terms of the senior debt securities (which terms shall not be inconsistent with the senior indenture).

All debt securities of any one series need not be issued at the same time and all the debt securities of any one series need not bear interest at the same rate or mature on the same date.

If we sell any of the debt securities for foreign currencies or foreign currency units or if the principal of, premium, if any, or interest, if any, on any series of debt securities is payable in foreign currencies or foreign currency units, we will describe the restrictions, elections, tax consequences, specific terms and other information with respect to such issue of debt securities and such currencies or currency units in the applicable prospectus supplement.

Unless otherwise specified in the applicable prospectus supplement, principal and interest, if any, on the senior debt securities offered thereby are to be payable at the office or agency of MichCon maintained for such purposes in the city where the principal corporate trust office of the senior trustee is located, and will initially be the principal corporate trust office of the senior trustee, provided that payment of interest, if any, may be made (subject to collection) at the option of MichCon by check mailed to the persons in whose names the senior debt securities are registered at the close of business on the day specified in the prospectus supplement accompanying this prospectus.

Unless otherwise indicated in the related prospectus supplement, we will issue the senior debt securities in United States dollars in fully registered form, without coupons, in denominations of $1,000 or any integral multiple thereof. No service charge will be made for any transfer or exchange of the senior debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

We may sell senior debt securities at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which at the time of issuance is below market rates. We may describe the Federal income tax consequences and special considerations applicable to any series in the applicable prospectus supplement.

Security; Release Date

Until the release date, the senior debt securities will be secured by one or more series of the collateral bonds issued and delivered by MichCon to the senior trustee. See “Description of the First Mortgage Bonds.” Upon the issuance of senior debt securities prior to the release date, we will simultaneously issue and deliver collateral bonds to the senior trustee, as security for such senior debt securities. Such collateral bonds will have the same stated rate or rates of interest (or interest calculated in the same manner), interest payment dates, stated maturity date and redemption provisions, and will be in the same aggregate principal amount as the senior debt securities being issued. We have agreed to issue a related series of collateral bonds in the name of the senior trustee in its capacity as trustee under the senior indenture concurrently with the issuance of each series of senior debt securities and the senior trustee has agreed to hold each series of collateral bonds in such capacity under all circumstances and not transfer such collateral bonds until the earlier of the release date or the prior retirement of the related series of senior debt securities through redemption, repurchase or otherwise. Prior to the release date, we shall make payments of the principal of, and premium or interest on, each series of collateral bonds to the senior

trustee, which payments shall be applied by the senior trustee to satisfaction of all obligations then due on the related series of senior debt securities.

The “release date” will be the date that all first mortgage bonds of MichCon issued and outstanding under the mortgage, other than the collateral bonds, have been retired (at, before or after the maturity thereof) through payment, redemption or otherwise. On the release date, the senior trustee will deliver to MichCon for cancellation all collateral bonds, and MichCon will cause the senior trustee to provide notice to all holders of senior debt securities of the occurrence of the release date. As a result, on the release date, the collateral bonds will cease to secure the senior debt securities, and, at the option of MichCon, the senior debt securities, either (i) will become unsecured general obligations of MichCon or (ii) will be secured by substituted collateral bonds.

Each issue of collateral bonds will be secured by a lien on certain property owned by MichCon. In certain circumstances prior to the release date, MichCon is permitted to reduce the aggregate principal amount of an issue of collateral bonds held by the senior trustee, but in no event to an amount lower than the aggregate outstanding principal amount of the senior debt securities initially issued contemporaneously with such collateral bonds. Following the release date, we will terminate the mortgage, and we will not issue any additional bonds under the mortgage.

Certain Definitions

For purposes of the descriptions of the senior debt securities, certain defined terms have the following meanings:

“Indebtedness” of any person means:

      (i) the principal of and premium (if any) in respect of indebtedness of such person for money borrowed and indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such person is responsible or liable;

      (ii) all Capitalized Lease Obligations of such person;

      (iii) all obligations of such person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);

      (iv) all obligations of such person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in (i) through (iii) above) entered into in the ordinary course of business of such person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third business day following receipt by such person of a demand for reimbursement following payment on the letter of credit);

      (v) all obligations of the type referred to in clauses (i) through (iv) of other persons and all dividends of other persons for the payment of which, in either case, such person is responsible or liable as obligor, guarantor or otherwise; and

      (vi) all obligations of the type referred to in clauses (i) through (v) of other persons secured by any Lien on any property or asset of such person (whether or not such obligation is assumed by such person), the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured.

“Significant Subsidiary” means a subsidiary or subsidiaries of MichCon possessing assets (including the assets of its own subsidiaries but without regard to MichCon or any other subsidiary) having a book value, in the aggregate, equal to not less than 10% of the book value of the aggregate assets of MichCon and its subsidiaries calculated on a consolidated basis.

“Capitalized Lease Obligations” means an obligation under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with such principles.

“Project Finance Indebtedness” means Indebtedness of a subsidiary secured by a Lien on any property acquired, constructed or improved by such subsidiary after the date of the Indenture which Lien is created or assumed contemporaneously with, or within 120 days after, such acquisition or completion of such construction or improvement, or within six months thereafter pursuant to a firm commitment for financing arranged with a lender or investor within such 120-day period, to secure or provide for the payment of all or any part of the purchase price of such property or the cost of such construction or improvement, or on any property existing at the time of acquisition thereof; provided that such a Lien shall not apply to any property theretofore owned by any such subsidiary other than, in the case of any such construction or improvement, any theretofore unimproved real property on which the property so constructed or the improvement is located; and provided further that such Indebtedness, by its terms, shall limit the recourse of any holder of such Indebtedness (or trustee on such holder’s behalf) in the event of any default in such Indebtedness to the assets subject to such Liens and the capital stock of the subsidiary issuing such Indebtedness. Notwithstanding the foregoing, Project Finance Indebtedness shall include all indebtedness that would constitute Project Finance Indebtedness but for the fact that such Indebtedness was issued prior to the date of the senior indenture and taking into account the fact that the property subject to the Lien may have been acquired prior to the date of the senior indenture.

Restrictions

The senior indenture provides that MichCon shall not consolidate with, merge with or into any other corporation (whether or not MichCon shall be the surviving corporation), or sell, assign, transfer or lease all or substantially all of its properties and assets as an entirety or substantially as an entirety to any person or group of affiliated persons, in one transaction or a series of related transactions, unless:

• either MichCon shall be the continuing person or the person (if other than MichCon) formed by such consolidation or with which or into which MichCon is merged or the person (or group of affiliated persons) to which all or substantially all the properties and assets of MichCon are sold, assigned, transferred or leased is a corporation (or constitute corporations) organized under the laws of the United States or any State thereof or the District of Columbia and expressly assumes, by an indenture supplemental to the senior indenture, all the obligations of MichCon under the senior debt securities and the senior indenture, executed and delivered to the senior trustee in form satisfactory to the senior trustee;

• immediately before and after giving effect to such transaction or series of transactions, no event of default, and no default, with respect to the senior debt securities shall have occurred and be continuing; and

• MichCon shall have delivered to the senior trustee an officer’s certificate and an opinion of counsel, each stating that such consolidation, merger or transfer and such supplemental indentures comply with the senior indenture.

The senior indenture also provides that, except as described below, we will not, nor will we permit any Significant Subsidiary to, create, incur or suffer to exist any Lien in, of or on the property of MichCon or any of its subsidiaries; except that this restriction shall not apply to:

• Liens for taxes, assessments or governmental charges or levies on its property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings;

• Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than 60 days past due or which are being contested in good faith by appropriate proceedings;

• Liens arising out of pledges or deposits under worker’s compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation;

• utility easements, rights of way, exceptions, agreements for the joint or common use of property, restrictions and such other encumbrances or charges against property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of MichCon or its subsidiaries;

• Liens on the capital stock, partnership interest, or other evidence of ownership of any subsidiary or such subsidiary’s assets that secure project financing for such subsidiary;

• purchase money liens upon or in property now owned or hereafter acquired in the ordinary course of business (consistent with MichCon’s business practices) to secure the purchase price of such property or Indebtedness incurred solely for the purpose of financing the acquisition, construction, or improvement of any such property to be subject to such liens, or Liens existing on any such property at the time of acquisition, or extensions, renewals, or replacements of any of the foregoing for the same or a lesser amount, provided that no such lien shall extend to or cover any property other than the property being acquired, constructed, or improved and replacements, modifications, and proceeds of such property, and no such extension, renewal, or replacement shall extend to or cover any property not theretofore subject to the Lien being extended, renewed, or replaced;

• Liens existing on the date the senior debt securities are first issued;

• Liens for no more than 90 days arising from a transaction involving accounts receivable of MichCon (including the sale of such accounts receivable), where such accounts receivable arose in the ordinary course of MichCon’s business;

• the right reserved to, or vested in, any municipality or public authority by the terms of any franchise, grant, license or permit, or by any provision of law, to terminate such franchise, grant, license or permit or to purchase or appropriate or recapture or to designate a purchaser of any of the mortgaged property, or to demand and collect from MichCon any tax or other compensation for the use of streets, alleys or other public places;

• rights reserved to, or vested in, any municipality or public authority to use, control, remove or regulate any property of MichCon;

• zoning laws and ordinances;

• possible adverse rights or interests and inconsequential defects or irregularities in title which, in the opinion of counsel, may be properly disregarded; and

• rights reserved to or vested in others to take or receive any part of the gas, power, oil or other minerals or timber generated, developed, manufactured or produced by, or grown on, or acquired with, any property of MichCon.

We may provide with respect to one or more series of senior debt securities, as set forth in the applicable prospectus supplement and supplemental indenture, that the restriction on Liens will only apply to those series from and after the release date (so long as no substituted collateral bonds are issued to secure the senior debt securities from and after the release date) and that the restriction will not apply to the extent that we effectively secure the applicable senior debt securities equally and ratably with the Indebtedness secured by the Lien.

The senior indenture provides that we will not, nor will we permit any subsidiary to, enter into any arrangement with any lender or investor (other than MichCon or a subsidiary), or to which such lender or

investor (other than MichCon or a subsidiary) is a party, providing for the leasing by MichCon or such subsidiary for a period, including renewals, in excess of three years of any real property located within the United States which has been owned by MichCon or such subsidiary for more than six months and which has been or is to be sold or transferred by MichCon or such subsidiary to such lender or investor or to any person to whom funds have been or are to be advanced by such lender or investor on the security of such real property unless either:

• MichCon or such subsidiary could create Indebtedness secured by a lien consistent with the restrictions set forth in the foregoing paragraph on the real property to be leased in an amount equal to the value of such transaction without equally and ratably securing the senior debt securities; or

• MichCon, within six months after the sale or transfer shall have been made, applies an amount equal to the greater of (i) the net proceeds of the sale of the real property leased pursuant to such arrangement or (ii) the fair market value of the real property so leased to the retirement of the senior debt securities and other obligations of MichCon ranking on a parity with the senior debt securities.

We may provide with respect to one or more series of senior debt securities, as set forth in the applicable prospectus supplement and supplemental indenture, that the restriction on sale-leaseback transactions will only apply to those series from and after the release date (so long as no substituted collateral bonds are issued to secure the senior debt securities from and after the release date).

Events of Default and Notice Thereof

The following are events of default under the senior indenture with respect to the senior debt securities of any series:

• failure to pay interest on any senior debt security of that series when due, continued for 30 days;

• failure to pay the principal of (or premium, if any, on) any senior debt security of that series when due and payable at maturity, upon redemption or otherwise;

• failure to observe or perform any other covenant, warranty or agreement contained in the senior debt securities of that series or in the senior indenture (other than a covenant, agreement or warranty included in the senior indenture solely for the benefit of senior debt securities other than that series), continued for a period to 60 days after notice has been given to MichCon by the senior trustee or holders of at least 25% in aggregate principal amount of the outstanding senior debt securities of that series;

• failure to pay at final maturity, or acceleration of, Indebtedness, excluding Project Finance Indebtedness, of MichCon having an aggregate principal amount of more than 1% of MichCon’s consolidated total assets (determined as of its most recent fiscal year-end), unless cured within 10 days after notice has been given to MichCon by the senior trustee or holders of at least 10% in aggregate principal amount of the outstanding senior debt securities of that series;

• prior to the release date, the occurrence of a default under the mortgage, of which default the mortgage trustee or the holders of a majority in aggregate principal amount of the outstanding senior debt securities have given written notice to the mortgage trustee;

• if any substituted collateral bonds are outstanding, the occurrence of a default under the substituted mortgage, of which default the trustee under such substituted mortgage or the holders of a majority in aggregate principal amount of the outstanding senior debt securities have given written notice to the senior trustee;

• certain events of bankruptcy, insolvency or reorganization relating to MichCon; and

• any other event of default with respect to the senior debt securities of that series specified in the applicable prospectus supplement or supplemental indenture under which that series of senior debt securities is issued.

The senior indenture provides that the senior trustee shall, within 30 days after the occurrence of any default or event of default with respect to senior debt securities of any series, give the holders of senior debt securities of that series notice of all uncured defaults or events of default known to it (the term “default” includes any event which after notice or passage of time or both would be an event of default); provided, however, that, except in the case of an event of default or a default in payment on any senior debt securities of any series, the senior trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or directors or responsible officers of the senior trustee in good faith determine that the withholding of such notice is in the interest of the holders of senior debt securities of that series.

If an event of default with respect to senior debt securities of any series (other than due to events of bankruptcy, insolvency or reorganization) occurs and is continuing, the senior trustee or the holders of at least 25% in aggregate principal amount of the outstanding senior debt securities of that series, by notice in writing to MichCon (and to the senior trustee if given by the holders of at least 25% in aggregate principal amount of the senior debt securities of that series), may declare the unpaid principal of and accrued interest to the date of acceleration on all the outstanding senior debt securities of that series to be due and payable immediately and, upon any such declaration, the senior debt securities of that series shall become immediately due and payable.

If an event of default occurs due to bankruptcy, insolvency or reorganization, all unpaid principal of and accrued interest on the outstanding senior debt securities of any series will become immediately due and payable without any declaration or other act on the part of the senior trustee or any holder of any senior debt security of that series. Upon any acceleration of the senior debt securities prior to the release date, the senior trustee is empowered to cause the mandatory redemption of the collateral bonds or substituted collateral bonds, as the case may be.

The holders of a majority of the principal amount of the outstanding senior debt securities of any series may annul any such declaration with respect to senior debt securities of that series and waive past events of default and defaults (except, unless previously cured, an event of default or a default in payment of principal of or interest on the senior debt securities of that series) upon the conditions provided in the senior indenture. For purposes of these provisions, we may cure an event of default or default in payment of principal or interest on the senior debt securities at any time after an acceleration of the senior debt securities has been declared, but before a judgment or decree for the immediate payment of the principal amount of the senior debt securities has been obtained, and, prior to the release date, so long as all first mortgage bonds have not been accelerated, if we pay or deposit with the senior trustee a sum sufficient to pay all matured installments of interest, the principal and any premium which has become due otherwise than by acceleration and any other amounts due the senior trustee, and all defaults shall have been cured or waived, then such payment or deposit will cause an automatic rescission and annulment of the acceleration of the senior debt securities.

The senior indenture provides that we shall periodically file statements with the senior trustee regarding compliance with applicable covenants and shall specify any event of default or defaults with respect to senior debt securities of any series, in performing such covenants, of which the signers may have knowledge.

Modification of the Senior Indenture; Waiver

We and the senior trustee may modify the senior indenture without the consent of any holders with respect to certain matters, including (i) to cure any ambiguity, defect or inconsistency or to correct or supplement any provision which may be inconsistent with any other provision of the senior indenture and (ii) to make any change that does not materially adversely affect the interests of any holder of senior debt

securities of any series. In addition, under the senior indenture, we and the senior trustee may modify certain rights and obligations of MichCon and the rights of holders of the senior debt securities may be modified by MichCon and the senior trustee with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding senior debt securities of each series affected thereby; but no extension of the maturity of any senior debt securities of any series, reduction in the interest rate or extension of the time for payment of interest, change in the optional redemption or repurchase provisions in a manner adverse to any holder of senior debt securities of any series, modification that would adversely impair the interest of the senior trustee in the collateral bonds held by it or, prior to the release date, reduce the principal amount of any issue of collateral bonds securing the senior debt securities to an amount less than the principal amount of the related issue of senior debt securities or alter the payment provisions of such collateral bonds in a manner adverse to the holders of the senior debt securities, other modification in the terms of payment of the principal of, or interest on, any senior debt securities of any series, or reduction of the percentage required for modification, will be effective against any holder of any outstanding senior debt security of any series affected thereby without the holder’s consent. The senior indenture does not limit the aggregate amount of senior debt securities of MichCon that we may issue.

The holders of a majority in aggregate principal amount of the outstanding senior debt securities of any series may on behalf of the holders of all senior debt securities of that series waive, insofar as that series is concerned, compliance by MichCon with certain restrictive covenants of the senior indenture. The holders of not less than a majority in aggregate principal amount of the outstanding senior debt securities of any series may on behalf of the holders of all senior debt securities of that series waive any past event of default or default under the senior indenture with respect to that series, except an event of default or a default in the payment of the principal of, or premium, if any, or any interest on any senior debt security of that series or in respect of a provision which under the senior indenture cannot be modified or amended without the consent of the holder of each outstanding senior debt security of that series affected.

Defeasance

We may terminate our substantive obligations in respect of the senior debt securities of any series (except for our obligations to pay the principal of (and premium, if any, on) and the interest on the senior debt securities of that series) by:

• depositing with the senior trustee, under the terms of an irrevocable trust agreement, money or U.S. government obligations or a combination of money and U.S. government obligations sufficient to pay all remaining indebtedness on the senior debt securities of that series,

• delivering to the senior trustee either an opinion of counsel or a ruling directed to the senior trustee the Internal Revenue Service to the effect that the holders of the senior debt securities of that series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and termination of obligations, and

• complying with certain other requirements set forth in the senior indenture.

Voting of Collateral Bonds Held by Senior Trustee

The senior trustee, as holder of collateral bonds, will attend any meeting of holders of first mortgage bonds under the mortgage indenture, as to which it receives due notice, or, at its option, will deliver its proxy in connection therewith. Either at such meeting, or otherwise where the consent of holders of first mortgage bonds is sought without a meeting, the senior trustee will vote all of the collateral bonds held by it, or will consent or withhold consent with respect thereto, as directed by the holders of a majority in aggregate principal amount of the outstanding senior debt securities; provided, however, that the senior trustee shall not be required to vote the collateral bonds of any particular issue in favor of, or give consent to, any action except upon notification by the senior trustee to the holders of the related issue of senior debt securities of such proposal and consent thereto of the holders of a majority in principal amount of the outstanding senior debt securities of such issue.

Concerning the Senior Trustee

Citibank is the senior trustee under the senior indenture. Citibank is also trustee under the mortgage indenture and a depositary of funds of MichCon. See “Description of the First Mortgage Bonds — Concerning the Secured Trustees.” Citibank and its affiliates also act as a lender or provide other banking or investment banking and other financial services to MichCon and its affiliates. The Trust Indenture Act contains limitations on the rights of the senior trustee, should it become a creditor of MichCon, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claims, as security or otherwise. The senior trustee is permitted to engage in other transactions with MichCon and its subsidiaries from time to time, provided that if the senior trustee acquires any conflicting interest it must eliminate such conflict upon the occurrence of an event of default under the senior indenture, or else resign.

Book-Entry Securities

Unless we otherwise specify in the applicable prospectus supplement, we will issue to investors securities in the form of one or more book-entry certificates registered in the name of a depository or a nominee of a depository. Unless we otherwise specify in the applicable prospectus supplement, the depository will be The Depository Trust Company, also referred to as DTC. We have been informed by DTC that its nominee will be Cede & Co. Accordingly, we expect Cede to be the initial registered holder of all securities that are issued in book-entry form.

No person that acquires a beneficial interest in securities issued in book-entry form will be entitled to receive a certificate representing those securities, except as set forth in this prospectus or in the applicable prospectus supplement. Unless and until definitive securities are issued under the limited circumstances described below, all references to actions by holders or beneficial owners of securities issued in book-entry form will refer to actions taken by DTC upon instructions from its participants, and all references to payments and notices to holders or beneficial owners will refer to payments and notices to DTC or Cede, as the registered holder of such securities.

Upon the issuance of such book-entry security, DTC or its nominee will credit the accounts of persons held with it with the respective principal or face amounts of the debt securities represented by such book-entry security. Ownership of beneficial interests in such book-entry security will be limited to persons that have accounts with DTC (“participants”) or persons that may hold interests through participants. Ownership of beneficial interests by participants in such book-entry security will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC. Ownership of beneficial interests in such book-entry security by persons that hold through participants will be shown on, and the transfer of that ownership interest within such participant will be effected only through, records maintained by such participant. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to acquire or transfer beneficial interests in such book-entry security.

We will make payment of principal of and interest on the debt securities to DTC or its nominee, as the case may be, as the sole registered owner and holder of the book-entry security for all purposes under the indenture.

MichCon has been advised by DTC that upon receipt of any payment of principal of or interest on any book-entry security, DTC will immediately credit, on its book-entry registration and transfer system, the accounts of participants with payments in amounts proportionate to their respective beneficial interests in the principal or face amount of such book-entry security as shown on the records of DTC. Payments by participants to owners of beneficial interests in such book-entry security held through such participants will be governed by standing instructions and customary practices as is now the case with securities held for customer accounts registered in “street name” and will be the sole responsibility of such participants.

So long as DTC, or its nominee, is the registered owner of a book-entry security, or such nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by such

book-entry security for the purposes of receiving payment on such debt securities, receiving notices and for all other purposes under the indenture and such debt securities. Beneficial interests in any series of debt securities will be evidenced only by, and transfer thereof will be effected only through, records maintained by DTC and its participants. Except as provided herein, owners of beneficial interests in any book-entry security will not be entitled to and will not be considered the holders thereof for any purposes under the indenture. Accordingly, each person owning a beneficial interest in such book-entry security must rely on the procedures of DTC, and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the indenture.

DTC has informed us that it is:

• a limited-purpose trust company organized under New York banking laws;

• a “banking organization” within the meaning of the New York banking laws;

• a member of the Federal Reserve System;

• a “clearing corporation” within the meaning of the New York Uniform Commercial Code; and

• a “clearing agency” registered under the Securities Exchange Act.

DTC has also informed us that it was created to:

• hold securities for “participants”; and

• facilitate the computerized settlement of securities transactions among participants through computerized electronic book-entry changes in participants’ accounts, thereby eliminating the need for the physical movement of securities certificates.

Participants have accounts with DTC and include securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to the DTC system also is available to indirect participants such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.

Persons that are not participants or indirect participants but desire to buy, sell or otherwise transfer ownership of or interests in securities may do so only through participants and indirect participants. Under the book-entry system, beneficial owners may experience some delay in receiving payments, as payments will be forwarded by our agent to Cede, as nominee for DTC. DTC will forward these payments to its participants, which thereafter will forward them to indirect participants or beneficial owners. Beneficial owners will not be recognized by the applicable registrar, transfer agent or trustee as registered holders of the securities entitled to the benefits of the certificate or the indenture. Beneficial owners that are not participants will be permitted to exercise their rights as an owner only indirectly through participants and, if applicable, indirect participants.

Because DTC can act only on behalf of participants, who in turn act only on behalf of other participants or indirect participants, and on behalf of certain banks, trust companies and other persons approved by it, the ability of a beneficial owner of securities issued in book-entry form to pledge those securities to persons or entities that do not participate in the DTC system may be limited due to the unavailability of physical certificates for the securities.

DTC has advised us that it will take any action permitted to be taken by a registered holder of any securities under the certificate, the indenture or any deposit agreement only at the direction of one or more participants to whose accounts with DTC the securities are credited. Under its usual procedures, DTC mails an omnibus proxy to MichCon as soon as possible after the applicable record date. The omnibus proxy assigns Cede & Co.’s (DTC’s partnership nominee) consenting or voting rights to those participants to whose accounts the debt securities of a series are credited on the applicable record date (identified in a listing attached to the omnibus proxy).

According to DTC, the information with respect to DTC has been provided to its participants and other members of the financial community for informational purposes only and is not intended to serve as a representation, warranty, or contract modification of any kind.

Unless otherwise specified in the applicable prospectus supplement, a book-entry security will be exchangeable for definitive securities registered in the names of the persons other than DTC or its nominee only if:

• DTC notifies us that it is unwilling or unable to continue as depository for the book-entry security or DTC ceases to be a clearing agency registered under the Securities Exchange Act at a time when DTC is required to be so registered; or

• we execute and deliver to the senior trustee an order complying with the requirements of the senior indenture that the book-entry security will be so exchangeable; or

• an event of default has occurred and is continuing.

Any book-entry security that is exchangeable in accordance with the preceding sentence will be exchangeable for securities registered in such names as DTC directs.

If one of the events described in the immediately preceding paragraph occurs, DTC is generally required to notify all participants of the availability through DTC of definitive securities. Upon surrender by DTC of the book-entry security representing the securities and delivery of instructions for re-registration, the senior trustee will reissue the securities as definitive securities. After reissuance of the securities, such persons will recognize the beneficial owners of such definitive securities as registered holders of securities.

Except as described above:

• a book-entry security may not be transferred except as a whole book-entry security by or among DTC, a nominee of DTC and/or a successor depository appointed by us; and

• DTC may not sell, assign or otherwise transfer any beneficial interest in a book-entry security unless the beneficial interest is in an amount equal to an authorized denomination for the securities evidenced by the book-entry security.

None of MichCon, the trustees or any agent of any of them, will have any responsibility or liability for any aspect of DTC’s or any participant’s records relating to, or for payments made on account of, beneficial interests in a book-entry security.

DESCRIPTION OF THE FIRST MORTGAGE BONDS

The following summaries of certain provisions of the first mortgage bonds and the mortgage do not purport to be complete and are subject to, and are qualified in their entirety by express reference to, all the provisions of the mortgage, including the definitions of certain terms. Certain capitalized terms in this section are defined in the mortgage.

General

Prior to the release date, we will issue any series of first mortgage bonds issued as collateral bonds to the senior trustee. Each issue of such collateral bonds to the senior trustee will be in a principal amount equal to the principal amount of the senior debt securities issued contemporaneously with such collateral bonds. Prior to the release date, we shall make payments of the principal of, and premium or interest on, each series of collateral bonds to the senior trustee, which payments shall be applied by the senior trustee to the satisfaction of all obligations then due on the related series of senior debt securities. The collateral bonds will be exchangeable for a like aggregate principal amount of collateral bonds of the same series of other authorized denominations at the office of the secured trustees in New York, New York.

Security and Priority

The mortgage constitutes a first mortgage lien (subject to exceptions and reservations set forth therein, to “permissible encumbrances,” and to various matters specified under “Business; Franchises” and “Properties” in MichCon’s Form 10-K) upon substantially all of the fixed property and franchises of MichCon, consisting principally of gas distribution and transmission lines and systems, underground storage fields and buildings, including property of the character initially mortgaged which has been or may be acquired by MichCon subsequent to the execution and delivery of the mortgage. It prohibits creation of prior liens upon the mortgaged property, other than “permissible encumbrances,” but, within specified limitations in certain cases, property may be acquired subject to preexisting liens or purchase money and other liens created at the time or in connection with the acquisition of such property. The property excepted from the lien of the mortgage indenture consists principally of cash (unless deposited with the mortgage trustee under the mortgage indenture), accounts receivable, gas stored in reservoirs except to the extent specially pledged, materials and supplies, securities, vehicles and leases.

The first mortgage bonds will rank equally and ratably (except as to sinking fund and other analogous funds established for the exclusive benefit of a particular series) with all first mortgage bonds, regardless of series, from time to time issued and outstanding under the mortgage.

Release of Property

Unless an event of default shall have occurred and be continuing, MichCon is entitled to possess, use and enjoy all the property and appurtenances, franchise and rights conveyed by the mortgage. Subject to various limitations and requirements, MichCon may obtain a release of any part of the mortgaged property, except prior lien bonds, upon receipt by the mortgage trustee of cash, as adjusted, equal to the consideration, if any, received or to be received from the sale, surrender or other disposition of the property to be released or the then fair value thereof (whichever shall be greater).

Issuance of Additional First Mortgage Bonds

We may issue additional first mortgage bonds under the mortgage in principal amounts (unlimited except as provided by law) equal to:

      (1) 70% of the cost or fair value to MichCon, whichever is less, of unbonded net property additions made after December 31, 1943 (subject to deductions in certain cases, if such net property additions secure prior lien bonds);

      (2) the sum of the principal amount of first mortgage bonds previously issued under the mortgage indenture, and of prior lien bonds theretofore deducted under the mortgage, which have been retired or are then being retired and have not theretofore been bonded; and

      (3) the amount of cash deposited with the mortgage trustee for such purpose.

We may issue first mortgage bonds on the basis of net property additions which include substantially all utility property subject to the mortgage or deposit of cash only if net earnings available for interest and depreciation (before deduction for income taxes) for any specified 12 consecutive calendar months within the preceding 15 months equal 2 1/2 times annual interest charges on the first mortgage bonds and any prior lien bonds. Such earnings requirement need not be met where first mortgage bonds are to be issued against first mortgage bonds or prior lien bonds which have been or are being retired as described in (2) above if the first mortgage bonds to be issued bear interest at a lower rate than the first mortgage bonds or prior lien bonds which have been or are to be retired, or if the proceeds from the first mortgage bonds to be issued are used to refund first mortgage bonds or prior lien bonds which have been retired within two years prior to such issuance unless additional first mortgage bonds requiring an earnings certificate have been issued in the period between the retirement of the retired first mortgage bonds and the issuance of the first mortgage bonds.

As of March 31, 2001, MichCon had approximately $1.374 billion of unbonded net property additions, which would entitle it to issue approximately $962 million principal amount of additional first mortgage bonds on the basis of unbonded net property additions.

Withdrawal of Certain Cash

Cash deposited with the mortgage trustee as a basis for the issuance of additional first mortgage bonds may be withdrawn by MichCon in amounts described above under “Issuance of Additional First Mortgage Bonds”.

Defeasance

We may require the discharge of the mortgage or treat a series of first mortgage bonds as no longer outstanding thereunder if:

• we deposit with the mortgage trustee monies or certain obligations of the United States of America or certain securities which are guaranteed by, or backed by obligations of, the United States of America, in an amount sufficient to pay, when due, the principal, premium if any, and any interest due and to become due; and

• we deliver an opinion of counsel to the effect that registration is not required under the Investment Company Act of 1940, as amended, applicable laws are not violated, and such discharge will not result in a taxable event with respect to the first mortgage bonds the payment of which is being provided for.

In such event, the obligation of MichCon duly and punctually to pay and cause to be paid the principal, premium, if any, and interest in respect of such first mortgage bonds shall be completely discharged. Thereafter, the holders of such first mortgage bonds shall be entitled to payment only out of funds on deposit with the mortgage trustee as stated above for their payment.

Modification of Mortgage

In general, modifications or alterations of the mortgage and of the rights or obligations of MichCon and of the holders of first mortgage bonds, as well as waivers of compliance with the mortgage, may be made with the consent of holders of 60% of the first mortgage bonds, or, if less than all series of the first mortgage bonds are adversely affected, the consent of the holders of 60% of the first mortgage bonds adversely affected. No such modification, alteration or waiver may be made which will

• permit the extension of the time or times of payment of the principal of, or the interest or the premium (if any) on, any first mortgage bond, or a reduction in the rate of interest thereon, or otherwise affect the terms of payment of the principal of, or the interest or the premium (if any) on, any first mortgage bond, or affect the right of any holder of first mortgage bonds to institute suit for the enforcement of any such payment on or after the due date thereof,

• otherwise than as permitted by the mortgage, permit the creation of any lien ranking prior or equal to the lien of the mortgage with respect to any of the mortgaged properties, or

• permit the reduction of the percentage of first mortgage bonds required for the making of any such modification, alteration or waiver.

Concerning the Secured Trustees

Citibank is the mortgage trustee under the mortgage. Citibank has acted as paying agent on the outstanding first mortgage bonds and will act in the same capacity with respect to any additional first mortgage bonds issued under the mortgage indenture. It is also a depositary of funds of MichCon. Robert T. Kirchner, individual trustee under the mortgage, is an officer of Citibank. Citibank also serves as trustee for the senior debt securities. Citibank and its affiliates also act as a lender or provide other banking or investment banking and other financial services to MichCon and its affiliates. The Trust

Indenture Act contains limitations on the rights of the secured trustees, should they become creditors of MichCon, to obtain payment of claims in certain cases or to realize on certain property received by them in respect of any such claims, as security or otherwise. The secured trustees are permitted to engage in other transactions with MichCon and its subsidiaries from time to time, provided that if the secured trustees acquire any conflicting interests they must eliminate such conflicts upon the occurrence of an event of default under the mortgage, or else resign.

Default and Notice Thereof to Holders of First Mortgage Bonds

The mortgage provides that, in case of an event of default as defined therein, the mortgage trustee or the holders of not less than 25% in principal amount of the first mortgage bonds may declare the principal and all accrued and unpaid interest of all first mortgage bonds, if not already due, to be immediately due and payable. The mortgage trustee, upon request of the holders of a majority in principal amount of the outstanding first mortgage bonds, shall waive such default and rescind any such declaration if such default is cured. The holders of a majority in principal amount of the first mortgage bonds shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the secured trustees and of exercising any power or trust conferred upon the secured trustees, but under certain circumstances, the secured trustees may decline to follow such directions or to exercise certain of their powers.

Holders of first mortgage bonds have no right to enforce any remedy under the mortgage unless the secured trustees have first had a reasonable opportunity to do so following notice of default to the mortgage trustee and request by the holders of 25% in principal amount of the first mortgage bonds for action by the secured trustees with offer of indemnity satisfactory to the secured trustees against cost, expenses and liabilities that may be incurred thereby, but this provision does not impair the absolute right of any holder of first mortgage bonds to enforce payment of the principal of and interest on the holder’s first mortgage bond when due.

The mortgage provides that the following shall constitute events of default:

• failure to pay any installment of interest on any first mortgage bond when due and payable, and continuance of such failure for 60 days;

• failure to pay the principal of any first mortgage bond when due and payable, whether at maturity, in connection with any sinking fund payment, or otherwise;

• failure to pay any installment of interest on any prior lien bonds, and continuance of such failure for the period of grace, if any, specified in the prior lien securing such bonds;

• failure to pay any installment applied to the purchase or redemption of any first mortgage bond, and continuance of such failure for 60 days; failure to pay the principal of any prior lien bond when due and payable, whether at maturity or otherwise;

• failure on the part of MichCon to perform or observe any other covenant, agreement or condition contained in the mortgage indenture or in the first mortgage bonds or any prior lien bonds, continuance of such failure for 90 days after written notice to MichCon by the mortgage trustee or by the holders of not less than 25% in principal amount of the first mortgage bonds; and

• insolvency or bankruptcy, receivership or similar proceedings initiated by MichCon, or initiated against MichCon and not dismissed or stayed within 45 days; and

• failure to renew or extend MichCon’s corporate charter upon or prior to the expiration of such under the provision of its articles of incorporation or of law.

The mortgage provides that the secured trustees shall give to the holders of first mortgage bonds notice of the happening of a default known to them within 90 days after the occurrence thereof (disregarding any period of grace in the defaults referred to above) unless such default shall have been cured, but except in case of default in the payment of principal, premium, if any, or interest on the first

mortgage bonds or in the payment of any sinking fund installment, the secured trustees may withhold such notice if and so long as the board of directors, the executive committee or a trust committee of directors or responsible officers of the mortgage trustee in good faith determine that the withholding of such notice is in the interest of the holders of first mortgage bonds.

PLAN OF DISTRIBUTION

MichCon may sell the senior debt securities through agents, underwriters or dealers, or directly to one or more purchasers without using underwriters or agents.

MichCon may designate agents who agree to use their reasonable efforts to solicit purchases for the period of their appointment or to sell senior debt securities on a continuing basis.

If MichCon uses underwriters for a sale of senior debt securities, the underwriters will acquire the senior debt securities for their own account. The underwriters may resell the senior debt securities in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the senior debt securities will be subject to the conditions set forth in the applicable underwriting agreement. The underwriters will be obligated to purchase all the senior debt securities offered if any of those senior debt securities are purchased. Any initial public offering price and any discounts or concessions allowed or re-allowed or paid to dealers will be described in the applicable prospectus supplement and may be changed from time to time.

Underwriters, dealers and agents that participate in the distribution of the senior debt securities may be underwriters as defined in the Securities Act and any discounts or commissions they receive from MichCon and any profit on their resale of the senior debt securities may be treated as underwriting discounts and commissions under the Securities Act. The applicable prospectus supplement will identify any underwriters, dealers or agents and will describe their compensation. MichCon may have agreements with the underwriters, dealers and agents to indemnify them against certain civil liabilities, including liabilities under the Securities Act. Underwriters, dealers and agents may engage in transactions with or perform services for us or our subsidiaries in the ordinary course of their businesses.

Trading Markets and Listing of Securities

Unless otherwise specified in the applicable prospectus supplement, each class or series of senior debt securities will be a new issue with no established trading market. MichCon may elect to list any class or series of debt securities on any exchange but is not obligated to do so. It is possible that one or more underwriters may make a market in a class or series of debt securities, but the underwriters will not be obligated to do so and may discontinue any market making at any time without notice. MichCon cannot give any assurance as to the liquidity of the trading market for any of the debt securities.

Stabilization Activities

Any underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the Securities Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Short-covering transactions involve purchases of the securities in the open market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.

LEGAL MATTERS

The validity of the debt securities will be passed upon for MichCon by T. A. Hughes, Associate General Counsel. In addition, other customary legal matters relating to the offering of the debt securities, including matters relating to our due incorporation, legal existence and authorized capitalization, will be passed upon for MichCon by T. A. Hughes, Associate General Counsel. Mr. Hughes beneficially owns approximately 800 shares of DTE common stock and holds options to purchase an additional 30,750 shares. Except as otherwise set forth in a prospectus supplement, the validity of the debt securities will be passed upon for any underwriters, dealers or agents by Sidley Austin Brown & Wood LLP, New York, New York. Sidley Austin Brown & Wood LLP will rely on the opinion of Mr. Hughes with respect to Michigan law.

EXPERTS

The consolidated financial statements and related financial statement schedule incorporated in this prospectus by reference from MichCon’s Annual Report on Form 10-K for the year ended December 31, 2000 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report, which is incorporated herein by reference, and have been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

With respect to the unaudited interim financial information for the periods ended March 31, 2001 and 2000 which is incorporated herein by reference, Deloitte & Touche LLP have applied limited procedures in accordance with professional standards for a review of such information. However, as stated in their report included in MichCon’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 and incorporated by reference herein, they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their reports on such information should be restricted in light of the limited nature of the review procedures applied. Deloitte & Touche LLP are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their reports on the unaudited interim financial information because those reports are not “reports” or a “part” of the registration statement prepared or certified by an accountant within the meaning of Sections 7 and 11 of the Act.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, and other information with the Securities and Exchange Commission. Our Securities and Exchange Commission filings are available to the public over the Internet at the Securities and Exchange Commission’s web site at http://www.sec.gov. You may also read and copy any document we file at the Securities and Exchange Commission’s public reference rooms located at:


•		450 Fifth Street, N.W. Washington, D.C. 20549;
•		7 World Trade Center New York, New York 10048; and
•		Citicorp Center 500 West Madison Street Chicago, Illinois 60661.

Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the public reference rooms and their copy charges.

The Securities and Exchange Commission allows us to “incorporate by reference” the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and

information that we file later with the Securities and Exchange Commission will automatically update and supersede this information. Until we sell all of the debt securities covered by this prospectus, or after the date of this initial registration statement to the date of effectiveness of this registration statement, we incorporate by reference the documents listed below and any future filings we make with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (other than information in such documents that is deemed not to be filed):

• Annual Report on Form 10-K for the year ended December 31, 2000, filed on March 15, 2001;

• Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, filed on May 14, 2001;

• Current Report on Form 8-K filed on March 22, 2001.

Each of these documents is available from the Securities and Exchange Commission’s web site and public reference rooms described above. You may also request a copy of these filings, excluding exhibits, at no cost by writing or telephoning MichCon, at our principal executive office, which is:

Michigan Consolidated Gas Company

500 Griswold Street

Detroit, Michigan 48226

(313) 235-4000

Our web site address is http://www.michcon.com. The information on our web site is not incorporated by reference into this prospectus. You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. MichCon has not authorized anyone to provide you with different information.

MichCon is not making an offer of the debt securities covered by this prospectus in any state where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement or in any other document incorporated by reference in this prospectus is accurate as of any date other than the date of those documents.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. Other Expenses of Issuance and Distribution.

The expenses in connection with the issuance and distribution of the securities being registered, other than underwriting compensation are:






SEC Registration Fee		$	90,000




Printing and Engraving			30,000




Trustee Fees			10,000




Legal Fees			150,000




Accounting Fees			25,000




Rating Agency Fees			100,000




Miscellaneous			45,000

	Total	$	450,000

ITEM 15. Indemnification of Directors and Officers.

(a) Indemnification. The By-Laws of Michigan Consolidated Gas Company and the Michigan Business Corporation Act (“MBCA”) permit MichCon’s officers and directors to be indemnified under certain circumstances for expenses and, in some instances, for judgments, fines or amounts paid in settlement of civil, criminal, administrative and investigative suits or proceedings, including those involving alleged violations of the Securities Act of 1933. In addition, MichCon has entered into indemnification agreements with its officers and directors which provide for indemnification to the maximum extent permitted by law. These agreements set forth certain procedures for the advancement by MichCon of certain expenses to indemnitees.

Section 209(c) of the MBCA permits a corporation to eliminate or limit a director’s liability to the corporation or its shareholders for money damages for any action taken or any failure to take action as a director, except liability for (1) the amount of financial benefit received by a director to which he or she is not entitled; (2) the intentional infliction of harm on the corporation or the shareholders; (3) a violation of Section 551 of the Act, dealing with unlawful distributions; or (4) for an intentional criminal act.

Sections 561 and 562 of the MBCA permit a corporation to indemnify its directors and officers against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with any action, suit or proceeding brought by third parties, if such directors or officers acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. In a derivative action, i.e., one by or in the right of the corporation, indemnification may be made for expenses actually and reasonably incurred by directors and officers in connection with the defense or settlement of an action or suit, but only with respect to a matter as to which they have acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification will be made if such person will have been found liable to the corporation, unless and only to the extent that the court in which the action or suit was brought will determine upon application that the defendant officers or directors are fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.

Section 563 of the MBCA provides that a director or officer who has been successful on the merits or otherwise in defense of an action, suit or proceeding referred to in Sections 561 and 562 shall be indemnified against actual and reasonable expenses, including attorney’s fees, incurred by him or her in connection with the action, suit or proceeding, or proceeding brought to enforce this mandatory indemnification.

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Reference is made to the underwriting agreement or agreements filed or incorporated by reference as exhibits hereto, which will provide for indemnification of controlling persons, directors and certain officers of the registrant against certain liabilities.

(b) Insurance. MichCon (with respect to indemnification liability) and its directors and officers (in their capacities as such) are insured against liability for wrongful acts (to the extent defined) under three insurance policies providing aggregate coverage for DTE and its affiliates in the amount of $100 million.

ITEM 16. List of Exhibits.


Exhibit
No.		Description

	1.1	Form of Underwriting Agreement.
	4.1	Indenture between MichCon and Citibank, N.A. related to Senior Debt Securities dated as of June 1, 1998; First Supplemental Indenture dated as of June 18, 1998 (Exhibit 4-1 to June 18, 1998 Form 8-K); and Second Supplemental Indenture dated as of June 9, 1999 (Exhibit 4-1 to June 4, 1999 Form 8-K).
	4.2	Indentures defining the rights of the holders of MichCon’s First Mortgage Bonds: MichCon’s Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 (Exhibit 7-D to Registration Statement No. 2-5252); Twenty-ninth Supplemental Indenture, dated as of July 15, 1989, providing for the modification and restatement of the Indenture of Mortgage and Deed of Trust dated as of March 1, 1944; Thirtieth Supplemental Indenture, dated as of September 1, 1991 (Exhibit 4-1 to September 27, 1991 Form 8-K); Thirty-first Supplemental Indenture, dated as of December 15, 1991 (Exhibit 4-1 to February 28, 1992 Form 8-K); Thirty-second Supplemental Indenture, dated as of January 5, 1993 (Exhibit 4-1 to 1992 Form 10-K); Thirty-third Supplemental Indenture, dated as of May 1, 1995 (Exhibit 4-2 to Registration Statement No. 33-59093); Thirty-fourth Supplemental Indenture, dated as of November 1, 1996 (Exhibit 4-2 to Registration Statement No. 333-16285); and Thirty-fifth Supplemental Indenture, dated as of June 18, 1998 (Exhibit 4-2 to June 18, 1998 Form 8-K).
	4.3	Form of Supplemental Indenture related to Senior Debt Securities (including Form of Senior Debt Securities incorporated by reference to Exhibit 4.1).
	4.4	Form of Supplemental Indenture related to Collateral Bonds (including Form of Collateral Bonds).
	5.1(a)	Opinion and Consent of Thomas A. Hughes, Esq., Associate General Counsel for MichCon, regarding validity of securities being registered.
	5.1(b)	Opinion and Consent of Sidley Austin Brown & Wood LLP, regarding certain matters related to New York law.
	10.1	Form of Indemnification Agreement between MichCon and its officers.
	10.2	Form of Indemnification Agreement between MichCon and its directors.
	12.1	Computation of Ratio of Earnings to Fixed Charges.
	15.1	Awareness letter of Deloitte & Touche LLP.

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Exhibit
No.		Description

	23.1	Independent Auditors’ Consent — Deloitte & Touche LLP.
	23.2	Consent of Thomas A. Hughes, Esq., Associate General Counsel for MichCon (included in Exhibit 5-1(a) to this registration statement).
	23.3	Consent of Sidley Austin Brown & Wood LLP (included in Exhibit 5-1(b) to this registration statement).
	24.1	Power of Attorney (appears on page II-6 of this registration statement).
	25.1	Statement of Eligibility of Citibank, N.A. (senior debt securities)
	25.2	Statement of Eligibility of Citibank, N.A. (first mortgage bonds)
	25.3	Statement of Eligibility of Robert T. Kirchner, individual trustee.

References are to MichCon (File No. 1-7310) for documents incorporated by reference.

ITEM 17. Undertakings.

1. The undersigned registrant hereby undertakes:

(a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

      (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

      (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

      (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the registration statement is on Form S-3, Form S-8, or Form F-3, and if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

(b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

2. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s

II-3

annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

3. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

4. The undersigned registrant hereby undertakes that:

(a) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(b) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Detroit, State of Michigan, on the 18th day of June, 2001.

MICHIGAN CONSOLIDATED GAS COMPANY

(Registrant)

By: /s/ ANTHONY F. EARLEY, JR.

Anthony F. Earley, Jr., Chairman of the Board

President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.


Signature	Title	Date

Principal Executive Officer:
/s/ ANTHONY F. EARLEY, JR. Anthony F. Earley, Jr.	Chairman of the Board, President and Chief Executive Officer and Director	June 18, 2001





Principal Financial Officer:
/s/ DAVID E. MEADOR David E. Meador	Senior Vice President and Chief Financial Officer	June 18, 2001





Principal Accounting Officer:
/s/ DANIEL G. BRUDZYNSKI Daniel G. Brudzynski	Vice President and Controller	June 18, 2001





Directors:
/s/ SUSAN M. BEALE Susan M. Beale	Director	June 18, 2001
/s/ ERIC H. PETERSON Eric H. Peterson	Director	June 18, 2001

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POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Thomas A. Hughes, Associate General Counsel and N.A. Khouri, Vice President and Treasurer, and each of them, the undersigned’s true and lawful attorney-in-fact and agents, with full power of substitution and resubstitution, for the undersigned and in the undersigned’s name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this registration statement, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in ratifying and confirming all the said attorneys-in-fact and agents, or any of them, or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons, in the capacities and on the dates indicated.


Signature		Title

Principal Executive Officer:
/s/ ANTHONY F. EARLEY, JR. Anthony F. Earley, Jr.		Chairman of the Board, President and Chief Executive Officer and Director





Principal Financial Officer:
/s/ DAVID E. MEADOR David E. Meador		Senior Vice President and Chief Financial Officer





Principal Accounting Officer:
/s/ DANIEL G. BRUDZYNSKI Daniel G. Brudzynski		Vice President and Controller





Directors:
/s/ SUSAN M. BEALE Susan M. Beale		Director
/s/ ERIC H. PETERSON Eric H. Peterson		Director

Dated: June 18, 2001

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EXHIBIT INDEX


Exhibit
No.			Description

	1.	1	Form of Underwriting Agreement.
	4.	1	Indenture between MichCon and Citibank, N.A. related to Senior Debt Securities dated as of June 1, 1998; First Supplemental Indenture dated as of June 18, 1998 (Exhibit 4-1 to June 18, 1998 Form 8-K); and Second Supplemental Indenture dated as of June 9, 1999 (Exhibit 4-1 to June 4, 1999 Form 8-K).
	4.	2	Indentures defining the rights of the holders of MichCon’s First Mortgage Bonds: MichCon’s Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 (Exhibit 7-D to Registration Statement No. 2-5252); Twenty-ninth Supplemental Indenture, dated as of July 15, 1989, providing for the modification and restatement of the Indenture of Mortgage and Deed of Trust dated as of March 1, 1944; Thirtieth Supplemental Indenture, dated as of September 1, 1991 (Exhibit 4-1 to September 27, 1991 Form 8-K); Thirty-first Supplemental Indenture, dated as of December 15, 1991 (Exhibit 4-1 to February 28, 1992 Form 8-K); Thirty-second Supplemental Indenture, dated as of January 5, 1993 (Exhibit 4-1 to 1992 Form 10-K); Thirty-third Supplemental Indenture, dated as of May 1, 1995 (Exhibit 4-2 to Registration Statement No. 33-59093); Thirty-fourth Supplemental Indenture, dated as of November 1, 1996 (Exhibit 4-2 to Registration Statement No. 333-16285); and Thirty-fifth Supplemental Indenture, dated as of June 18, 1998 (Exhibit 4-2 to June 18, 1998 Form 8-K).
	4.	3	Form of Supplemental Indenture related to Senior Debt Securities (including Form of Senior Debt Securities incorporated by reference to Exhibit 4.1).
	4.	4	Form of Supplemental Indenture related to Collateral Bonds (including Form of Collateral Bonds).
	5.	1(a)	Opinion and Consent of Thomas A. Hughes, Esq., Associate General Counsel for MichCon, regarding validity of securities being registered.
	5.	1(b)	Opinion and Consent of Sidley Austin Brown & Wood LLP, regarding certain matters related to New York law.
	10.	1	Form of Indemnification Agreement between MichCon and its officers.
	10.	2	Form of Indemnification Agreement between MichCon and its directors.
	12.	1	Computation of Ratio of Earnings to Fixed Charges.
	15.	1	Awareness letter of Deloitte & Touche LLP.
	23.	1	Independent Auditors’ Consent — Deloitte & Touche LLP.
	23.	2	Consent of Thomas A. Hughes, Esq., Associate General Counsel for MichCon (included in Exhibit 5-1(a) to this registration statement).
	23.	3	Consent of Sidley Austin Brown & Wood LLP (included in Exhibit 5-1(b) to this registration statement).
	24.	1	Power of Attorney (appears on page II-6 of this registration statement).
	25.	1	Statement of Eligibility of Citibank, N.A. (senior debt securities)
	25.	2	Statement of Eligibility of Citibank, N.A. (first mortgage bonds).
	25.	3	Statement of Eligibility of Robert T. Kirchner, individual trustee.

References are to MichCon (File No. 1-7310) for documents incorporated by reference.

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EXHIBIT 1.1

MICHIGAN CONSOLIDATED GAS COMPANY

DEBT SECURITIES

UNDERWRITING AGREEMENT

[ ]

To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.

Ladies and Gentlemen:

From time to time the Michigan Consolidated Gas Company, a Michigan corporation (the "Company"), proposes to enter into one or more Pricing Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine, and, subject to the terms and conditions stated herein and therein, to issue and sell to the firms named in Schedule I to the applicable Pricing Agreement (such firms constituting the "Underwriters" with respect to such Pricing Agreement and the securities specified therein) certain of its debt securities (the "Securities") to be issued under the Senior Indenture, dated as of June 1, 1998, between the Company and Citibank, N.A., as trustee (in such capacity, the "Indenture Trustee"), as amended and supplemented by various supplemental indentures including the supplemental indenture (a "Supplemental Indenture") creating the Designated Securities (the "Indenture"), as specified in Schedule II to such Pricing Agreement (with respect to such Pricing Agreement, the "Designated Securities").

Payment of the principal of, premium, if any, and interest on each series of Securities is to be secured by the pledge by the Company to the Indenture Trustee of a First Mortgage Bond (each, a "Collateral Bond"), issued under and ratably secured by the Indenture of Mortgage and Deed of Trust, dated as of March 1, 1944 (the "Original Mortgage"), as supplemented and amended, including specifically by the Twenty-ninth Supplemental Indenture and the Thirty-fifth Supplemental Indenture creating the series in which the Collateral Bonds are to be issued and the supplemental indenture establishing the issue of Collateral Bonds relating to the Designated Securities (the "Mortgage").

The terms and rights of any particular issuance of Designated Securities shall be as specified in the Pricing Agreement relating thereto and in or pursuant to the Indenture and the Supplemental Indenture thereto identified in such Pricing Agreement.

1. Particular sales of Designated Securities may be made from time to time to the Underwriters of such Securities, for whom the firms designated as representatives of the

Underwriters of such Securities in the Pricing Agreement relating thereto will act as representatives (the "Representatives"). The term "Representatives" also refers to a single firm acting as sole representative of the Underwriters and to an Underwriter or Underwriters who act without any firm being designated as its or their representative. This underwriting agreement (the "Agreement") shall not be construed as an obligation of the Company to sell any of the Securities or as an obligation of any of the Underwriters to purchase the Securities. The obligation of the Company to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase any of the Securities shall be evidenced by the Pricing Agreement with respect to the Designated Securities specified therein. Each Pricing Agreement shall specify the aggregate principal amount of such Designated Securities, the initial public offering price of such Designated Securities, the purchase price to the Underwriters of such Designated Securities, the names of the Underwriters of such Designated Securities, the names of the Representatives of such Underwriters and the principal amount of such Designated Securities to be purchased by each Underwriter and shall set forth the date, time and manner of delivery of such Designated Securities and payment therefor. The Pricing Agreement shall also specify (to the extent not set forth in the Indenture, and the Registration Statement (as defined below) and prospectus with respect thereto) the terms of such Designated Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic communications, facsimile or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint.

2. The Company represents and warrants to, and agrees with, each of the Underwriters that:

(a) Registration statements on Form S-3 (Nos. 333-56333 and 333-[ ]) in respect of the Securities has been filed with the Securities and Exchange Commission (the "Commission"); such registration statements and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to such registration statements, but including all documents incorporated by reference in the prospectus contained therein, to the Representatives for each of the other Underwriters have been declared effective by the Commission in such form; no other document with respect to such registration statements or any post-effective amendment thereto or document incorporated by reference therein (other than prospectuses relating to the offering of securities other than the Designated Securities) has heretofore been filed or transmitted for filing with the Commission; and no stop order suspending the effectiveness of such registration statements or any post-effective amendment thereto has been issued and no proceeding for that purpose has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or any post-effective amendment thereto or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the "Act"), being hereinafter called a "Preliminary Prospectus"; the various parts of such registration statements or any post-effective amendment thereto, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in the registration statements at the time such part of the registration statements became effective, excluding the Statements of Eligibility and Qualification on Form T-1 of the Mortgage Trustee and Indenture Trustee (the "Forms T-1"), each as amended at the time such part of the registration statements became effective, being hereinafter called the "Registration Statement";

the prospectus relating to the Securities, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Sections 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the applicable Designated Securities in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof, including any documents incorporated by reference therein as of the date of such filing);

(b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading;

(c) The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the respective rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to the Designated Securities;

(d) Neither the Company nor any of its Significant Subsidiaries (as defined below) has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any material change in the capital stock or long-term debt of the Company or any of its Significant Subsidiaries or any material adverse change, or any development involving a prospective material adverse change (in either case not in the ordinary course of business), in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Prospectus; "Significant Subsidiary" shall mean each subsidiary listed on Schedule III to the Pricing Agreement; the only subsidiaries of the Company are (i) those subsidiaries listed on Schedule III and (ii) certain other subsidiaries which, considered in the aggregate as a single subsidiary, do not constitute a "significant subsidiary" as defined in Rule 1-02 of Regulation S-X of the rules and regulations under the Act;

(e) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; and, except as described in the Registration Statement and the Prospectus, the Company holds all material licenses, certificates and permits (or has applications pending) from governmental authorities necessary for the conduct of its business;

(f) Each Significant Subsidiary, if any, of the Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the power and authority (corporate and other) to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; and, except as described in the Registration Statement and the Prospectus, each Significant Subsidiary of the Company holds all material licenses, certificates and permits (or has applications pending) from governmental authorities necessary for the conduct of its business;

(g) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable;

(h) This Agreement and the Pricing Agreement with respect to the Designated Securities have been duly authorized, executed and delivered by the Company;

(i) The Company has good and marketable title to the properties specifically described in and conveyed by the Mortgage (except such property as may have been disposed of or released from the lien thereof in accordance with the terms thereof) subject only to the lien of the Mortgage, to permissible encumbrances, as defined in the Mortgage, as to property acquired by the Company subsequent to the execution of liens placed thereon at the time of such acquisition as permitted by the Mortgage, and to certain other reservations, rights of grantors under revocable permits, easements, licenses, zoning laws and ordinances and restrictions and minor defects or irregularities of title which do not materially impair the use of the property affected thereby in the operation of the business of the Company; the Company and its subsidiaries have good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except the liens of the Mortgage and such liens, encumbrances and defects as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries; the pipeline, distribution main and underground gas storage easements enjoyed by the Company and its subsidiaries are valid, subsisting and enforceable easements with such exceptions as do not materially interfere with the conduct of the business of the Company and its subsidiaries;

(j) The Mortgage is a first lien (subject to no prior liens, charges, encumbrances or security interests, except current taxes and assessments not yet due and minor encumbrances which do not materially impair the use of such property for the purpose for which it is held by the Company) duly filed and recorded, on substantially all of the Company's tangible properties and franchises (other than items purchased for resale in the ordinary course of business) and (subject to the necessity for particular filings and recordings in the case of certain personal property) will constitute a like lien on any such properties hereafter acquired by the Company except that any such after-acquired property will be subject to prior liens and encumbrances, if any, existing when acquired by the Company, except that the Mortgage will not become a lien upon after-acquired real property in a new county until it has been duly filed and recorded and except that the Mortgage may not be effective as to property acquired subsequent to the filing of a case with respect to the Company under the Bankruptcy Code (defined as Title 11, United States Code, Sections 1 et seq., as amended);

(k) The Securities have been duly authorized, and, when Designated Securities are issued and delivered pursuant to this Agreement and the Pricing Agreement with respect to such Designated Securities, such Designated Securities will have been duly executed, authenticated, issued and delivered, will be entitled to the benefits of the Indenture, and will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; the Indenture and the Mortgage have been duly authorized and duly qualified under the Trust Indenture Act and, at the Time of Delivery for such Designated Securities (as defined in Section 4 hereof), each of the Indenture and the Mortgage will constitute a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to

bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and each of the Indenture and the Mortgage conforms, and the Designated Securities will conform, to the descriptions thereof contained in the Prospectus as amended or supplemented with respect to such Designated Securities;

(l) The Collateral Bond has been duly authorized and established in conformity with the provisions of the Mortgage and, when the Collateral Bond has been executed and authenticated in accordance with the provisions of the Mortgage and pledged to the Indenture Trustee as contemplated by the Indenture, the Collateral Bond will be entitled to the benefits of the Mortgage and will be a valid and binding obligation of the Company, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; the payments of the principal of, premium, if any, and interest on the Designated Securities to which a Pricing Agreement relates are secured by the related Collateral Bond; assuming that the Indenture Trustee holds the Collateral Bond as provided in the Indenture, the Indenture creates a valid and perfected first priority security interest in the Collateral Bond; and the Collateral Bond will conform to the descriptions thereof contained in the Prospectus as amended or supplemented;

(m) The issue and sale of the Designated Securities and the compliance by the Company with all of the provisions of the Designated Securities, the Collateral Bond, the Mortgage, the Indenture, this Agreement and any Pricing Agreement, and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in any violation of the provisions of the Restated Articles of Incorporation, as amended, or By-laws of the Company or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Designated Securities or the consummation by the Company of the transactions contemplated by this Agreement or any Pricing Agreement, the Mortgage, or the Indenture except such as have been, or will have been prior to the Time of Delivery, obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Designated Securities by the Underwriters;

(n) The statements set forth in the Prospectus, as supplemented with respect to the Designated Securities, under the captions "Securities", "Description of the Senior Debt Securities" and "Description of the First Mortgage Bonds" (or similar captions), insofar as they purport to constitute a summary of the terms of the Designated Securities and, if applicable, under the caption "Taxation" (or similar caption), and under the captions "Plan of Distribution" and "Underwriting", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair;

(o) Neither the Company nor any of its Significant Subsidiaries is in violation of its Restated Articles of Incorporation, or, as the case may be, articles of incorporation or other equivalent document, or By-laws or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound;

(p) Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a material adverse effect on the current or future consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries; and, other than as set forth in the Prospectus, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;

(q) The Company is not and, after giving effect to the offering and sale of the Securities, will not be an "investment company", as such term is defined in the Investment Company Act of 1940, as amended (the "Investment Company Act");

(r) Deloitte & Touche LLP, who certified the financial statements and supporting schedules of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement and the Prospectus, are independent public accountants with respect to the Company and its consolidated subsidiaries as required by the Act and the rules and regulations thereunder;

(s) The financial statements of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement and the Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders' equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The Company has no material contingent obligation which is not disclosed in the Registration Statement and the Prospectus. The supporting schedules, if any, included in the Registration Statement and the Prospectus present fairly in accordance with GAAP the information required to be stated therein. If applicable, the pro forma financial statements of the Company and its consolidated subsidiaries and the related notes thereto included in the Registration Statement and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein;

(t) Other than as set forth in the Prospectus, the Company and its Significant Subsidiaries are (i) in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or

hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received (or have pending) all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole; and

(u) The Company is not a "holding company" but is an "affiliate" of a "holding company" (within the meaning of the Public Utility Holding Company Act of 1935, as amended (the "1935 Act")), which holding company is exempt from the provisions of the 1935 Act, other than Section 9(a)(2) thereof, pursuant to
Section 3(a)(1) thereof.

3. Upon the execution of the Pricing Agreement applicable to any Designated Securities and authorization by the Representatives of the release of such Designated Securities, the several Underwriters propose to offer such Designated Securities for sale upon the terms and conditions set forth in the Prospectus as amended or supplemented.

4. Designated Securities to be purchased by each Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in the Pricing Agreement, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours' prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor in the manner specified in the Pricing Agreement relating thereto, payable to the order of the Company, all at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the "Time of Delivery" for such Securities.

5. The Company agrees with each of the Underwriters of any Designated Securities:

(a) To prepare the Prospectus as amended or supplemented in relation to the applicable Designated Securities in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of the Pricing Agreement relating to the applicable Designated Securities or, if applicable, such earlier time as may be required by Rule 424(b); to make no further amendment or any supplement to the Registration Statement or Prospectus as amended or supplemented after the date of the Pricing Agreement relating to such Securities and prior to the Time of Delivery for such Securities which shall be disapproved by the Representatives for such Securities promptly after reasonable notice thereof; to advise the Representatives promptly of any such amendment or supplement after such Time of Delivery and furnish the Representatives with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of such Securities, and during such same period to advise the Representatives, promptly after it receives notice thereof,

of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of such Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Securities or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order;

(b) Promptly from time to time to take such action as the Representatives may reasonably request to qualify such Securities for offering and sale under the securities laws of such jurisdictions as the Representatives may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of such Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction;

(c) To furnish the Underwriters with copies of the Prospectus as amended or supplemented in such quantities as the Representatives may reasonably request, and, if the delivery of a prospectus is required at any time in connection with the offering or sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify the Representatives and upon their request to file such document and to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance;

(d) To make generally available to its securityholders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11 (a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158); and

(e) During the period beginning from the date of the Pricing Agreement for such Designated Securities and continuing to and including the later of (i) the termination of trading restrictions for such Designated Securities, as notified to the Company by the Representatives and (ii) the Time of Delivery for such Designated Securities, not to offer, sell, contract to sell or otherwise dispose of any debt securities of the Company which mature more than one year after

such Time of Delivery and which are substantially similar to such Designated Securities, without the prior written consent of the Representatives.

(f) At the Time of Delivery, the Company will issue and deliver the related Collateral Bond to the Indenture Trustee as security for the Designated Securities.

6. The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) the reasonable fees, disbursements and expenses of the Company's counsel and accountants in connection with the registration of the Securities under the Act and all other reasonable expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, any Pricing Agreement, the Mortgage, any Indenture, any Blue Sky and legal investment memoranda, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all reasonable expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky and legal investment surveys; (iv) any fees charged by securities rating services for rating the Securities; (v) the cost of preparing the Securities; (vi) the reasonable fees and expenses of any Trustee and any agent of any Trustee and the reasonable fees and disbursements of counsel for any Trustee in connection with the Mortgage, the Indenture and the Securities;
(vii) any filing fees incident to, and the reasonable fees and disbursements of counsel for the Underwriters in connection with, any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Securities and (viii) all other reasonable costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section; it being acknowledged and agreed that the Underwriters shall have no responsibility for payment of any of the foregoing costs, fees, disbursements and expenses, whether reasonable or not. It is understood, however, that, except as provided in this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make.

7. The obligations of the Underwriters of any Designated Securities under the Pricing Agreement relating to such Designated Securities shall be subject, in the discretion of the Representatives, to the condition that all representations and warranties and other statements of the Company in or incorporated by reference in the Pricing Agreement relating to such Designated Securities are, at and as of the Time of Delivery for such Designated Securities, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

(a) The Prospectus as amended or supplemented in relation to the applicable Designated Securities shall have been filed with the Commission pursuant to Rule 424 (b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the

Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the Representatives' reasonable satisfaction;

(b) Counsel for the Underwriters shall have furnished to the Representatives such opinion or opinions, dated the Time of Delivery for such Designated Securities, with respect to this Agreement, the validity of the Mortgage, the Indenture, the Designated Securities and the Collateral Bonds, the Registration Statement, the Prospectus as amended or supplemented and other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;

(c) Thomas A. Hughes, Esq., Associate General Counsel to the Company, shall have furnished to the Representatives his written opinion, dated the Time of Delivery for such Designated Securities, in form and substance satisfactory to the Representatives, to the effect that:

(i) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus as amended or supplemented and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; and, except as described in the Registration Statement and the Prospectus, the Company holds all material licenses, certificates and permits (or has applications pending) from governmental authorities necessary for the conduct of its business;

(ii) The Company has an authorized capitalization as set forth in the Prospectus as amended or supplemented and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable;

(iii) Each Significant Subsidiary, if any, of the Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the power and authority (corporate and other) to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; and, except as described in the Registration Statement and the Prospectus, each Significant Subsidiary of the Company holds all material licenses, certificates and permits (or has applications pending) from governmental authorities necessary for the conduct of its business;

(iv) To the best of such counsel's knowledge after due inquiry and other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would, individually or in the aggregate, have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries; and, to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;

(v) This Agreement and the Pricing Agreement with respect to the Designated Securities have been duly authorized, executed and delivered by the Company;

(vi) The Company has good and marketable title to the properties specifically described in and conveyed by the Mortgage (except such property as may have been disposed of or released from the lien thereof in accordance with the terms thereof) subject only to the lien of the Mortgage, to permissible encumbrances, as defined in the Mortgage, as to property acquired by the Company subsequent to the execution of liens placed thereon at the time of such acquisition as permitted by the Mortgage, and to certain other reservations, rights of grantors under revocable permits, easements, licenses, zoning laws and ordinances and restrictions and minor defects or irregularities of title which do not materially impair the use of the property affected thereby in the operation of the business of the Company; the Company and its subsidiaries have good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except the liens of the Mortgage and such liens, encumbrances and defects as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries; the pipeline, distribution main and underground gas storage easements enjoyed by the Company and its subsidiaries are valid, subsisting and enforceable easements with such exceptions as do not materially interfere with the conduct of the business of the Company and its subsidiaries;

(vii) The Designated Securities have been duly authorized and established in conformity with the provisions of the Indenture, and, when such Designated Securities are executed by the Company and authenticated by the Indenture Trustee in accordance with the provisions of the Indenture, such Designated Securities will be entitled to the benefits of the Indenture, and will be valid and legally binding obligations of the Company, enforceable in accordance with their terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; and the Designated Securities, the Indenture and the Mortgage conform in all material

respects to the descriptions thereof in the Prospectus as amended or supplemented with respect to such Designated Securities;

(viii) Each of the Indenture and the Mortgage has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization, fraudulent conveyance and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and each of the Indenture and the Mortgage has been duly qualified under the Trust Indenture Act;

(ix) The Mortgage is a first lien (subject to no prior liens, charges, encumbrances or security interests, except current taxes and assessments not yet due and minor encumbrances which, in such counsel's opinion, do not materially impair the use of such property for the purpose for which it is held by the Company) duly filed and recorded, on substantially all of the Company's tangible properties and franchises
(other than items purchased for resale in the ordinary course of business) and (subject to the necessity for particular filings and recordings in the case of certain personal property) will constitute a like lien on any such properties hereafter acquired by the Company except that any such after-acquired property will be subject to prior liens and encumbrances, if any, existing when acquired by the Company, except that the Mortgage will not become a lien upon after-acquired real property in a new county until it has been duly filed and recorded and except that the Mortgage may not be effective as to property acquired subsequent to the filing of a case with respect to the Company under the Bankruptcy Code;

(x) The Collateral Bond has been duly authorized and established in conformity with the provisions of the Mortgage and, when the Collateral Bond has been executed and authenticated in accordance with the provisions of the Mortgage and pledged to the Indenture Trustee as contemplated by the Indenture, the Collateral Bond will be entitled to the benefits of the Mortgage and will be a valid and binding obligation of the Company, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; the payments of the principal of, premium, if any, and interest on the Designated Securities to which a Pricing Agreement relates are secured by the related Collateral Bond; assuming that the Indenture Trustee holds the Collateral Bond as provided in the Indenture, the Indenture creates a valid and perfected first priority security interest in the Collateral Bond; and the Collateral Bond conforms to the description thereof contained in the Prospectus as amended or supplemented;

(xi) The issue and sale of the Designated Securities and the compliance by the Company with all of the provisions of the Designated Securities, the Collateral Bond, the Mortgage, the Indenture, this Agreement and the Pricing Agreement with respect to the Designated Securities and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms

or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel, after due inquiry, to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, nor will such actions result in any violation of the provisions of the Restated Articles of Incorporation, as amended, or By-laws of the Company or any statute or any order, rule or regulation known to such counsel of any court or governmental agency, including, without limitation, the Michigan Public Service Commission, or any body having jurisdiction over the Company or any of its properties, except that such counsel need express no opinion as to rights to indemnity which may be limited by applicable law;

(xii) No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency, including, without limitation, the Michigan Public Service Commission, or any other body is required for the issue and sale of the Designated Securities or the consummation by the Company of the transactions contemplated by this Agreement or such Pricing Agreement or the Mortgage, or the Indenture except such as have been obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Designated Securities by the Underwriters;

(xiii) The statements set forth in the Prospectus, as supplemented with respect to the Designated Securities, under the captions "Securities", "Description of the Senior Debt Securities" and "Description of the First Mortgage Bonds" (or similar captions), insofar as they purport to constitute a summary of the terms of the Designated Securities and, if applicable, under the caption "Taxation" (or similar caption), and under the captions "Plan of Distribution" and "Underwriting", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair;

(xiv) Neither the Company nor any of its Significant Subsidiaries is in violation of its Restated Articles of Incorporation, or, as the case may be, articles of incorporation or other equivalent document, or By-laws or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound;

(xv) The Company is not and, after giving effect to the offering and sale of the Securities, will not be an "investment company", as such term is defined in the Investment Company Act;

(xvi) The Company is not a "holding company" but is an "affiliate" of a "holding company" (within the meaning of the Public Utility Holding Company Act of 1935, as amended (the "1935 Act")), which holding company is exempt from the provisions of the 1935 Act, other than Section 9(a)(2) thereof, pursuant to Section 3(a)(1) thereof;

(xvii) The documents incorporated by reference in the Prospectus as amended or supplemented (other than the financial statements and related schedules and financial data therein and except for those parts of the Registration Statement which constitute the Forms T-1, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; and such counsel has no reason to believe that any of such documents, when they became effective or were so filed, as the case may be, contained, in the case of a registration statement which became effective under the Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or, in the case of other documents which were filed under the Act or the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading; and

(xviii) The Registration Statement and the Prospectus as amended or supplemented and any further amendments and supplements thereto made by the Company prior to the Time of Delivery for the Designated Securities (other than the financial statements and related schedules and other financial data therein and except for those parts of the Registration Statement which constitute the Forms T-1, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder; although such counsel does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus, except for those referred to in the opinion in subsection (xiii) of this
Section 7(c); such counsel has no reason to believe that, as of its effective date, the Registration Statement or any further amendment thereto (including the filing of the Company's most recent Annual Report on Form 10-K with the Commission) made by the Company prior to the Time of Delivery (other than the financial statements and related schedules and other financial data therein and except for those parts of the Registration Statement which constitute the Forms T-1, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that, as of its date, the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules and other financial data therein and except for those parts of the Registration Statement which constitute the Forms T-1, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading or that, as of the Time of Delivery, either the Registration Statement or the Prospectus as amended or supplemented or any further amendment or supplement thereto made by the Company prior to the Time of Delivery (other than the financial statements and related schedules and other financial data therein and except for those parts of the Registration Statement which constitute the Forms T-1, as to which such counsel need express no

opinion) contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; and such counsel does not know of any amendment to the Registration Statement required to be filed or any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus as amended or supplemented or required to be described in the Registration Statement or the Prospectus as amended or supplemented which are not filed or incorporated by reference or described as required;

(d) Except as otherwise agreed, on the date of the Pricing Agreement relating to the Designated Securities, the independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to the Representatives a letter or letters dated the date of the Pricing Agreement, each in a form satisfactory to you;

(e) At the Time of Delivery for such Designated Securities, the independent accountants of the Company who have certified the financial statements of the Company and its subsidiaries included or incorporated by reference in the Registration Statement shall have furnished to the Representatives a "bring down" letter or letters dated at the Time of Delivery, each in a form satisfactory to you or, if no letter has been previously delivered pursuant to paragraph (d) above, a letter to the effect specified pursuant to such paragraph (d), but dated at the Time of Delivery;

(f) (i) Neither the Company nor any of its Significant Subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus as amended or supplemented prior to the date of the Pricing Agreement relating to the Designated Securities any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus as amended or supplemented prior to the date of the Pricing Agreement relating to the Designated Securities, and (ii) since the respective dates as of which information is given in the Prospectus as amended or supplemented prior to the date of the Pricing Agreement relating to the Designated Securities there shall not have been any material change in the capital stock or long-term debt of the Company or any of its Significant Subsidiaries or any material adverse change, or any development involving a prospective material adverse change (other than such as may have occurred in the ordinary course of business), in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Prospectus as amended or supplemented, the effect of which, in any such case described in clause (i) or
(ii), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Designated Securities on the terms and in the manner contemplated in the Prospectus as amended or supplemented;

(g) On or after the date of the Pricing Agreement relating to the Designated Securities (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization," as that term is defined by the

Commission for purposes of Rule 436(g) (2) under the Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities;

(h) On or after the date of the Pricing Agreement relating to the Designated Securities there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (ii) a suspension or material limitation in trading in the Company's securities on the New York Stock Exchange; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities; or (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war if the effect of any such event specified in this clause (iv) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Designated Securities on the terms and in the manner contemplated in the Prospectus as first amended or supplemented relating to the Designated Securities; and

(i) The Company shall have furnished or caused to be furnished to the Representatives at the Time of Delivery for the Designated Securities a certificate or certificates of officers of the Company satisfactory to the Representatives as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (f) of this
Section and as to such other matters as the Representatives may reasonably request.

8. (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any reasonable legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by any Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities.

(b) Each Underwriter, severally and not jointly, will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or

actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.

(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

(d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters of the Designated Securities on the other from the offering of the Designated Securities to which such loss, claim, damage or liability (or action in respect thereof)

relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters of the Designated Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or such Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Designated Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Designated Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint.

(e) The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act.

9. (a) If any Underwriter shall default in its obligation to purchase the Designated Securities which it has agreed to purchase under the Pricing Agreement relating to such Designated Securities, the Representatives may in their discretion arrange for themselves or another party or other parties to purchase such Designated Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Representatives do

not arrange for the purchase of such Designated Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Representatives to purchase such Designated Securities on such terms. In the event that, within the respective prescribed period, the Representatives notify the Company that they have so arranged for the purchase of such Designated Securities, or the Company notifies the Representatives that it has so arranged for the purchase of such Designated Securities, the Representatives or the Company shall have the right to postpone the Time of Delivery for such Designated Securities for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus as amended or supplemented, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the opinion of the Representatives may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to the Pricing Agreement with respect to such Designated Securities.

(b) If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in subsection (a) above, the aggregate principal amount of such Designated Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of the Designated Securities, then the Company shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Designated Securities which such Underwriter agreed to purchase under the Pricing Agreement relating to such Designated Securities and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of Designated Securities which such Underwriter agreed to purchase under such Pricing Agreement) of the Designated Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

(c) If, after giving effect to any arrangements for the purchase of the Designated Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in subsection (a) above the aggregate principal amount of Designated Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of the Designated Securities, as referred to in subsection (b) above, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Designated Securities of a defaulting Underwriter or Underwriters, then the Pricing Agreement relating to such Designated Securities shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

10. The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any

officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities.

11. If any Pricing Agreement shall be terminated pursuant to Section 9 hereof, the Company shall not then be under any liability to any Underwriter with respect to the Designated Securities covered by such Pricing Agreement except as provided in Section 6 and Section 8 hereof; but, if for any other reason Designated Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriters through the Representatives for all out-of-pocket expenses approved in writing by the Representatives, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of such Designated Securities, but the Company shall then be under no further liability to any Underwriter with respect to such Designated Securities except as provided in Section 6 and Section 8 hereof.

12. In all dealings hereunder, the Representatives of the Underwriters of Designated Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement.

All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement: Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

13. This Agreement and each Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Section 8 and Section 10 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any such Pricing Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.

14. Time shall be of the essence of each Pricing Agreement. As used herein, "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business.

15. This Agreement and each Pricing Agreement shall be governed by and construed in accordance with the laws of the State of New York.

16. This Agreement and each Pricing Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.

Very truly yours,

Michigan Consolidated Gas Company

By:

Name:

Title:

Accepted as of the date hereof:

[Underwriters]

By: [ ]

By:
Name:
Title:

ANNEX I

PRICING AGREEMENT

[Underwriters]

[ ]

Dear Sirs:

The Michigan Consolidated Gas Company, a Michigan corporation (the "Company"), proposes, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated [ ] (the "Underwriting Agreement"), between the Company on the one hand and [Underwriters] to issue and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the Securities specified in Schedule II hereto (the "Designated Securities"). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Pricing Agreement in relation to the Prospectus as amended or supplemented relating to the Designated Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Designated Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto.

An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission.

Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the principal amount of Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto.

If the foregoing is in accordance with your understanding, please sign and return to us counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement

incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof.

Very truly yours,

Michigan Consolidated Gas Company

By:

Name:

Title:

Accepted as of the date hereof:

[Underwriters]

By: [ ]

By:
Name:
Title:

SCHEDULE I

                                                            Principal Amount
                                                             of Designated
                                                           Securities to be
Underwriter                                                    Purchased
-----------                                                ------------------
                                                             $


Total                                                        $
                                                             ===========

Sch. II-1

SCHEDULE II

TITLE OF DESIGNATED SECURITIES:

AGGREGATE PRINCIPAL AMOUNT:

$[ ]

PRICE TO PUBLIC:

PURCHASE PRICE BY UNDERWRITERS:

FORM OF DESIGNATED SECURITIES:

SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE: Same day funds.

INDENTURE OF MORTGAGE AND DEED OF TRUST:

Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, as supplemented and amended, including specifically by the Twenty-ninth Supplemental Indenture dated as of July 15, 1989, the Thirty-fifth Supplemental Indenture dated as of June 18, 1998, and the Supplemental Indenture, dated as of [ ], between the Company and Citibank, N.A., as Mortgage Trustee, and Robert T. Kirchner, as Individual Trustee.

INDENTURE:

Senior Indenture dated as of June 1, 1998, as amended and supplemented by and through a Supplemental Indenture, dated as of [ ] between the Company and Citibank, N.A.

MATURITY:

INTEREST RATE:

DAY COUNT:

360-day year of twelve 30-day months

Sch. II-1

INTEREST PAYMENT DATES:

[ ] and [ ], of each year

REDEMPTION PROVISIONS:

As set forth in the Designated Securities

SINKING FUND PROVISIONS:

No sinking fund provisions.

TIME OF DELIVERY:

CLOSING LOCATION FOR DELIVERY OF SECURITIES:

Sidley Austin Brown & Wood LLP
One World Trade Center
New York, New York 10048

NAMES AND ADDRESSES OF REPRESENTATIVES:

Sch. II-2

SCHEDULE III

SIGNIFICANT SUBSIDIARIES

Sch. III-1

MICHIGAN CONSOLIDATED GAS COMPANY,
AS ISSUER

CITIBANK, N.A.,
AS TRUSTEE

INDENTURE

SENIOR DEBT SECURITIES

DATED AS OF JUNE 1, 1998

TABLE OF CONTENTS

                                                                                           PAGE

                                   ARTICLE I.
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1   Definitions.....................................................................1
Section 1.2   Compliance Certificates and Opinions............................................9
Section 1.3   Form of Documents Delivered to Trustee.........................................10
Section 1.4   Acts of Holders................................................................11
Section 1.5   Notices, Etc., to Trustee and Company..........................................11
Section 1.6   Notice to Holders; Waiver......................................................12
Section 1.7   Conflict with Trust Indenture Act..............................................12
Section 1.8   Effect of Headings and Table of Contents.......................................12
Section 1.9   Successors and Assigns.........................................................13
Section 1.10  Separability Clause............................................................13
Section 1.11  Benefits of Indenture..........................................................13
Section 1.12  Governing Law..................................................................13
Section 1.13  Legal Holidays.................................................................13
Section 1.14  No Recourse Against Others.....................................................13

                                   ARTICLE II.
                                 SECURITY FORMS

Section 2.1   Forms Generally................................................................14
Section 2.2   Form of Face of Security.......................................................14
Section 2.3   Form of Reverse of Security....................................................17
Section 2.4   Form of Trustee's Certificate of Authentication................................23
Section 2.5   Securities in Global Form......................................................23
Section 2.6   CUSIP Number...................................................................24
Section 2.7   Form of Legend for the Securities in Global Form...............................24

                                  ARTICLE III.
                                 THE SECURITIES

Section 3.1   Amount Unlimited; Issuable in Series...........................................24
Section 3.2   Denominations..................................................................26
Section 3.3   Execution, Authentication, Delivery and Dating.................................27
Section 3.4   Temporary Securities...........................................................29
Section 3.5   Registration, Registration of Transfer and Exchange............................30
Section 3.6   Mutilated, Destroyed, Lost and Stolen Securities...............................32
Section 3.7   Payment of Interest; Interest Rights Preserved.................................32
Section 3.8   Persons Deemed Owners..........................................................33
Section 3.9   Cancellation...................................................................34
Section 3.10  Computation of Interest........................................................34

                                   ARTICLE IV.
                 COLLATERAL BONDS; SUBSTITUTED COLLATERAL BONDS

Section 4.1   Collateral Bonds Held by the Trustee...........................................34
Section 4.2   No Transfer of Collateral Bonds; Exception.....................................35
Section 4.3   Delivery to the Company of All Collateral Bonds................................35
Section 4.4   Further Assurances.............................................................35
Section 4.5   Exchange and Surrender of Collateral Bonds.....................................35
Section 4.6   Acceptance of Additional Collateral Bonds......................................36
Section 4.7   Terms of Collateral Bonds......................................................36
Section 4.8   Collateral Bonds as Security for Securities;
              Application of Payment on Collateral Bonds.....................................36
Section 4.9   Substituted Collateral Bonds...................................................37

                                   ARTICLE V.
                           SATISFACTION AND DISCHARGE

Section 5.1   Satisfaction and Discharge of Indenture........................................38
Section 5.2   Application of Trust Money.....................................................39

                                   ARTICLE VI.
                                    REMEDIES

Section 6.1   Events of Default..............................................................39
Section 6.2   Acceleration of Maturity; Rescission and Annulment.............................41
Section 6.3   Collection of Indebtedness and Suits for Enforcement by Trustee................42
Section 6.4   Trustee May File Proofs of Claim...............................................43
Section 6.5   Trustee May Enforce Claims Without Possession of Securities....................43
Section 6.6   Application of Money Collected.................................................43
Section 6.7   Limitation on Suits............................................................44
Section 6.8   Unconditional Right of Holders to Receive......................................44
Section 6.9   Restoration of Rights and Remedies.............................................45
Section 6.10  Rights and Remedies Cumulative.................................................45
Section 6.11  Delay or Omission Not Waiver...................................................45
Section 6.12  Control by Holders.............................................................45
Section 6.13  Waiver of Past Defaults........................................................46
Section 6.14  Undertaking for Costs..........................................................46

                                  ARTICLE VII.
                                   THE TRUSTEE

Section 7.1   Certain Duties and Responsibilities of the Trustee.............................46
Section 7.2   Notice of Defaults.............................................................47
Section 7.3   Certain Rights of Trustee......................................................47
Section 7.4   Not Responsible for Recitals or Issuance of Securities.........................48
Section 7.5   May Hold Securities............................................................48
Section 7.6   Money Held in Trust............................................................48

Section 7.7   Compensation and Reimbursement.................................................48
Section 7.8   Disqualification Conflicting Interests.........................................49
Section 7.9   Corporate Trustee Required; Eligibility........................................49
Section 7.10  Resignation and Removal; Appointment of Successor..............................50
Section 7.11  Acceptance of Appointment by Successor.........................................51
Section 7.12  Merger, Conversion, Consolidation or Succession to Business....................52
Section 7.13  Preferential Collection of Claims Against Company..............................52
Section 7.14  Appointment of Authenticating Agent............................................52

                                  ARTICLE VIII.
                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 8.1   Company to Furnish Trustee Names and Addresses of Holders......................54
Section 8.2   Preservation of Information; Communications to Holders.........................54
Section 8.3   Reports by Trustee.............................................................55
Section 8.4   Reports by Company.............................................................56

                                   ARTICLE IX.
                 CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER

Section 9.1   When Company May Merge, Etc....................................................57
Section 9.2   Opinion of Counsel.............................................................57
Section 9.3   Successor Corporation Substituted..............................................57

                                   ARTICLE X.
                             SUPPLEMENTAL INDENTURES

Section 10.1  Supplemental Indentures Without Consent of Holders.............................58
Section 10.2  Supplemental Indentures with Consent of Holders................................59
Section 10.3  Execution of Supplemental Indentures...........................................60
Section 10.4  Effect of Supplemental Indentures..............................................60
Section 10.5  Conformity with Trust Indenture Act............................................60
Section 10.6  Reference in Securities to Supplemental Indentures.............................60

                                   ARTICLE XI.
                                    COVENANTS

Section 11.1  Payments of Securities.........................................................60
Section 11.2  Maintenance of Office or Agency................................................61
Section 11.3  Corporate Existence............................................................61
Section 11.4  Payment of Taxes and Other Claims..............................................61
Section 11.5  Maintenance of Properties......................................................62
Section 11.6  Compliance Certificates........................................................62
Section 11.7  Commission Reports.............................................................63
Section 11.8  Waiver of Stay, Extension or Usury Laws........................................63
Section 11.9  Money for Securities Payments to Be Held in Trust..............................63
Section 11.10 Limitation on Liens............................................................64

Section 11.11 Limitation on Sale and Leaseback Transactions..................................66
Section 11.12 Waiver of Certain Covenants....................................................66

                              ARTICLE XII.
                        REDEMPTION OF SECURITIES

Section 12.1  Applicability of Article.......................................................67
Section 12.2  Election to Redeem; Notice to Trustee..........................................67
Section 12.3  Election by Trustee of Securities to Be Redeemed...............................67
Section 12.4  Notice of Redemption...........................................................68
Section 12.5  Deposit of Redemption Price....................................................68
Section 12.6  Securities Payable on Redemption Date..........................................69
Section 12.7  Securities Redeemed in Part....................................................69

                                  ARTICLE XIII.
                                  SINKING FUNDS

Section 13.1  Applicability of Article.......................................................69
Section 13.2  Satisfaction of Sinking Fund Payments with Securities..........................70
Section 13.3  Redemption of Securities for Sinking Fund......................................70

                              ARTICLE XIV.
                   DEFEASANCE AND COVENANT DEFEASANCE

Section 14.1  Applicability of Article; Company's Option to Effect Defeasance or
              Covenant Defeasance............................................................70
Section 14.2  Defeasance and Discharge.......................................................71
Section 14.3  Covenant Defeasance............................................................71
Section 14.4  Conditions to Defeasance or Covenant Defeasance................................71
Section 14.5  Deposited Money and Government Obligations To Be Held In Trust.................73

                                   ARTICLE XV.
                                  MISCELLANEOUS

Section 15.1  Miscellaneous..................................................................74

MICHIGAN CONSOLIDATED GAS COMPANY

Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of June 1, 1998

Trust Indenture

Act Section                                                    Indenture Section
Section 310(a)(1)..........................................           7.9
         (a)(2)............................................           7.9
         (a)(3)............................................     Not Applicable
         (a)(4)............................................     Not Applicable
         (b)...............................................        7.8,7.10
Section 311 (a)............................................          7.13
         (b)...............................................          7.13
Section 312(a).............................................       8.1, 8.2(a)
         (b)...............................................         8.2(b)
         (c)...............................................         8.2(c)
Section 313(a).............................................         8.3(a)
         (b)...............................................     Not Applicable
         (c)...............................................     8.3(a), 8.3(b)
         (d)...............................................         8.3(b)
Section 314(a).............................................           8.4
         (b)...............................................     Not Applicable
         (c)(1)............................................           1.2
         (c)(2)............................................           1.2
         (c)(3)............................................     Not Applicable
         (d)...............................................     Not Applicable
         (e)...............................................           1.2
Section 315(a).............................................         7.1 (a)
         (b)...............................................           7.2
         (c)...............................................         7.1 (b)
         (d)...............................................         7.1 (c)
         (d)(1)............................................     7.1(a), 7.1 (c)
         (d)(2)............................................         7.1 (c)
         (d)(3)............................................         7.1 (c)
         (e)...............................................          6.14
Section 316(a)(1)(A).......................................          6.12
         (a)(1)(B).........................................        6.2, 6.13
         (a)(2)............................................     Not Applicable
         (b)...............................................           6.8
Section 317(a)(1)..........................................           6.3

         (a)(2)............................................           6.4
         (b)...............................................          11.9
Section 318(a).............................................           1.7


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

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of this Indenture.

INDENTURE, dated as of June 1, 1998, between MICHIGAN CONSOLIDATED GAS COMPANY, a corporation duly organized and existing under the laws of the State of Michigan (herein called the "COMPANY"), having its principal office at 500 Griswold Street, Detroit, Michigan 48226, and Citibank, N.A., a national banking association incorporated and existing under and by virtue of the laws of the United States of America, as Trustee (herein called the "TRUSTEE").

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its senior debentures, notes or other evidences of indebtedness (herein called the "SECURITIES"), to be issued in one or more series as in this Indenture provided.

Subject to the provisions of Section 4.8 hereof, the Company has issued First Mortgage Bonds (as hereinafter defined) and has issued and delivered Collateral Bonds to the Trustee to hold in trust for the benefit of the respective Holders (as hereinafter defined) from time to time of the related issue of Securities. Any payment by the Company of principal of, premium, if any, and interest on, a series of First Mortgage Bonds will be applied by the Trustee to satisfy the Company's obligations with respect to the principal of, premium, if any, and interest on, the related issue of Securities. Pursuant to the terms and provisions hereof, the Company may issue and deliver to the Trustee additional First Mortgage Bonds for such purpose or require the Trustee to deliver to the Company for cancellation any and all Collateral Bonds held by the Trustee.

All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:

ARTICLE I.

DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION

Section 1.1. Definitions.

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;

(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

(4) the word "INCLUDING" (and with correlative meaning "INCLUDE") means including, without limiting the generality of, any description preceding such term; and

(5) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

Certain terms, used principally in Article Seven, are defined in that Article.

"ACT," when used with respect to any Holder, has the meaning specified in Section 1.4.

"AFFILIATE" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

"AUTHENTICATING AGENT" means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Securities.

"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 Company; provided, however, that when the context refers to actions or resolutions of the Board of Directors, then the term "Board of Directors" shall also mean any duly authorized committee of the Board of Directors of the Company or Officer authorized to act with respect to any particular matter to exercise the power of the Board of Directors of the Company.

"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

"BUSINESS DAY," when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or regulation to close.

"CAPITAL STOCK" of any Person shall mean any and all shares, interests, participations or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock, but excluding any debt securities convertible into such equity.

"CAPITALIZED LEASE OBLIGATION" means an obligation under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with such principles.

"COLLATERAL BONDS," shall mean any First Mortgage Bonds issued by the Company under the First Mortgage Indenture and issued and delivered to the Trustee pursuant to Section 4.6.

"COMMISSION" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

"COMMON DEPOSITARY" has the meaning specified in Section 3.4.

"COMPANY" means the Person named as the "Company" in the first paragraph of this Indenture until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation.

"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order signed in the name of the Company by its Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Controller, an Assistant Controller, its Secretary or an Assistant Secretary, and delivered to the Trustee:

"CORPORATE TRUST OFFICE" means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 111 Wall Street, 5th Floor, New York, New York 10043, Attention: Corporate Agency and Trust Department, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as a successor Trustee may designate from time to time by notice to the Holders and the Company).

"COVENANT DEFEASANCE" has the meaning specified in Section 14.3.

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

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

"DEFAULTED INTEREST" has the meaning specified in Section 3.7.

"DEFEASANCE" has the meaning specified in Section 14.2.

"DOLLARS" and "$" means lawful money of the United States of America.

"EVENT OF DEFAULT" has the meaning specified in Section 6.1.

"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as amended from time to time, and the rules and regulations promulgated thereunder.

"FIRST MORTGAGE BONDS" shall mean all First Mortgage Bonds issued by the Company and outstanding under the First Mortgage Indenture, including in all events any Collateral Bonds issued and delivered to and held by the Trustee.

"FIRST MORTGAGE INDENTURE" shall mean the Twenty-Ninth Supplemental Indenture dated as of July 15, 1989 providing for the restatement of the Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between the Company and the Trustee and Robert T. Kirchner which became effective on April 1, 1994, as supplemented and amended by the supplemental indentures thereto.

"HOLDER" or "SECURITYHOLDER" means a Person in whose name a Security is registered in the Security Register.

"INDEBTEDNESS" of any Person means, without duplication, (i) the principal of and premium (if any) in respect of (A) indebtedness of such Person for money borrowed and (B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such Person is responsible or liable; (ii) all Capitalized Lease Obligations of such Person; (iii) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (iv) all obligations of such Person for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third Business Day following receipt by such Person of a demand for reimbursement following payment on the letter of credit); (v) all obligations of the type referred to in clauses
(i) through (iv) of other Persons and all dividends of other Persons for the payment of which, in either case, such Person is responsible or liable as obligor, guarantor or otherwise; and (vi) all obligations of the type referred to in clauses (i) through (v) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured.

"INDENTURE" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established as contemplated by Section 3.1.

"INITIAL SECURITIES" shall mean Securities in an aggregate principal amount of $150,000,000 authenticated and delivered upon the execution of this Indenture.

"INTEREST," when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

"INTEREST PAYMENT DATE," when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

"LIEN," means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, capitalized lease or other title retention agreement).

"MATURITY," when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

"MORTGAGE," shall mean and include any mortgage, pledge, lien or security interest.

"MORTGAGE TRUSTEE," shall mean the Person serving as trustee at the time under the First Mortgage Indenture.

"OFFICER" means the Chairman of the Board, the Vice Chairman of the Board, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary of the Company.

"OFFICER'S CERTIFICATE" means a certificate signed by an Officer and delivered to the Trustee.

"OPINION OF COUNSEL" means a written opinion of counsel, who may be an employee of or counsel for the Company, and who shall be reasonably acceptable to the Trustee.

"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.2.

"OUTSTANDING," when used with respect to Securities or Securities of any series, means, as of the date of determination, all such Securities theretofore authenticated and delivered under this Indenture, except:

(i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(ii) Securities, or portions thereof, for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities 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;

(iii) Securities which have been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; and

(iv) Securities which have been defeased pursuant to Section 14.2;

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (a) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be that portion of the principal amount thereof that could be declared to be due and payable upon the occurrence of an Event of Default and the continuation thereof pursuant to the terms of such Original Issue Discount Security as of the date of such determination and (b) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

"PAYING AGENT" means any Person authorized by the Company to pay the principal of (and premium, if any) or interest on any Securities on behalf of the Company. The Company may act as Paying Agent with respect to any Securities issued hereunder.

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

"PLACE OF PAYMENT," when used with respect to the Securities of any series, means the place or places where the principal of (and premium, if any) and interest on the Securities of that series are payable as specified as contemplated by Section 3.1.

"PROJECT FINANCE INDEBTEDNESS" means Indebtedness of a Subsidiary secured by a Lien on any property acquired, constructed or improved by such Subsidiary after the date of this Indenture which Lien is created or assumed contemporaneously with, or within 120 days after, such acquisition or completion of such construction or improvement, or within six months thereafter pursuant to a firm commitment for financing arranged with a lender or investor within such 120-day period, to secure or provide for the payment of all or any part of the purchase price of such property or the cost of such construction or improvement, or on any property existing at the time of acquisition thereof; provided that such a Lien shall not apply to any property theretofore owned by any such Subsidiary other than, in the case of any such construction or improvement, any -theretofore unimproved real property on which the property so constructed or the improvement is located; and provided further that such Indebtedness, by its terms, shall limit

the recourse of any holder of such Indebtedness (or trustee on such holder's behalf) in the event of any default in such Indebtedness to the assets subject to such Liens and the capital stock of the Subsidiary issuing such Indebtedness. Notwithstanding the foregoing, Project Finance Indebtedness shall include all Indebtedness that would constitute Project Finance Indebtedness but for the fact that such Indebtedness was issued prior to the date of this Indenture and taking into account the fact that the property subject to the Lien may have been acquired prior to the date of this Indenture.

"REDEMPTION DATE," when used with respect to any Security of any series to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.

"REDEMPTION PRICE," when used with respect to any Security of any series to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

"REGULAR RECORD DATE" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 3.1.

"RELATED ISSUE OF COLLATERAL BONDS," shall mean, when used in reference to an issue of Notes, the issue of Collateral Bonds, having the same stated rate or rates of interest (or interest calculated in the same manner), Interest Payment Dates, stated maturity date and redemption provisions, and in the same aggregate principal amount, delivered to the Trustee pursuant to Section 4.6 in connection with the initial authentication and issuance of such Notes pursuant to Section 3.3.

"RELATED ISSUE OF SUBSTITUTED COLLATERAL BONDS," shall mean, when used in reference to an issue of Notes, the issue of Substituted Collateral Bonds, having the same stated rate or rates of interest (or interest calculated in the same manner), Interest Payment Dates, stated maturity date and redemption provisions, and in the same aggregate principal amount, delivered to the Trustee pursuant to Section 4.9.

"RELEASE DATE," shall mean the date as of which all First Mortgage Bonds, other than Collateral Bonds, have been retired through payment, redemption, or otherwise (including those First Mortgage Bonds the payment for which has been provided for in accordance with the First Mortgage Indenture) at, before or after the maturity thereof provided that no Default or Event of Default has occurred and is continuing.

"RESPONSIBLE OFFICER," when used with respect to the Trustee, means any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any assistant cashier, any senior trust officer, any trust officer or assistant trust officer, the controller or any assistant controller or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

"SECURITIES" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings specified in Section 3.5.

"SIGNIFICANT SUBSIDIARY" means a Subsidiary or Subsidiaries of the Company possessing assets (including the assets of its own Subsidiaries but without regard to the Company or any other Subsidiary) having a book value, in the aggregate, equal to not less than 10% of the book value of the aggregate assets of the Company and its Subsidiaries calculated on a consolidated basis.

"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7.

"STATED MATURITY," when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.

"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a "Subsidiary" shall mean a Subsidiary of the Company.

"SUBSTITUTED COLLATERAL BONDS," shall mean any mortgage bonds issued by the Company under a Substituted Mortgage Indenture and delivered to the Trustee pursuant to Section 4.9 hereof.

"SUBSTITUTED MORTGAGE INDENTURE" shall mean a mortgage indenture of the Company designated by the Company to the Trustee as a Substituted Mortgage Indenture pursuant to Section 4.9.

"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended, as in force at the date as of which this Indenture was executed; provided, however, that in the event that such Act is amended after such date, "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as so amended.

"TRUSTEE" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

"U.S. DEPOSITARY" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more permanent global Securities, the Person designated as U.S. Depositary by the Company pursuant to Section 3.1, which must be a clearing agency registered under the Exchange Act until a successor U.S. Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "U.S. Depositary" shall mean or include each Person who is then a U.S. Depositary hereunder, and if at any time there is more than one such Person, "U.S. Depositary" shall mean the U.S. Depositary with respect to the Securities of that series.

"U.S. GOVERNMENT OBLIGATIONS" means securities which are (i) direct obligations of the United States of America 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 of America the timely payment of which is unconditionally guaranteed by the full faith and credit of the United States of America which, in either case, are not callable or redeemable at the option of the issuer thereof or otherwise subject to prepayment, and shall also include a depository receipt issued by a New York Clearing House bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment or interest on or principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt or from any amount held by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation evidenced by such depository receipt.

"VALUE" means, with respect to a Sale and Leaseback Transaction, as of any particular time, the amount equal to the greater of (i) the net proceeds of the sale and transfer of the real property leased pursuant to such Sale and Leaseback Transaction or (ii) the fair market value, in the good faith opinion of the Board of Directors of the Company, of such real property at the time of entering into such Sale and Leaseback transaction, in either case divided first by the number of full years of the term of the lease and then multiplied by the number of full years of such term remaining at the time of determination, without regard to any renewal or extension options contained in the lease.

"VICE PRESIDENT," when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president"

Section 1.2 Compliance Certificates and Opinions.

Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, other than as action permitted by Sections 2.5 and 8.4, the Company shall furnish to the Trustee an Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by

any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

a. a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

b. a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

c. a statement that, in the opinion of each such individual, 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

d. a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

Section 1.3 Form of Documents Delivered to Trustee.

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an Officer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such Officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Officer or Officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Section 1.4 Acts of Holders.

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agents duly appointed in writing; and, except as herein otherwise expressly

provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "ACT" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

(e) If the Company shall solicit from the Holders any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company may, at its option, by or pursuant to a Board Resolution, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on such record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of Outstanding Securities have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.

Section 1.5 Notices, Etc., to Trustee and Company.

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

a. the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee and received by the Trustee at its Corporate Trust Office, Attention: [Waffaa Orfy] or

b. the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this Indenture, attention:
Secretary, or at any other address previously furnished in writing to the Trustee by the Company.

Section 1.6 Notice to Holders; Waiver.

Where this Indenture or any Security provides for notice to Holders of any event, such notice shall be deemed sufficiently given (unless otherwise herein or in such Security expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders or the validity of the proceedings to which such notice relates. Where this Indenture or any Security provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Any request, demand, authorization, direction, notice, consent or waiver required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.

Section 1.7 Conflict with Trust Indenture Act.

If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or shall be excluded, as the case may be.

Section 1.8 Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 1.9 Successors and Assigns.

All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.

Section 1.10 Separability Clause.

In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 1.11 Benefits of Indenture.

Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 1.12 Governing Law.

This Indenture and the Securities shall be governed by and construed in accordance with the laws (other than the choice of law provisions) of the State of New York.

Section 1.13 Legal Holidays.

In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day or on such other day as may be set out in the Officer's Certificate pursuant to Section 3.1 at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.

Section 1.14 No Recourse Against Others.

A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder, by accepting a Security, waives and releases all such liability. Such waivers and releases are part of the consideration for the issuance of the Securities.

ARTICLE II.
SECURITY FORMS

Section 2.1 Forms Generally.

The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the Officers executing such Securities, as evidenced by their execution of the Securities. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3 for the authentication and delivery of such Securities.

The Trustee's certificates of authentication shall be in substantially the form set forth in this Article.

The definitive Securities shall be photocopied, printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Officers executing such Securities, as evidenced by their execution of such Securities.

Section 2.2 Form of Face of Security.

[If the Security is an Original Issue Discount Security, insert--FOR PURPOSES OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), THE AMOUNT OF ORIGINAL ISSUE DISCOUNT (AS DEFINED IN SECTION 1273(a)(1) OF THE CODE AND TREASURY REGULATION SECTION 1.1273-1(a) WITH RESPECT TO THIS SECURITY IS, THE ISSUE PRICE (AS DEFINED IN TREASURY REGULATION SECTION 1.1273-2) OF THIS SECURITY IS ___________, THE ISSUE DATE (AS DEFINED IN SECTION 1275(a)(2) OF THE CODE AND TREASURY REGULATION SECTION 1.1273-2) OF THIS SECURITY IS __________ AND THE YIELD TO MATURITY OF THIS SECURITY IS ____________.

MICHIGAN CONSOLIDATED GAS COMPANY
............. No.________

[$]___________

MICHIGAN CONSOLIDATED GAS COMPANY, a corporation duly organized and existing under the laws of Michigan (herein called the "Company," which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby

promises to pay to _________, or registered assigns, the principal sum of ___________ [Dollars] on ____________________ [If the Security is to bear interest prior to Maturity, insert--,and to pay interest thereon from ___________ __________________________________ or from the most recent Interest Payment Date to which interest has been paid or duly provided for,
[semi-annually] [quarterly] [monthly] on __________ and __________ in each year, commencing ______________, at the rate of _____% per annum, until the principal hereof is paid or made available for payment [If applicable insert--, and (to the extent that the payment of such interest shall be legally enforceable) at the rate of per annum on any overdue principal and premium and on any overdue installment of interest]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the _________ of ________ (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture].

[If the Security is not to bear interest prior to Maturity, insert--The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal of this Security shall bear interest at the rate of _____% per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such default in payment to the date payment of such principal has been made or duly provided for. Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal that is not so paid on demand shall bear interest at the rate of _____% per annum (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such demand for payment to the date payment of such interest has been made or duly provided for, and such interest shall also be payable on demand.]

Payment of the principal of (and premium, if any) and [if applicable, insert--any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in _________, in Dollars [if applicable, insert--; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register].

Prior to the Release Date (as hereinafter defined), the Notes will be secured by First Mortgage Bonds (the "Collateral Bonds") issued and delivered by the Company to the Trustee for the benefit of the Holders of the Securities (as defined herein), issued under the Twenty-Ninth Supplemental Indenture dated as of July 15, 1989 providing for the restatement of the Indenture of Mortgage and Deed of Trust dated as of March 1, 1944 between the Company, and Citibank, N.A. and Robert T. Kirchner (together, the "Mortgage Trustee") which became

effective on April 1. 1994, as supplemented and amended by the supplemental indentures thereto (the "First Mortgage Indenture"). Reference is made to the First Mortgage Indenture and the Indenture for a description of the rights of the Trustee as holder of the Collateral Bonds, the property mortgaged and pledged under the First Mortgage Indenture, the rights of the Company and of the Mortgage Trustee in respect thereof, the duties and immunities of the applicable Mortgage Trustee, the terms and conditions upon which the Collateral Bonds are held by the Trustee for the benefit of the Holders of Securities, and the circumstances under which additional First Mortgage Bonds may be issued.

FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN COLLATERAL BONDS) ISSUED UNDER THE FIRST MORTGAGE INDENTURE HAVE BEEN RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE FIRST MORTGAGE BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH THE FIRST MORTGAGE INDENTURE) AT, BEFORE OR AFTER THE MATURITY THEREOF PROVIDED THAT NO DEFAULT OR EVENT OF DEFAULT UNDER THE INDENTURE HAS OCCURRED AND IS CONTINUING (THE "RELEASE DATE"), THE COLLATERAL BONDS SHALL CEASE TO SECURE THE SECURITIES IN ANY MANNER, AND, AT THE OPTION OF THE COMPANY, THE SECURITIES EITHER (A) WILL BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY OR (B) WILL BE SECURED BY FIRST MORTGAGE BONDS ISSUED UNDER AN INDENTURE OTHER THAN THE FIRST MORTGAGE INDENTURE. IN CERTAIN CIRCUMSTANCES PRIOR TO THE RELEASE DATE AS PROVIDED IN THE INDENTURE, THE COMPANY IS PERMITTED TO REDUCE THE AGGREGATE PRINCIPAL AMOUNT OF AN ISSUE OF COLLATERAL BONDS HELD BY THE TRUSTEE, BUT IN NO EVENT PRIOR TO THE RELEASE DATE TO AN AMOUNT LESS THAN THE AGGREGATE PRINCIPAL AMOUNT OF THE RELATED ISSUE OF NOTES INITIALLY ISSUED CONTEMPORANEOUSLY WITH SUCH COLLATERAL BONDS.

[Include the following paragraph if the Company elects to issue Substituted Collateral Bonds (as defined in the Indenture): The Securities will be secured by First Mortgage Bonds (the "Collateral Bonds") delivered by the Company to the Trustee for the benefit of the Holders of the Securities, issued under [the Substituted Mortgage Indenture (as defined in the Indenture)] from the Company to _____________________, as trustee (the "Mortgage Trustee"). Reference is made to the Substituted Mortgage Indenture and the Indenture for a description of the rights of the Trustee as holder of the Substituted Collateral Bonds, the property mortgaged and pledged under the Substituted Mortgage Indenture, the rights of the Company and of the Mortgage Trustee in respect thereof, the duties and immunities of the Mortgage Trustee, the terms and conditions upon which the Substituted Collateral Bonds are secured and the circumstances under which additional Substituted Collateral Bonds may be issued.]

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

MICHIGAN CONSOLIDATED GAS
COMPANY

By_____________________________

Attest: ____________________

[SEAL]

Section 2.3 Form of Reverse of Security.

This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of June 1, 1998 (herein called the "Indenture"), between the Company and Citibank, N.A., as Trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [, limited in aggregate principal amount to $ ].

[If applicable, insert -- The Securities of this series are subject to redemption upon not less than 30 nor more than 45 days' notice by first class mail, [if applicable, insert--(1) on _____ in any year commencing with the year ______ and ending with the year ______ through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [on or after ________, _________] as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount):

If redeemed [on or before ______________________, ____%, and if redeemed] during the 12-month period beginning ______________________ of the years indicated,

Redemption

Year

Price

Year

Price

____ __________ and thereafter at a Redemption Price equal to ____% of the principal amount, together in the case of any such redemption [if applicable, insert -- (whether through operation of the sinking fund or otherwise)] with accrued and unpaid interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

[If applicable, insert -- The Securities of this series are subject to redemption upon not less than 30 nor more than 45 days' notice by first class mail, (1) on in any year commencing with the year ________________ and ending with the year ______ through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [on or after ], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below:

If redeemed during a 12-month period beginning ___________________ of the years indicated,

Redemption Price

For Redemption

Redemption Price for

Through Operation

Redemption Otherwise

of the

Than Through Operation Year

Sinking Fund

of the Sinking Fund _____________

and thereafter at a Redemption Price equal to __% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued and unpaid interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

[Notwithstanding the foregoing, the Company may not, prior to ________, redeem any Securities of this series as contemplated by [clause (2) of] the preceding. paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than ____% per annum.]

[The sinking fund for this series provides for the redemption on ________ in each year beginning with the year _______ and ending with the year ________ of [not less than] $__________ [("mandatory sinking fund") and not more than $___________] aggregate principal amount of Securities of this series.]
[Securities of this series acquired or redeemed by the Company otherwise than through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made--in the
[inverse] order in which they become due.]

[In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]

[If the Security is not an Original Issue Discount Security, insert -- If any Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.] [If the Security is an Original Issue Discount Security, insert -- If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal--insert formula for determining the amount.] Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal and overdue interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company's

obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.

[This Security is subject to Defeasance as described in the Indenture.]

The Indenture may be modified by the Company and the Trustee without consent of any Holder with respect to certain matters as described in the Indenture. In addition, the Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of a majority in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall bind such Holder and all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if any) and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series, of authorized denominations and for the same Stated Maturity and aggregate principal amount, will be issued to the designated transferee or transferees.

The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series of a different authorized denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this

Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

The Indenture imposes certain limitations on the ability of the Company to, among other things, merge or consolidate with any other Person or sell, assign, transfer or lease all or substantially all of its properties or assets
[If other covenants are applicable pursuant to the provisions of Section 3.1, insert here]. All such covenants and limitations are subject to a number of important qualifications and exceptions. The Company must report periodically to the Trustee on compliance with the covenants in the Indenture.

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

[If applicable, insert -- Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures ("CUSIP"), the Company has caused CUSIP numbers to be printed on the Securities of this series as a convenience to the Holders of the Securities of this series. No representation is made as to the correctness or accuracy of such numbers as printed on the Securities of this series and reliance may be placed only on the other identification numbers printed hereon.]

All capitalized terms used in this Security without definition which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

ASSIGNMENT FORM

To assign this Security, fill in the form below: (I) or (we) assign

and transfer this Security to

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

(Print or type assignee's name, address and zip code) and irrevocably appoint

_________________________________________________________________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated: __________________________

Your Signature: _________________________________

(Sign exactly as your name appears on the other side of this Security)

Signature Guaranty:_____________________________________________________________

[Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Transfer Agent, which requirements will include membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Transfer Agent in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act.] Social Security Number or Taxpayer Identification Number:

Section 2.4 Form of Trustee's Certificate of Authentication.

Dated: ______________________

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

As Trustee

Authorized Signatory

Section 2.5 Securities in Global Form.

If Securities of a series are issuable in global form, as contemplated by Section 3.1, then, notwithstanding the provisions of Section 3.2, any such Security shall represent such of the Outstanding Securities of such series as shall be specified therein and may provide that it shall represent the aggregate amount of Outstanding Securities from time to time endorsed thereon and that the aggregate amount of Outstanding Securities represented thereby may from time to time be reduced to reflect exchanges. Any endorsement of a Security in global form to reflect the amount, or any increase or decrease in the amount, of Outstanding Securities represented thereby shall be made in such manner and upon instructions given by such Person or Persons as shall be specified therein or in the Company Order to be delivered to the Trustee pursuant to Section 3.3 or
Section 3.4. Subject to the provisions of Section 3.3 and, if applicable,
Section 3.4, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified therein or in the applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4 has been, or simultaneously is, delivered, any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing but need not comply with Section 1.2 and need not be accompanied by an Opinion of Counsel.

The provisions of Section 3.9 shall apply to any Security represented by a Security in global form if such Security was never issued and sold by the Company and the Company

delivers to the Trustee the Security in global form together with written instructions (which need not comply with Section 1.2 and need not be accompanied by an Opinion of Counsel) with regard to the reduction in the principal amount of Securities represented thereby.

Notwithstanding the provisions of Sections 2.1 and 3.7, unless otherwise specified as contemplated by Section 3.1, payment of principal of, premium, if any, and interest on any Security in permanent global form shall be made to the Person or Persons specified therein.

Notwithstanding the provisions of Section 3.8 and except as provided in the preceding paragraph, the Company, the Trustee and any agent of the Company and the Trustee shall treat a Person as the Holder of such principal amount of Outstanding Securities represented by a permanent global Security as shall be specified in a written statement of the Holder of such permanent global Security.

Section 2.6 CUSIP Number.

The Company in issuing Securities of any series may use a "CUSIP" number, and, if so, the Trustee may use the CUSIP number in notices of redemption or exchange as a convenience to Holders of such series; provided, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number printed on the notice or on the Securities of such series, and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the CUSIP number of any series of Securities.

Section 2.7 Form of Legend for the Securities in Global Form.

Any Security in global form authenticated and delivered hereunder shall bear a legend in substantially the following form:

"This Security is in global form within the meaning of the Indenture hereinafter referred to and is registered in the name of a Common Depositary or a U.S. Depositary. Unless and until it is exchanged in whole or in part for Securities in certificated form, this Security may not be transferred except as a whole by the Common Depositary or a U.S. Depositary or by a nominee of the Common Depositary or a nominee of the U.S. Depositary as the case may be."

ARTICLE III.
THE SECURITIES

Section 3.1 Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

The Securities may be issued from time to time in one or more series. There shall be established in or pursuant to a Board Resolution, and set forth in an Officer's Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series:

(1) the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities);

(2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Sections 3.4, 3.5, 3.6, 10.6 or 12.7);

(3) whether any Securities of the series are to be issuable in permanent global form with or without coupons and, if so, (i) whether beneficial owners of interests in any such permanent global Security may exchange such interests for Securities of such series and of like tenor of any authorized form and denomination and the circumstances under which any such exchanges may occur, if other than in the manner provided in Section 3.5, and (ii) the name of the Common Depositary (as defined in Section 3.4) or the U.S. Depositary, as the case may be, with respect to any global Security;

(4) the date or dates on which the principal of the Securities of the series is payable;

(5) the rate or rates at which the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the Regular Record Date for the interest payable on any Interest Payment Date and, if applicable to such series of Securities, the basis points and United States Treasury rate(s) and any other rates to be used in calculating the reset rate;

(6) the place or places where the principal of (and premium, if any) and interest on Securities of the series shall be payable;

(7) the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company, pursuant to any sinking fund or otherwise;

(8) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation, and, where applicable, the obligation of the Company to select the Securities to be redeemed;

(9) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable;

(10) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.2;

(11) additional Events of Default with respect to Securities of the series, if any, other than those set forth herein;

(12) if either or both of Section 14.2 and Section 14.3 shall be inapplicable to the Securities of the series (provided that if no such inapplicability shall be specified, then both Section 14.2 and
Section 14.3 shall be applicable to the Securities of the series);

(13) if other than U.S. dollars, the currency or currencies or units based on or related to currencies in which the Securities of such series shall be denominated and in which payments or principal of, and any premium and interest on, such Securities shall or may by payable;

(14) additional covenants with respect to Securities of the series, if any, other than those set forth herein;

(15) if prior to the Release Date, the designation of the Related Issue of Collateral Bonds being delivered to the Trustee in connection with the issuance of such Securities,

(16) if on or after the Release Date, the designation of the Related Issue of Substituted Collateral Bonds, if any,

(17) if other than the Trustee, the identity of the Registrar and any Paying Agent; and

(18) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture).

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such Board Resolution and set forth in such Officer's Certificate or in any such Indenture supplemental hereto.

If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officer's Certificate setting forth, or providing the manner for determining, the terms of the Securities of such series.

Section 3.2 Denominations.

The Securities of each series shall be issuable in registered form without coupons in such denominations as shall be specified as contemplated by
Section 3.1. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof.

Section 3.3 Execution, Authentication, Delivery and Dating.

The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or one of its Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. The seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Securities. Typographical and other minor errors or defects in any such reproduction of the seal or any such signature shall not affect the validity or enforceability of any Security that has been duly authenticated and delivered by the Trustee.

Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and make such Securities available for delivery. If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Sections 315(a) through (d) of the Trust Indenture Act) shall be fully protected in relying upon, an Opinion of Counsel stating,

(a) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 2.1, that such form has been established in conformity with the provisions of this Indenture;

(b) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 3.1, that such terms have been established in conformity with the provisions of this Indenture;

(c) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, except to the extent enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors' rights generally and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law); and

(d) if prior to the Release Date, that the Related Issue of Collateral Bonds being delivered to the Trustee in connection with the issuance of such Securities when authenticated and delivered by the Mortgage Trustee and issued by the Company in the

manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, enforceable in accordance with their terms, except to the extent enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors' rights generally and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and except as enforcement of provisions thereof may be limited by state laws affecting the remedies for the enforcement of the security provided for in the First Mortgage Indenture; and that such Collateral Bonds are entitled to the benefit of the applicable First Mortgage Indenture, equally and ratably, with all First Mortgage Bonds and other Collateral Bonds (if any) outstanding under the applicable First Mortgage Indenture, except as to sinking fund provisions;

(e) if any Collateral Bonds are to be delivered, that the Related Issue of Collateral Bonds being delivered to the Trustee in connection with the issuance of such Securities when authenticated and delivered by the Mortgage Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding obligations of the Company, enforceable in accordance with their terms, except to the extent enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors' rights generally and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law) and except as enforcement of provisions thereof may be limited by state laws affecting the remedies for the enforcement of the security provided for in the Substituted Mortgage Indenture; and that such Substituted Collateral Bonds are entitled to the benefit of the Substituted Mortgage Indenture, equally and ratably, with all Substituted Collateral Bonds (if any) outstanding thereunder, except as to sinking fund provisions;

(f) that no consent, approval, authorization, order, registration or qualification of or with any court or any governmental agency or body having jurisdiction over the Company is required for the execution and delivery of such Securities by the Company, except such as have been obtained (except that no opinion need be expressed as to state securities or Blue Sky laws). If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonable acceptable to the Trustee, or in the written opinion of counsel to the Trustee (which counsel may be an employee of the Trustee) such authentication may not lawfully be made or would involve the Trustee in personal liability.

Notwithstanding the provisions of Section 3.1 and of the immediately preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officer's Certificate otherwise required pursuant to Section 3.1 or the Company

Order and Opinion of Counsel otherwise required pursuant to the immediately preceding paragraph at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.

If the Company shall establish pursuant to Section 3.1 that the Securities of a series are to be issued in the form of one or more global Securities, then the Company shall execute and the Trustee shall, in accordance with this Section and the Company Order with respect to the authentication and delivery of such series, authenticate and deliver one or more global Securities that (i) shall be in an aggregate amount equal to the aggregate principal amount specified in such Company Order, (ii) shall be registered in the name of the Common Depositary or U.S. Depositary, as the case may be, therefor or its nominee, and (iii) shall be made available for delivery by the Trustee to such depositary or pursuant to such depositary's instruction.

Each depositary designated pursuant to Section 3.1 must, at the time of its designation and at all times while it serves as depositary, be a clearing agency registered under the Exchange Act and any other applicable statute or regulation.

Unless otherwise provided for in the form of Security, each Security shall be dated the date of its authentication.

No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture.

Section 3.4 Temporary Securities.

Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and make available for delivery, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.

In the case of Securities of any series, such temporary Securities may be in global form, representing all or a portion of the Outstanding Securities of such series.

Except in the case of temporary Securities in global form (which shall be exchanged in accordance with the provisions of Section 3.5); if temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more

temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a like principal amount of definitive Securities of the same series of authorized denominations and of like tenor. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series.

If temporary Securities of any series are issued in global form, any such temporary global Security shall, unless otherwise provided therein, be delivered to the office of a depositary or common depositary (the "COMMON DEPOSITARY") for credit to the respective accounts of the beneficial owners of such Securities (or to such other accounts as they may direct).

Section 3.5 Registration, Registration of Transfer and Exchange.

The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the "SECURITY REGISTER") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of registration of transfers of Securities. The Trustee is hereby appointed "SECURITY REGISTRAR" for the purpose of registering Securities and transfers of Securities as herein provided.

Upon surrender for registration of transfer of any Security of any series at the office or agency of the Company in Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and make available for delivery, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of alike aggregate principal amount and Stated Maturity.

At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of alike aggregate principal amount and Stated Maturity, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and make available for delivery, the Securities which the Holder making the exchange is entitled to receive.

Notwithstanding the foregoing, except as otherwise specified as contemplated by Section 3.1, any permanent global Security shall be exchangeable only as provided in this paragraph. If the beneficial owners of interests in a permanent global Security are entitled to exchange such interests for Securities of such series and of like tenor and principal amount of another authorized form and denomination, as specified and as subject to the conditions contemplated by
Section 3.1, then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Securities of that series in aggregate principal amount equal to the principal amount of such permanent global Security, executed by the Company. On or after the earliest date on which such interests may be so exchanged, such permanent global Securities shall be surrendered from time to time by the Common Depositary or the U.S. Depositary, as the case may be, and in accordance with instructions given to the Trustee and the Common Depositary or the U.S. Depositary, as the case may be (which instructions shall be in writing but need not

comply with Section 1.2 or be accompanied by an Opinion of Counsel), as shall be specified in the Company Order with respect thereto to the Trustee, as the Company's agent for such purpose, to be exchanged, in whole or in part, for definitive Securities of the same series without charge. The Trustee shall authenticate and make available for delivery, in exchange for each portion of such surrendered permanent global Security, a like aggregate principal amount of definitive Securities of the same series of authorized denominations and of like tenor as the portion of such permanent global Security to be exchanged which shall be in the form of the Securities of such series; provided, however, that no such exchanges may occur during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 12.3 and ending at the close of business on the day of such mailing. Promptly following any such exchange in part, such permanent global Security shall be returned by the Trustee to the Common Depositary or the U.S. Depositary, as the case may be, or such other Common Depositary or U.S. Depositary referred to above in accordance with the written instructions of the Company referred to above. If a Security in the form specified for such series is issued in exchange for any portion of a permanent global Security after the close of business at the office or agency where such exchange occurs on (i) any Regular Record Date and before the opening of business at such office or agency on the relevant Interest Payment Date, or (ii) any Special Record Date and before the opening of business at such office or agency on the related proposed date for payment of interest or Defaulted Interest, as the case may be, such interest or Defaulted Interest will not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of such Security in the form specified for such series, but will be payable on such Interest Payment Date or proposed date for payment, as the case may be, only to the Person to whom interest in respect of such portion of such permanent global Security is payable in accordance with the provisions of this Indenture.

All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.

Unless otherwise provided in the Securities to be transferred or exchanged, no service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.4, 10.6 or 12.7 not involving any transfer.

The Company shall not be required (i) to issue, register the transfer of or exchange Securities of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 12.3 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities.

If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.

Section 3.7 Payment of Interest; Interest Rights Preserved.

Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "DEFAULTED INTEREST") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:

(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Section 3.7 provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).

(2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Section 3.7, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

Section 3.8 Persons Deemed Owners.

Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 3.7) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

None of the Company, the Trustee or any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interest of a Security in global form, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest. Notwithstanding the foregoing, with respect to any Security in global form, nothing herein shall prevent the Company or the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by any Common Depositary (or its nominee), as a Holder, with respect to such Security in global form or impair, as between such Common Depositary and owners of beneficial interests in such Security in global form, the operation of customary practices governing the exercise of the right of such Common Depositary (or its nominee) as holder of such Security in global form.

Section 3.9 Cancellation.

All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities shall be held by the Trustee and may be destroyed (and, if so destroyed, certification of their destruction shall be delivered to the Company, unless, by a Company Order, the Company shall direct that cancelled Securities be returned to it).

Section 3.10 Computation of Interest.

Except as otherwise specified as contemplated by Section 3.1 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a year of twelve 30-day months.

ARTICLE IV.
COLLATERAL BONDS;
SUBSTITUTED COLLATERAL BONDS

Section 4.1 Collateral Bonds Held by the Trustee.

The Trustee, as a Holder of Collateral Bonds, shall attend any meeting of Bondholders under the First Mortgage Indenture as to which it receives due notice, or, at its option, shall deliver its proxy in connection therewith. Either at such meeting, or otherwise where consent of Holders of First Mortgage Bonds issued under the First Mortgage Indenture is sought without a meeting, the Trustee shall vote all of the Collateral Bonds held by it, or shall consent or withhold its consent with respect thereto, as directed by the Holders of not less than a majority in the aggregate principal amount of the outstanding Notes; provided, however, that the Trustee shall not be required to vote as such Holders of any particular issue of Collateral Bonds in favor of, or give its consent to, any action except upon notification by the Trustee to the Holders of the

related issue of Securities of such proposal and consent thereto of the Holders of not less than a majority in aggregate principal amount of the outstanding Securities of such issue.

Section 4.2 No Transfer of Collateral Bonds; Exception.

Except as required to effect an assignment to a successor trustee under this Indenture or pursuant to Section 4.3 or Section 4.5, the Trustee shall not sell, assign or transfer the Collateral Bonds and the Company shall issue stop transfer instructions to the Mortgage Trustee and any transfer agent under the First Mortgage Indenture to effect compliance with this Section 4.2.

Section 4.3 Delivery to the Company of All Collateral Bonds.

When the obligation of the Company to make payment with respect to the principal of and premium, if any, and interest on any series of Collateral Bonds shall cease and be discharged pursuant to Section 4.8 or Section 5.1, the Trustee shall, upon written request of the Company, deliver to the Company all of such Collateral Bonds, together with such appropriate instruments of transfer or release as may be reasonably requested by the Company. All Collateral Bonds delivered to the Company in accordance with this Section 4.3 shall be delivered by the Company to the Mortgage Trustee for cancellation.

Section 4.4 Further Assurances.

The Company, at its own expense, shall do such further lawful acts and things, and execute and deliver such additional conveyances, assignments, assurances, agreements and instruments, as may be necessary in order to better assign, assure and confirm to the Trustee its interest in the Collateral Bonds and for maintaining, protecting and preserving such interest. The Trustee may petition any courts of competent jurisdiction to seek any relief it considers necessary or advisable in order to maintain, protect and preserve such interest.

Section 4.5 Exchange and Surrender of Collateral Bonds.

At any time at the written direction of the Company, the Trustee shall surrender to the Company all or part of the Collateral Bonds in exchange for Collateral Bonds equal in aggregate outstanding principal amounts to, in different denominations than, but of the same series and with all other terms identical to, the Collateral Bonds so surrendered to the Company. In addition, at any time a Security shall cease to be entitled to any benefit or security under this Indenture pursuant to Section 5.1, the Trustee shall surrender an equal principal amount of the Related Issue of Collateral, subject to the limitations of this Section 4.5, to the Company for cancellation. The Trustee shall, together with such Collateral Bonds, deliver to the Company such appropriate instruments of transfer, and such appropriate instruments for releasing the Company of its obligations under such surrendered Collateral Bonds, as the Company may reasonably request. Prior to the surrender required by this paragraph, the Trustee shall receive from the Company, and (subject to
Section 9.1) shall be fully protected in relying upon, an Officers' Certificate stating (i) the aggregate outstanding principal amount of the Collateral Bonds of the issue surrendered by the Trustee, after giving effect to such surrender,
(ii) the aggregate outstanding principal amount of the related issue of Securities, (iii) that the surrender of the Collateral Bonds will not result in any default under this Indenture, and (iv) that any

Collateral Bonds to be received in exchange for the Collateral Bonds being surrendered comply with the provisions of this Section 4.7 and the First Mortgage Indenture. The Company shall not be permitted to cause the surrender or exchange of all or any part of an issue of Collateral Bonds contemplated in this
Section 4.5, if after such surrender or exchange, the aggregate outstanding principal amount of the related issue of Securities would exceed the aggregate outstanding principal amount of such issue of Collateral Bonds held by the Trustee. Any Collateral Bonds received by the Company pursuant to this Section 4.5 shall be delivered to the Mortgage Trustee for cancellation.

Section 4.6 Acceptance of Additional Collateral Bonds.

Upon the issuance of Securities hereunder at any time prior to the Release Date, the Company shall issue and deliver to the Trustee to hold in trust for the benefit of the Holders of the Securities as described in Section 4.8, and the Trustee shall accept therefor, a Related Issue of Collateral Bonds registered in the name of the Trustee conforming to the requirements of Section 4.7.

Section 4.7 Terms of Collateral Bonds.

Each issue of Collateral Bonds delivered to the Trustee pursuant to
Section 4.6 shall have the same stated rate or rates of interest (or interest calculated in the same manner), Interest Payment Dates, stated maturity date and redemption provisions, and shall be in the same aggregate principal amount, as the issue of Securities in connection with which such Collateral Bonds shall have been issued and delivered.

Section 4.8 Collateral Bonds as Security for Securities; Application of Payment on Collateral Bonds.

Until the Release Date and subject to Article Five, the Related Issue of Collateral Bonds delivered to the Trustee, in trust for the benefit of the Holders of the applicable issue of Securities shall pay principal of, interest and premium, if any, in accordance with their respective terms and shall serve as security for any and all obligations of the Company under such Securities, including, but not limited to (1) the full and prompt payment of the principal of and premium, if any, on such related issue of Securities when and as the same shall become due and payable in accordance with the terms and provisions of this Indenture or such related issue of Securities, either at the stated maturity thereof upon acceleration of the maturity thereof or upon redemption (any such payment with respect to such related issue of Securities to be made by the Company through payment on the related issue of Collateral Bonds and applied by the Trustee to satisfy the Company's corresponding obligations under such Securities), and (2) the full and prompt payment of any interest on such related issue of Securities when and as the same shall become due and payable in accordance with the terms and provisions of this Indenture or such related issue of Securities. Any payment by the Company of principal of, premium, if any, and interest on, a series of First Mortgage Bonds will be applied by the Trustee to satisfy the Company's obligations with respect to the principal of, premium, if any, and interest on, the related issue of Securities. Notwithstanding anything in this Indenture to the contrary, from and after the Release Date, the obligation of the Company to make payment with respect to the principal of and premium, if any, and interest on the Collateral Bonds shall cease and be

discharged as provided in the supplemental trust indenture or indentures to the First Mortgage Indenture creating such Collateral Bonds and the Collateral Bonds shall cease to secure in any manner Securities theretofore or subsequently issued. From and after the Release Date, any conditions to the issuance of Securities that refer or relate to Collateral Bonds or the First Mortgage Indenture shall be inapplicable. Following the Release Date, the Company shall cause the First Mortgage Indenture to be closed and the Company shall not issue any additional First Mortgage Bonds or Collateral Bonds under the First Mortgage Indenture. Notice of the occurrence of the Release Date shall be given by the Trustee to the Holders of the Securities in the manner provided in Section 1.6 not later than 30 days after the Company notifies the Trustee of the occurrence of the Release Date.

Section 4.9 Substituted Collateral Bonds.

(a) The Company shall notify the Trustee not less than 90 days prior to the Release Date that the Company has determined to deliver to the Trustee on the Release Date Substituted Collateral Bonds in an aggregate principal amount equal to the aggregate principal amount of Securities outstanding on the Release Date in trust for the benefit of the Holders from time to time of the Securities issued under this Indenture as security for any and all obligations of the Company under the Securities, including but not limited to, (1) the full and prompt payment of the principal of and premium, if any, on the Securities when and as the same shall become due and payable in accordance with the terms and provisions of this Indenture or the Securities, either at the stated maturity thereof, upon acceleration of the maturity thereof or upon redemption, and (2) the full and prompt payment of any interest on the Securities when and as the same shall become due and payable in accordance with the terms and provisions of this Indenture or the Securities.

(b) The Substituted Collateral Bonds to be delivered pursuant to the notice described in Section 4.9(a) shall be delivered in separate series and issues corresponding to the series and issues of Securities outstanding on the Release Date, each issue of Substituted Collateral Bonds having the same stated rate or rates of interest (or interest calculated in the same manner), Interest Payment Dates, stated maturity date and redemption provisions, and in the same aggregate principal amount, as the related issue of Securities outstanding on the Release Date.

(c) The notice described in Section 4.9(a) shall also state that on the Release Date the Company shall deliver to the Trustee a supplemental indenture to this Indenture that will provide, among other things, that upon the issuance of Securities hereunder on or after the Release Date, the Company shall deliver to the Trustee in trust for the benefit of the Holders as described in Section 4.9(a), and the Trustee shall accept therefor, a Related Issue of Substituted Collateral Bonds registered in the name of the Trustee and conforming to the requirements therein specified.

(d) The determination whether to issue and deliver Substituted Collateral Bonds shall be made in the Company's sole discretion and without any obligation to do so.

(e) In the event that the Company does not deliver the notice described in Section 4.9(a), the Securities outstanding on the Release Date shall, as of the Release Date, no longer be

entitled to the benefit of the security of the Collateral Bonds and shall thereafter be general unsecured obligations of the Company.

ARTICLE V.
SATISFACTION AND DISCHARGE

Section 5.1 Satisfaction and Discharge of Indenture.

This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for or in the form of Security for such series), when the Trustee, upon Company Request and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.6 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 11.9) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation

(i) have become due and payable, or

(ii) will become due and payable at their Stated Maturity within one year, or

(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or the Stated Maturity or Redemption Date, as the case may be;

(2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and

(3) the Company has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture have been complied with.

Upon a Security ceasing to be entitled to any lien, benefit or security under this Indenture, the obligation of the Company to make payment with respect to principal of and premium, if any, and interest on a principal amount of the Related Issue of Collateral Bonds or the Related Issue of Substituted Collateral Bonds equal to the principal amount of such Note shall be satisfied and discharged and such portion of the principal amount of such Collateral Bonds or Substituted Collateral Bonds shall cease to secure the Securities in any manner.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.7, the obligations of the Company to any Authenticating Agent under Section 7.14 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section 5.1, the obligations of the Trustee under Section 5.2 and the last paragraph of Section 11.9 shall survive.

Section 5.2 Application of Trust Money.

Subject to the provisions of the last paragraph of Section 11.9, all money deposited with the Trustee pursuant to Section 5.1 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with or received by the Trustee.

ARTICLE VI.
REMEDIES

Section 6.1 Events of Default.

"EVENT OF DEFAULT," wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or to be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) the Company defaults in the payment of interest on any Security of that series when such interest becomes due and payable and the default continues for a period of 30 days; or

(2) the Company defaults in the payment of the principal of (or premium, if any, on) any Security of that series when the same becomes due and payable at Maturity, upon redemption (including redemptions under Article Twelve), or otherwise; or

(3) the Company fails to observe or perform any of its other covenants, warranties or agreements in the Securities of that series or this Indenture (other than a covenant, agreement or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and the failure to observe or perform continues for the period and after the notice specified in the last paragraph of this Section; or

(4) prior to the Release Date, a default (as defined in the First Mortgage Indenture under which Collateral Bonds are outstanding) has occurred and is continuing, and the Mortgage Trustee or Holders of at least a majority in aggregate principal amount of the Securities at the time outstanding shall have given written notice thereof to the Trustee; or

(5) if any Substituted Collateral Bonds are outstanding, a default (as defined in the Substituted Mortgage Indenture) has occurred and is continuing, and the Mortgage Trustee or Holders of at least a majority in aggregate principal amount of the Securities at the time outstanding shall have given written notice thereof to the Trustee; or

(6) any Event of Default under any series of Securities issued pursuant to this Indenture or any event of default, as defined in any other indenture, mortgage or instrument under which there may be issued, or by which there may be secured or evidenced, any Indebtedness of the Company (whether such Indebtedness now exists or shall hereafter be created or incurred), but excluding Project Finance Indebtedness, shall occur and shall consist of default in the payment of such Indebtedness at the maturity thereof (after giving effect to any applicable grace period) or shall result in Indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable, and such default in payment is not cured or such acceleration shall not be rescinded or annulled within 10 days after written notice to the Company from the Trustee or to the Company and to the Trustee from the Holders of at least 10% in aggregate principal amount of the Securities of that series at the time outstanding; provided that it shall not be an Event of Default if the principal amount of Indebtedness (other than Indebtedness represented by Securities issued pursuant to this Indenture) which is not paid at maturity or the maturity of which is accelerated is less than the amount equal to 1% of the Company's consolidated total assets (determined as of its most recent fiscal year-end); provided further that if, prior to a declaration of acceleration of the maturity of the Securities of that series or the entry of judgment in favor of the Trustee in a suit pursuant to Section 6.3, such default shall be remedied or cured by the Company or waived by the holders of such Indebtedness, then the Event of Default hereunder by reason thereof shall be deemed likewise to have been thereupon remedied, cured or waived without further action upon the part of either the Trustee or any of the Holders of the Securities of that series, and provided further, that, subject to Sections 7.1 and 7.2, the Trustee shall not be charged with knowledge of any such default unless written notice of such default shall have been given to the Trustee by the Company, by a holder or an agent of a holder of any such Indebtedness, by the trustee then acting under any indenture or other instrument under which such default shall have occurred, or by the Holders of at least five percent in aggregate principal amount of the Securities of that series at the time outstanding; or

(7) the Company pursuant to or within the meaning of any Bankruptcy Law (A) commences a voluntary case or proceeding under any Bankruptcy Law with respect to itself, (B) consents to the entry of a judgment. decree or order for relief against it in an involuntary case or proceeding under any Bankruptcy Law, (C) consents to or acquiesces in the institution of bankruptcy or insolvency proceedings against it, (D) applies for, consents to or acquiesces in the appointment of or taking possession by a Custodian of the Company or for any material part of its property, (E) makes a general assignment for the benefit of its creditors or (F) takes any corporate action in furtherance of or to facilitate, conditionally or otherwise, any of the foregoing; or

(8) (i) a court of competent jurisdiction enters a judgment, decree or order for relief in respect of the Company in an involuntary case or proceeding under any

Bankruptcy Law which shall (A) approve as properly filed a petition seeking reorganization, arrangement, adjustment or composition in respect of the Company, (B) appoint a Custodian of the Company or for any material part of its property or (C) order the winding-up or liquidation of its affairs, and such judgment, decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or
(ii) any bankruptcy or insolvency petition or application is filed, or any bankruptcy or insolvency proceeding is commenced against the Company and such petition, application or proceeding is not dismissed within 60 days; or (iii) a warrant of attachment is issued against any material portion of the property of the Company which is not released within 60 days of service; or

(9) any other Event of Default provided with respect to Securities of that series.

A Default under clause (3) above is not an Event of Default until the Trustee or the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of that series notify the Company of the Default and the Company does not cure the Default within 60 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." When a Default under clause (3) above is cured within such 60-day period, it ceases.

Section 6.2 Acceleration of Maturity; Rescission and Annulment.

If an Event of Default with respect to Securities of any series (other than an Event of Default specified in clause (7) or (8) of Section 6.1) occurs and is continuing, the Trustee by notice in writing to the Company, or the Holders of at least 25% in aggregate principal amount of the Outstanding Securities of that series by notice in writing to the Company and the Trustee, may declare the unpaid principal of and accrued interest to the date of acceleration (or, if the Securities of that series are Original Issue Discount Securities, such portion of the principal amount as may be specified in the terms of that series) on all the Outstanding Securities of that series to be due and payable immediately and, upon any such declaration, the Outstanding Securities of that series (or specified principal amount) shall become and be immediately due and payable.

If an Event of Default specified in clause (7) or (8) of Section 6.1 occurs, all unpaid principal of and accrued interest on the Outstanding Securities of that series (or specified principal amount) shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of any Security of that series. In addition, the Trustee shall immediately file with the Mortgage Trustee a written demand for redemption of all Collateral Bonds pursuant to the applicable provisions of the First Mortgage Indenture or, if applicable, a written demand for redemption of all Substituted Collateral Bonds pursuant to the applicable provisions of the Substituted Mortgage Indenture.

Upon payment of all such principal and interest, all of the Company's obligations under the Securities of that series and (upon payment of the Securities of all series) this Indenture shall terminate, except obligations under Section 7.7.

The Holders of a majority in principal amount of the Outstanding Securities of that series by notice to the Trustee may rescind an acceleration and its consequences (including, if given, the written demand for redemption of all Collateral Bonds or, if applicable, all Substituted Collateral Bonds), if
(i) all existing Events of Default, other than the nonpayment of the principal and interest of the Securities of that series that has become due solely by such declaration of acceleration, have been cured or waived, (ii) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal that has become due otherwise than by such declaration of acceleration have been paid, (iii) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (iv) all payments due to the Trustee and any predecessor Trustee under Section 6.7 have been made.

Section 6.3 Collection of Indebtedness and Suits for Enforcement by Trustee.

The Company covenants that if:

(1) default is made in the payment of any interest on any Security of any series when such interest becomes due and payable and such default continues for a period of 30 days, or

(2) default is made in the payment of the principal of (or premium, if any, on) any Security of any series at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the reasonable costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated.

If an Event of Default hereunder occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights, including its rights as holder of the Collateral Bonds or the Substituted Collateral Bonds, and the rights of the Holders of Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to secure any other proper remedy.

Section 6.4 Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (i) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Securities and to file such 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 agent and counsel) and of the Holders allowed in such judicial .proceedings, and (ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder 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 Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.5 Trustee May Enforce Claims Without Possession of Securities.

All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

Section 6.6 Application of Money Collected.

Any money collected by the Trustee pursuant to this Article in respect of the Securities of any series shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities in respect of which moneys have been collected and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

First: To the payment of all amounts due the Trustee under Section 7.7 applicable to such series;

Second: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest on the Securities of such series in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities of such series for principal (and premium, if any) and interest, respectively; and

Third: To the Company.

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.6. At least fifteen (15) days before such record date, the Trustee shall mail to each Holder and the Company a notice that states the record date, the payment date and the amount to be paid.

Section 6.7 Limitation on Suits.

No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;

(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request;

(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more of Holders of Securities of any series shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all Holders of Securities of the affected series.

Section 6.8 Unconditional Right of Holders to Receive.

Principal, Premium and Interest.

Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and

premium, if any) and (subject to Section 3.7) interest on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.

Section 6.9 Restoration of Rights and Remedies.

If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this 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, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall 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 has been instituted.

Section 6.10 Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.16, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.11 Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

Section 6.12 Control by Holders.

The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to 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 the Trustee, with respect to the Securities of such series, provided that:

(1) such direction shall not be in conflict with any rule of law or with this Indenture;

(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; and

(3) subject to Section 7.1, the Trustee need not take any action which might involve the Trustee in personal liability or be unduly prejudicial to the Holders not joining therein.

Section 6.13 Waiver of Past Defaults.

The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may by written notice to the Trustee on behalf of the Holders of all the Securities of such series waive any Default or Event of Default with respect to such series and its consequences, except a Default or Event of Default (1) in respect of the payment of the principal of (or premium, if any) or interest on any Security of such series, or (2) in respect of a covenant or other provision hereof which under Article Ten cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

Upon any such waiver, such Default or Event of Default shall cease to exist and shall be deemed to have been cured, for every purpose of this Indenture and the Securities of such series; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

Section 6.14 Undertaking for Costs.

All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, 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, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date).

ARTICLE VII.
THE TRUSTEE

Section 7.1 Certain Duties and Responsibilities of the Trustee.

(a) Except during the continuance of an Event of Default, the Trustee's duties and responsibilities under this Indenture shall be governed by Section 315(a) of the Trust Indenture Act.

(b) In case an Event of Default has occurred and is continuing, and is known to the Trustee, the Trustee shall exercise the rights and powers vested in it by this Indenture, and shall 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.

Section 7.2 Notice of Defaults.

Within 30 days after the occurrence of any Default or Event of Default with respect to the Securities of any series, the Trustee shall give to all Holders of Securities of such series, as their names and addresses appear in the Security Register, notice of such Default or Event of Default known to the Trustee, unless such Default or Event of Default shall have been cured or waived; provided, however, that, except in the case of a Default or Event of Default in the payment of the principal of (or premium, if any) or interest on any Security of such series or in the payment of any sinking fund installment with respect to Securities of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or directors or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holders of Securities of such series.

Section 7.3 Certain Rights of Trustee.

Subject to the provisions of the Trust Indenture Act:

(a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report. notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution;

(c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer's Certificate;

(d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

(e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity to its reasonable satisfaction against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(f) prior to the occurrence of an Event of Default with respect to the Securities of any series and after the curing or waiving of all such Events of Default which may have occurred, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,

order, approval or other paper or document, or the books and records of the Company, unless requested in writing to do so by the Holders of a majority in principal amount of the Outstanding Securities of any series; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is not, in the opinion of the Trustee, reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a condition to so proceeding; the reasonable expense of every such investigation shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand;

(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and

(h) the Trustee shall not be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

Section 7.4 Not Responsible for Recitals or Issuance of Securities.

The recitals herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of Securities or the proceeds thereof.

Section 7.5 May Hold Securities.

The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 7.8 and 7.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

Section 7.6 Money Held in Trust.

Money held by the Trustee in trust hereunder (including amounts held by the Trustee as Paying Agent) need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed upon in writing with the Company.

Section 7.7 Compensation and Reimbursement.

The Company agrees (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any

provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability, damage, claim or expense, including taxes (other than taxes based upon or determined or measured by the income of the Trustee), incurred without gross negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.

When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.1(5) or Section 6.1(7), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable federal or state bankruptcy, insolvency or other similar law.

The provisions of this Section 7.7 shall survive this Indenture.

Section 7.8 Disqualification: Conflicting Interests.

The Trustee shall be disqualified only where such disqualification is required by Section 3.10(b) of the Trust Indenture Act, provided that, to the extent permitted by law, Citibank, N.A. shall not be deemed to have a conflicting interest for purposes of Section 3.10(b) of the TIA because of its capacity as trustee under the First Mortgage Indenture or the Substituted Mortgage Indenture. Nothing shall prevent the Trustee from filing with the Commission the application referred to in the second to last paragraph of
Section 3.10(b) of the Trust Indenture Act.

Section 7.9 Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee hereunder which shall be eligible to act as Trustee under Section 310(a)(1) of the Trust Indenture Act having a combined capital and surplus of at least $50,000,000 subject to supervision or examination by federal or State authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Neither the Company nor any Person directly or indirectly controlling, controlled by, or under common control with the Company may serve as Trustee. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

Section 7.10 Resignation and Removal; Appointment of Successor.

(a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 7.11.

(b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 7.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

(c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company.

(d) If at anytime:

(1) the Trustee shall fail to comply with Section 310(b) of the Trust Indenture Act after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months; or

(2) the Trustee shall cease to be eligible under Section 7.9 and shall fail to resign after written request therefor by the Company or by any such Holder of a Security who has been a bona fide Holder of a Security for at least six months; or

(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case,
(i) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 7.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the

Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 7.11, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company with respect to such Securities. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 7.11, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

(f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to all Holders of Securities of such series as their names and addresses appear in the Security Register. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

Section 7.11 Acceptance of Appointment by Successor.

(a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

(b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered

by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

(c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

(d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under the Trust Indenture Act.

Section 7.12 Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

Section 7.13 Preferential Collection of Claims Against Company.

The Trustee shall comply with Section 311 (a) of the Trust Indenture Act, excluding any creditor relationship listed in Section 311 (b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent indicated therein.

Section 7.14 Appointment of Authenticating Agent.

At any time when any of the Securities remain Outstanding the Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of, and subject to the direction of, the Trustee to authenticate Securities of such series issued upon exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.6, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and

delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section.

If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternate certificate of authentication in the following form:

Form of Authenticating Agent's

Certificate of Authentication Dated: ________________________

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

As Trustee

By ____________________________

As Authenticating Agent

By ____________________________ Authorized Signatory

ARTICLE VIII.
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 8.1 Company to Furnish Trustee Names and Addresses of Holders.

The Company will furnish or cause to be furnished to the Trustee:

(a) semi-annually, not later than January 1 and July 1 in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of the preceding December 15 or June 15, as the case may be; and

(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided. however, that so long as the Trustee is the Security Registrar, no such list shall be required to be furnished.

Section 8.2 Preservation of Information; Communications to Holders.

(a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 8.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in
Section 8.1 upon receipt of a new list so furnished.

(b) If three or more Holders (herein referred to as "applicants") apply in writing to the Trustee, and furnish to the Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to their rights under this Indenture or under the Securities and is accompanied by a copy of the form

of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five Business Days after the receipt of such application, at its election, either

(i) afford such applicants access to the information preserved at the time by the Trustee in accordance with Section 8.2(a); or

(ii) inform such applicants as to the approximate number of Holders whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 8.2(a), and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application.

If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder whose name and address appears in the information preserved at the time by the Trustee in accordance with Section 8.2(a) a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interest of the Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Holders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application.

(c) Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 8.2(b), regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 8.2(b).

Section 8.3 Reports by Trustee.

(a) Within 60 days after May 15 of each year commencing with the year 1999, the Trustee shall transmit by mail to all Holders of Securities as provided in Section 313(c) of the Trust Indenture Act, a brief report dated as of May 15, if required by and in compliance with Section 313(a) of the Trust Indenture Act.

(b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the

Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange.

Section 8.4 Reports by Company.

The Company shall:

(1) file with the Trustee, within 30 days after the Company is required to file the same with the Commission, 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 Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations;

(2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations;

(3) transmit by mail to all Holders, as their names and addresses appear in the Security Register, (a) concurrently with furnishing the same to its stockholders, the Company's annual report to stockholders, containing certified financial statements, and any other financial reports which the Company generally furnishes to its stockholders, and
(b) within 30 days after the filing thereof with the Trustee, such summaries of any other information, documents and reports required to be filed by the Company pursuant to paragraphs (1) and (2) of this
Section as may be required by rules and regulations prescribed from time to time by the Commission; and

(4) furnish to the Trustee, on or before May 1 of each year, a brief certificate from the principal executive officer, principal financial officer or principal accounting officer as to his or her knowledge of the Company's compliance with all conditions and covenants under this Indenture. For purposes of this paragraph, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. Such certificate need not comply with Section 1.2.

ARTICLE IX.
CONSOLIDATION, MERGER, LEASE, SALE OR TRANSFER

Section 9.1 When Company May Merge, Etc.

The Company shall not consolidate with, or merge with or into any other corporation (whether or not the Company shall be the surviving corporation), or sell, assign, transfer or lease all or substantially all of its properties and assets as an entirety or substantially as an entirety to any Person or group of affiliated Persons, in one transaction or a series of related transactions, unless:

(1) either the Company shall be the continuing Person or the Person (if other than the Company) formed by such consolidation or with which or into which the Company is merged or the Person (or group of affiliated Persons) to which all or substantially all the properties and assets of the Company as an entirety or substantially as an entirety are sold, assigned, transferred or leased shall be a corporation (or constitute corporations) organized and existing under the laws of the United States of America or any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Securities and this Indenture; and

(2) immediately before and after giving effect to such transaction or series of related transactions, no Event of Default, and no Default, shall have occurred and be continuing.

Section 9.2 Opinion of Counsel.

The Company shall deliver to the Trustee prior to the proposed transaction(s) covered by Section 9.1 an Officer's Certificate and an Opinion of Counsel stating that the transaction(s) and such supplemental indenture comply with this Indenture and that all conditions precedent to the consummation of the transaction(s) under this Indenture have been met.

Section 9.3 Successor Corporation Substituted.

Upon any consolidation by the Company with or merger by the Company into any other corporation or any lease, sale, assignment, or transfer of all or substantially all of the property and assets of the Company in accordance with
Section 8.1, the successor corporation formed by such consolidation or into which the Company is merged or the successor corporation or affiliated group of corporations to which such lease, sale, assignment, or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation or corporations had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor corporation or corporations shall be relieved of all obligations and covenants under this Indenture and the Securities and in the event of such conveyance or transfer, except in the case of a lease, any such predecessor corporation may be dissolved and liquidated.

ARTICLE X.
SUPPLEMENTAL INDENTURES

Section 10.1 Supplemental Indentures Without Consent of Holders.

Without notice to or the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(1) to evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or

(2) to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or

(3) to add any additional Events of Default with respect to all or any series of Securities; or

(4) to add or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons; or

(5) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision; or

(6) to establish the form or terms of Securities of any series as permitted by Sections 2.1 and 3.1; or

(7) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 7.11(b); or

(8) to cure any ambiguity, defect or inconsistency or to correct or supplement any provision herein which may be inconsistent with any other provision herein; or

(9) to make any change that does not materially adversely affect the interests of the Holders of Securities of any series.

Upon request of the Company, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon receipt by the Trustee of the documents described in (and subject to the last sentence of) Section 9.3, the Trustee shall join with the Company in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture.

Section 10.2 Supplemental Indentures with Consent of Holders.

With the written consent of the Holders of a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee shall, subject to Section 10.3, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof or extend the time for payment thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 6.2, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or impair the interest hereunder of the Trustee in the Collateral Bonds or Substituted Collateral Bonds, or reduce the principal amount of any issue of Collateral Bonds (except, as provided in this Indenture, upon the Release Date) or Substituted Collateral Bonds to an amount less than the principal amount of the related issue of Notes or alter the payment provisions of such Collateral Bonds or Substituted Collateral Bonds in a manner adverse to the Holders of the Notes, in each case without the consent of the Holder of each Note so affected; or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of compliance with certain provisions of this Indenture or Defaults or Events of Default hereunder and their consequences provided for in this Indenture; or (3) change the redemption provisions (including Article Twelve) hereof in a manner adverse to such Holder; or (4) modify any of the provisions of this Section or Section 6.13, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section, or the deletion of this proviso, in accordance with the requirements of Sections 7.11
(b) and 10.1(8).

A supplemental indenture which changes or eliminates any covenant or other provisions of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such

series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Section 10.3 Execution of Supplemental Indentures.

The Trustee shall sign any supplemental indenture authorized pursuant to this Article, subject to the last sentence of this Section 10.3. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 7.1) shall be fully protected in relying upon, an Officer's Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.

Section 10.4 Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

Section 10.5 Conformity with Trust Indenture Act.

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect.

Section 10.6 Reference in Securities to Supplemental Indentures.

Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

ARTICLE XI.
COVENANTS

Section 11.1 Payments of Securities.

With respect to each series of Securities, the Company will duly and punctually pay the principal of (and premium, if any) and interest on such Securities in accordance with their terms

and this Indenture, and will duly comply with all the other terms, agreements and conditions contained in, or made in the Indenture for the benefit of, the Securities of such series.

Section 11.2 Maintenance of Office or Agency.

The Company will maintain an office or agency in each Place of Payment where Securities may be surrendered for registration of transfer or exchange or for presentation for payment, where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee as set forth in Section 1.5.

The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

Unless otherwise set forth in, or pursuant to, a Board Resolution or Indenture supplemental hereto with respect to a series of Securities, the Company hereby initially designates the office of Citibank, N.A., Corporate Trust Department located in 111 Wall Street, 5th Floor, New York, NY 10043, as such office of the Company.

Section 11.3 Corporate Existence.

Subject to Article 9, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and that of each of its Subsidiaries and the rights (charter and statutory) of the Company and its Subsidiaries; provided, however, that (a) the Company shall not be required to preserve any such right, license or franchise or the corporate existence of any of its Subsidiaries if the Board of Directors, or the board of directors of the Subsidiary concerned, as the case may be, shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company or any of its Subsidiaries and that the loss thereof is not materially disadvantageous to the Holders, and (b) nothing herein contained shall prevent any Subsidiary of the Company from liquidating or dissolving, or merging into, or consolidating with the Company (provided that the Company shall be the continuing or surviving corporation) or with any one or more Subsidiaries if the Board of Directors or the board of directors of the Subsidiary concerned, as the case may be, shall so determine.

Section 11.4 Payment of Taxes and Other Claims.

The Company will pay or discharge, or cause to be paid or discharged, before the same shall become delinquent, (1) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or upon the income, profits or property of the Company or any Subsidiary, and (2) all lawful claims for labor, materials and supplies which, if

unpaid, might by law become a material lien upon the property of the Company or any Subsidiary; provided, however, that the Company 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 and for which adequate provision has been made.

Section 11.5 Maintenance of Properties.

The Company will cause all material properties used or useful in the conduct of its business or the business of any of its Subsidiaries to be maintained and kept in good condition, repair and working order (normal wear and tear excepted) and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary, so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties, or disposing of any of them, if such discontinuance or disposal is, in the judgment of the Board of Directors or of the board of directors of the Subsidiary concerned, as the case may be, desirable in the conduct of the business of the Company or any Subsidiary of the Company and not materially disadvantageous to the Holders.

Section 11.6 Compliance Certificates.

(a) The Company shall deliver to the Trustee within 90 days after the end of each fiscal year of the Company (which fiscal year currently ends on December 31), an Officer's Certificate stating whether or not the signer knows of any Default or Event of Default by the Company that occurred prior to the end of the fiscal year and is then continuing. If the signer does know of such a Default or Event of Default, the certificate shall describe each such Default or Event of Default and its status and the specific section or sections of this Indenture in connection with which such Default or Event of Default has occurred. The Company shall also promptly notify the Trustee in writing should the Company's fiscal year be changed so that the end thereof is on any date other than the date on which the Company's fiscal year currently ends. The certificate need not comply with Section 1.2.

(b) The Company shall deliver to the Trustee, within 10 days after the occurrence thereof, notice of any acceleration which with the giving of notice and the lapse of time would be an Event of Default within the meaning of Section 5.1(4).

(c) The Company shall deliver to the Trustee forthwith upon becoming aware of a Default or Event of Default (but in no event later than 10 days after the occurrence of each Default or Event of Default that is continuing), an Officer's Certificate setting forth the details of such Default or Event of Default and the action that the Company proposes to take with respect thereto and the specific section or sections of this Indenture in connection with which such Default or Event of Default has occurred.

Section 11.7 Commission Reports.

(a) So long as the Securities remain outstanding, the Company shall cause its annual report to stockholders and any other financial reports furnished by it to stockholders generally, to be mailed to the Holders at their addresses appearing in the register of Securities maintained by the Security Registrar in each case at the time of such mailing or furnishing to stockholders. If the Company is not required to furnish annual or quarterly reports to its stockholders pursuant to the Exchange Act, the Company shall cause its financial statements, including any notes thereto and, with respect to annual reports, an auditors' report by an accounting firm of established national reputation and a "Management's Discussion and Analysis of Financial Condition and Results of Operations," to be so filed with the Trustee and mailed to the Holders within 90 days after the end of each of the Company's fiscal years and within 45 days after the end of each of the first three quarters of each fiscal year.

(b) The Company shall provide the Trustee with a sufficient number of copies of all reports and other documents and information that the Company may be required to deliver to the Holders under this Section 11.7.

Section 11.8 Waiver of Stay, Extension or Usury Laws.

The Company 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, and will actively resist any and all efforts to be compelled to take the benefit or advantage of, any stay or extension law or any usury law or other law, which would prohibit or forgive the Company from paying all or any portion of the principal of and/or interest on the Securities as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) the Company hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the 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 11.9 Money for Securities Payments to Be Held in Trust.

If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure to so act.

The Company will cause each Paying Agent for any series of Securities (other than the Trustee) to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will:

(1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;

(2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment of principal (and premium, if any) or interest on the Securities of that series; and

(3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of (and premium, if any) or interest on any Security of any series and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee of such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in New York, New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

Section 11.10 Limitation on Liens.

Neither the Company will, nor will it permit any Significant Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the property of the Company or any of its Subsidiaries, except:

(i) Liens for taxes, assessments or governmental charges or levies on its property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings.

(ii) Liens imposed by law, such as carriers', warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than 60 days past due or which are being contested in good faith by appropriate proceedings.

(iii) Liens arising out of pledges or deposits under worker's compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation.

(iv) Utility easements, rights of way, exceptions, agreement or the joint or common use of property, restrictions and such other encumbrances or charges against property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Company or its Subsidiaries.

(v) Liens on the capital stock, partnership interest, or other evidence of ownership of any Subsidiary or such Subsidiary's assets that secure project financing for such Subsidiary.

(vi) Purchase money liens upon or in property now owned or hereafter acquired in the ordinary course of business (consistent with the Company's business practices) to secure (A) the purchase price of such property or (B) Indebtedness incurred solely for the purpose of financing the acquisition, construction, or improvement of any such property to be subject to such liens, or Liens existing on any such property at the time of acquisition, or extensions, renewals, or replacements of any of the foregoing for the same or a lesser amount; provided that no such lien shall extend to or cover any property other than the property being acquired, constructed, or improved and replacements, modifications, and proceeds of such property, and no such extension, renewal, or replacement shall extend to or cover any property not theretofore subject to the Lien being extended, renewed, or replaced.

(vii) Liens existing on the date the Securities are first issued hereunder.

(viii) Liens for no more than 90 days arising from a transaction involving accounts receivable of the Company (including the sale of such accounts receivable), where such accounts receivable arose in the ordinary course of the Company's business.

(ix) The right reserved to, or vested in, any municipality or public authority by the terms of any franchise, grant, license or permit, or by any provision of law, to terminate such franchise, grant, license or permit or to purchase or appropriate or recapture or to designate a purchaser of any of the mortgaged property, or to demand and collect from the Company any tax or other compensation for the use of streets, alleys or other public places.

(x) Rights reserved to, or vested in, any municipality or public authority to use, control, remove or regulate any property of the Company.

(xi) Zoning laws and ordinances.

(xii) Possible adverse rights or interests and inconsequential defects or irregularities in title which, in the opinion of counsel, may be properly disregarded.

(xiii) Rights reserved to or vested in others to take or receive any part of the gas, power, oil or other minerals or timber generated, developed, manufactured or produced by, or grown on, or acquired with, any property of the Company.

Section 11.11 Limitation on Sale and Leaseback Transactions.

The Company will not itself, and will not permit any Subsidiary to, enter into any arrangement with any bank, insurance company or other lender or investor (not including the Company or any Subsidiary), or to which such lender or investor (other than the Company or a Subsidiary) is a party, providing for the leasing by the Company or such Subsidiary for a period, including renewals, in excess of three years of any real property located within the United States of America which has been owned by the Company or such Subsidiary for more than six months and which has been or is to be sold or transferred by the Company or such Subsidiary to such lender or investor or to any person to whom funds have been or are to be advanced by such lender or investor on the security of such real property (a "Sale and Leaseback Transaction") unless either:

(a) the Company or such Subsidiary could create indebtedness secured by a lien pursuant to Section 11.10 on the real property to be leased, in an amount equal to the Value of such Sale and Leaseback Transaction, without equally and ratably securing the Securities; or

(b) the Company, within six months after the sale or transfer shall have been made, applies an amount equal to the greater of (i) the net proceeds of the sale of the real property leased pursuant to such arrangement or (ii) the fair market value of the real property so leased at the time of entering into such arrangement (as determined by the Board of Directors of the Company) to the retirement of the Securities and other obligations of the issuer ranking on a parity with the Securities. No retirement referred to in this paragraph (b) may be effected by payment at maturity or pursuant to any mandatory sinking fund or prepayment provision.

Section 11.12 Waiver of Certain Covenants.

The Company may omit in any particular instance to comply with any covenant or condition set forth in Sections 11.10 or 11.11, if before or after the time for such compliance the Holders of not less than a majority in principal amount of the Securities at the time Outstanding of each series which is affected thereby, shall, by consent in writing of such Holders, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or conditions except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such covenant or condition shall remain in full force and effect.

ARTICLE XII.
REDEMPTION OF SECURITIES

Section 12.1 Applicability of Article.

Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 3.1 for Securities of any series) in accordance with this Article.

Section 12.2 Election to Redeem; Notice to Trustee.

The election of the Company to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities of any series, the Company shall, at least 45 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of such series to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officer's Certificate evidencing compliance with such restriction.

Section 12.3 Election by Trustee of Securities to Be Redeemed.

If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not more than 90 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, substantially pro rata, by lot or by any other method as the Trustee considers fair and appropriate and that complies with the requirements of the principal national securities exchange, if any, on which such Securities are listed, and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series; provided that in case the Securities of such series have different terms and maturities, the Securities to be redeemed shall be selected by the Company and the Company shall give notice thereof to the Trustee.

The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed.

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of the Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

Section 12.4 Notice of Redemption.

Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 45 days prior to the Redemption Date, unless otherwise provided in an indenture supplemental hereto, to each Holder of Securities to be redeemed, at his address appearing in the Security Register.

All notices of redemption shall state:

(1) the Redemption Date;

(2) the Redemption Price;

(3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed;

(4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date;

(5) the place or places where such Securities are to be surrendered for ` payment of the Redemption Price;

(6) that the redemption is for a sinking fund, if such is the case;

(7) the CUSIP number, if any, of the Securities to be redeemed; and

(8) unless otherwise provided as to a particular series of Securities, if at the time of publication or mailing of any notice of redemption the Company shall not have deposited with the Trustee or Paying Agent and/or irrevocably directed the Trustee or Paying Agent to apply, from money held by it available to be used for the redemption of Securities, an amount in cash sufficient to redeem all of the Securities called for redemption, including accrued interest to the Redemption Date, such notice shall state that it is subject to the receipt of the redemption moneys by the Trustee or Paying Agent before the Redemption Date (unless such redemption is mandatory) and such notice shall be of no effect unless such moneys are so received before such date.

(9) Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company.

Section 12.5 Deposit of Redemption Price.

Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 11.9) an amount of money sufficient to pay the Redemption Price of, and

(except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date.

Section 12.6 Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular or Special Record Dates according to their terms and the provisions of Section 3.7.

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

Section 12.7 Securities Redeemed in Part.

Any Security which is to be redeemed only in part shall be surrendered at an office or agency of the Company at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and Stated Maturity, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

ARTICLE XIII.
SINKING FUNDS

Section 13.1 Applicability of Article.

The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 3.1 for Securities of such series.

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "MANDATORY SINKING FUND PAYMENT," and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "OPTIONAL SINKING FUND PAYMENT." If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 13.2. Each sinking fund payment

shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

Section 13.2 Satisfaction of Sinking Fund Payments with Securities.

The Company (1) may deliver Securities of a series (other than any Securities previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

Section 13.3 Redemption of Securities for Sinking Fund.

Not less than 45 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officer's Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 13.2 and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 12.3 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 12.4. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 12.6 and 12.7.

ARTICLE XIV.
DEFEASANCE AND COVENANT DEFEASANCE

Section 14.1 Applicability of Article; Company's Option to Effect Defeasance or Covenant Defeasance.

Unless pursuant to Section 3.1 provision is made for the inapplicability of either or both of (a) Defeasance of the Securities of a series under Section 14.2 or (b) Covenant Defeasance of the Securities of a series under Section 14.3, then the provisions of such Section or Sections, as the case may be, together with the other provisions of this Article, shall be applicable to the Securities of such series, and the Company may at its option by Board Resolution, at any time, with respect to the Securities of such series, elect to have either Section 14.2 (unless inapplicable) or Section 14.3 (unless inapplicable) be applied to the Outstanding Securities of such series upon compliance with the applicable conditions set forth below in this Article.

Section 14.2 Defeasance and Discharge.

Upon the Company's exercise of the option provided in Section 14.1 to defease the Outstanding Securities of a particular series, the Company shall be discharged from its obligations with respect to the Outstanding Securities of such series on the date the applicable conditions set forth in Section 14.4 are satisfied (hereinafter, "DEFEASANCE"). Defeasance shall mean that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities of such series and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same); provided, however, that the following rights, obligations, powers, trusts, duties and immunities shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of Outstanding Securities of such series to receive, solely from the trust fund provided for in Section 14.4, payments in respect of the principal of (and premium, if any) and interest on such Securities when such payments are due, (B) the Company's obligations with respect to such Securities under Sections 3.4, 3.5, 3.6, 11.2 and 11.9, (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (D) this Article. Subject to compliance with this Article, the Company may exercise its option with respect to Defeasance under this Section 14.2 notwithstanding the prior exercise of its option with respect to Covenant Defeasance under Section 14.3 in regard to the Securities of such series.

Section 14.3 Covenant Defeasance.

Upon the Company's exercise of the option provided in Section 13.1 to obtain a Covenant Defeasance with respect to the Outstanding Securities of a particular series, the Company shall be released from its obligations under this Indenture (except its obligations under Sections 3.4, 3.5, 3.6, 6.6, 6.9, 7.10, 11.1, 11.2, 11.6, 11.8 and 11.9) with respect to the Outstanding Securities of such series on and after the date the applicable conditions set forth in Section 14.4 are satisfied (hereinafter, "COVENANT DEFEASANCE"). Covenant Defeasance shall mean that, with respect to the Outstanding Securities of such series, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in this Indenture (except its obligations under Sections 3.4, 3.5, 3.6, 6.6, 6.9, 7.10, 11.1, 11.2, 11.6, 11.8 and 11.9), whether directly or indirectly by reason of any reference elsewhere herein or by reason of any reference to any other provision herein or in any other document, and such omission to comply shall not constitute an Event of Default under Section 6.1(4) with respect to Outstanding Securities of such series, and the remainder of this Indenture and of the Securities of such series shall be unaffected thereby.

Section 14.4 Conditions to Defeasance or Covenant Defeasance.

The following shall be the conditions to Defeasance under Section 14.2 and Covenant Defeasance under Section 14.3 with respect to the Outstanding Securities of a particular series:

(1) the Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 7.9 who shall agree to comply with the provisions of this Article applicable to it), under the terms of an irrevocable trust agreement in form and substance reasonably satisfactory to such

Trustee, as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, (A) Dollars in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than the due date of any payment, money in an amount, or (C) a combination thereof, in each case sufficient, after payment of all federal, state and local taxes or other charges or assessments in respect thereof payable by the Trustee, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, (i) the principal of (and premium, if any, on) and each installment of principal of (and premium, if any) and interest on the Outstanding Securities of such series on the Stated Maturity of such principal or installment of principal or interest and (ii) any mandatory sinking fund payments or analogous payments applicable to the Outstanding Securities of such series on the day on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities.

(2) No Default or Event of Default with respect to the Securities of such series shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit, and no Default or Event of Default under clause (5) or (6) of Section 6.1 shall occur and be continuing, at any time during the period ending on the 91st day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period).

(3) Such deposit, Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which it is bound.

(4) Such Defeasance or Covenant Defeasance shall not cause any Securities of such series then listed on any national securities exchange registered under the Exchange Act to be delisted.

(5) In the case of an election with respect to Section 14.2, the Company shall have delivered to the Trustee either (A) a ruling directed to the Trustee received from the Internal Revenue Service to the effect that the Holders of the Outstanding Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Defeasance had not occurred or (B) an Opinion of Counsel, based on such ruling or on a change in the applicable federal income tax law since the date of this Indenture, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Outstanding Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Defeasance had not occurred.

(6) In the case of an election with respect to Section 14.3, the Company shall have delivered to the Trustee an Opinion of Counsel or a ruling directed to the Trustee received from the Internal Revenue Service to the effect that the Holders of the Outstanding Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred.

(7) Such Defeasance or Covenant Defeasance shall be effected in compliance with any additional terms, conditions or limitations which may be imposed on the Company in connection therewith pursuant to
Section 3.1.

(8) The Company shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to either the Defeasance under Section 14.2 or the Covenant Defeasance under Section 14.3 (as the case may be) have been complied with.

Section 14.5 Deposited Money and Government Obligations To Be Held In Trust.

Subject to the provisions of the last paragraph of Section 11.9, all money and Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee--collectively for purposes of this
Section 14.5, the "Trustee") pursuant to Section 14.4 in respect of the Outstanding Securities of a particular series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal (and premium, if any) and interest, but such money need not be segregated from other funds except to the extent required by law.

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the Government Obligations deposited pursuant to Section 14.4 or the principal and interest received in respect thereof, other than any such tax, fee or other charge which by law is for the account of the Holders of the Outstanding Securities of such series.

Anything in this Article to the contrary notwithstanding, the Trustee shall deliver to pay to the Company from time to time upon Company Request any money or Government Obligations held by it as provided in Section 14.4 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited for the purpose for which such money or Government Obligations were deposited.

ARTICLE XV.
MISCELLANEOUS

Section 15.1 Miscellaneous.

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.

MICHIGAN CONSOLIDATED
GAS COMPANY:

                                           By:   /s/  Howard L. Dow III
                                                --------------------------------
                                                Name: Howard L. Dow III
                                                Title Senior Vice President
                                                       and CFO



Attest:    /s/  Ronald E. Christian
         ----------------------------
         Name:  Ronald E. Christian
         Title: Vice President,
                  General Counsel          CITIBANK, N.A., as Trustee
                  and Secretary



                                           By:    /s/  P. DeFelice
                                                --------------------------------
                                                Name:  P. DeFelice
                                                Title: Vice President




Attest:     /s/ F. Mills
         ----------------------------
         Name:  F. Mills
         Title: Senior Trust Officer

TWENTY-NINTH
SUPPLEMENTAL INDENTURE
TO
INDENTURE OF MORTGAGE AND
DEED OF TRUST
DATED AS OF MARCH 1, 1944

MICHIGAN CONSOLIDATED GAS COMPANY

CITIBANK, N.A.

AND

ROBERT T. KIRCHNER
TRUSTEES

DATED AS OF JULY 14, 1989

CREATING AN ISSUE OF FIRST MORTGAGE BONDS,
designated
SECURED MEDIUM-TERM NOTES, SERIES A
DUE FROM 2 TO 30 YEARS FROM THE DATE OF ISSUE

AND PROVIDING FOR THE MODIFICATION AND RESTATEMENT OF
SAID INDENTURE

MICHIGAN CONSOLIDATED GAS COMPANY

TWENTY-NINTH SUPPLEMENTAL INDENTURE
DATED JULY 15, 1989
SUPPLEMENTAL TO INDENTURE OF MORTGAGE
AND DEED OF TRUST
DATED AS OF MARCH 1, 1944

TABLE OF CONTENTS*

                                                                           PAGE
                                                                           ----
                                     PART I

                         PROVISIONS RELATED TO SECURED
                          MEDIUM-TERM NOTES, SERIES A

                                   ARTICLE I.

                     CREATION OF AN ISSUE OF FIRST MORTGAGE
                      BONDS, DESIGNATED AND DISTINGUISHED
                   AS "SECURED MEDIUM-TERM NOTES, SERIES A".

SECTION 1..................................................................    5
     Bonds of the Twenty-sixth Series......................................    5
SECTION 2..................................................................    7
     Redemption............................................................    7
SECTION 3..................................................................    8
     Form of Bonds.........................................................    8
SECTION 4..................................................................   16
     Transfer and Exchange.................................................   16
SECTION 5..................................................................   17
     Temporary Bonds.......................................................   17

                                  ARTICLE II.

                     ISSUE OF BONDS OF TWENTY-SIXTH SERIES.

Aggregate Principal Amount.................................................   18

                                    PART II

                            RESTATEMENT OF INDENTURE

PARTIES....................................................................   19

*NOTE: The Table of Contents is not part of the original Indenture as executed.

PAGE

RECITALS:

     Purpose of mortgage ............................................  19
     General descriptions of bonds ..................................  19
     General form of coupon bond ....................................  20
     General form of interest coupon ................................  23
     General form of registered bond without coupons ................  23
     Form of Trustee's certificate on all bonds .....................  26
     Due authorization of the Indenture .............................  26
GRANTING CLAUSES ....................................................  26
     Description of property mortgaged ..............................  26
          Real estate ...............................................  27
          Pipelines .................................................  27
          Gas plants, transmission and distribution systems .........  28
          Franchise, easements, etc. ................................  28
          Other property ............................................  28
          After-acquired property ...................................  28
          Property hereafter expressly mortgaged or pledged .........  28
          Together with appurtenances ...............................  29
     Property excepted and excluded from lien .......................  29
          Securities, receivables, cash and contracts ...............  29
          Property and franchises of other corporations .............  29
          Merchandise, materials and supplies .......................  29
          Gas, by-products of gas, electricity, steam, water
            and oil .................................................  30
          Automobiles, trucks and other transportation equipment ....  30
          Property in Earth's orbit or otherwise in space ...........  30
          Oil rights under gas and/or oil leases ....................  30
          Certain real estate .......................................  30
     Right of Trustees or receiver to take possession of excepted
       property on default ..........................................  30
     Reservation of right to mortgage excepted property .............  30
HABENDUM ............................................................  31
     Matters to which the conveyance is subject .....................  31
DECLARATION OF TRUST ................................................  31
DEFEASANCE ..........................................................  32

ARTICLE I.

DEFINITIONS

Purposes and limitation of definitions ..............................  32
Accountant ..........................................................  33
Accountant's certificate ............................................  33
Acquired plan or system .............................................  33
Additional bonds ....................................................  33
Affiliate ...........................................................  33
Appraiser ...........................................................  34

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Appraiser's certificate...................................................   34
Authorized Detroit newspaper..............................................   34
Authorized New York newspaper.............................................   34
Board of Directors -- Board...............................................   35
Bonded....................................................................   35
     Bonds or property "theretofore bonded"...............................   36
Bondholders...............................................................   36
Bonds.....................................................................   37
     Bonds "outstanding under this Indenture".............................   37
Certified resolution......................................................   37
Company...................................................................   37
Counsel...................................................................   37
Coupons...................................................................   37
Engineer..................................................................   38
Engineer's certificate....................................................   38
Event of default..........................................................   38
Indenture.................................................................   38
Independent accountant....................................................   38
Independent accountant's certificate......................................   38
Independent appraiser.....................................................   39
Independent appraiser's certificate.......................................   39
Independent engineer......................................................   39
Independent engineer's certificate........................................   40
Lien of this Indenture....................................................   40
Mortgaged property -- trust estate........................................   40
Net property additions....................................................   40
Officers' certificate.....................................................   41
Order of the Company -- request of the Company............................   41
Original cost.............................................................   41
Permissible encumbrances..................................................   41
Prior lien................................................................   42
Prior lien bonds..........................................................   42
     Prior lien bonds "outstanding".......................................   42
Property additions........................................................   43
Property retirements......................................................   46
Publication of notice.....................................................   47
Redeemed bonds and redeemed prior lien bonds..............................   47
Registered owner..........................................................   48
Responsible officers of the Trustee.......................................   48
Supplemental indenture....................................................   48
Trust Indenture Act of 1939...............................................   48
Trustee --  Individual Trustee -- Trustees................................   48

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                                 ARTICLE II.

              DESCRIPTION, EXECUTION AND REGISTRATION OF BONDS.

Sec. 2.01  Issuance in series; title, form and designation; determination by Board of Directors;
           supplemental indenture to define terms of each series; general provisions of bonds;
           interest..............................................................................    49

Sec. 2.02  Numbering, lettering and denominations; exchangeability...............................    53

Sec. 2.03  Execution of bonds; officers authorized; authentication of coupons.....................   54

Sec. 2.04  Authentication by Trustee; effect of Trustee's Certificate............................    55

Sec. 2.05  Temporary bonds; exchange for definitive bonds........................................    55

Sec. 2.06  Registration and transfer of bonds; agency in The City of New York; registration
           and transfer elsewhere................................................................    56

Sec. 2.07  Charges for registration, transfer and exchange.......................................    57

Sec. 2.08  Mutilated, destroyed, lost or stolen bonds; issuance of substitutes; effect of
           substitute bond or coupon; cancellation of mutilated bonds and coupons................    58

Sec. 2.09  Twenty-sixth Series of Bonds..........................................................    58


                                 ARTICLE III.

                                ISSUE OF BONDS.

Sec. 3.01  General provisions; aggregate principal amount unlimited; all bonds equally and
           ratably secured.......................................................................    59

Sec. 3.02  Initial series--Retired at or before maturity in 1969.................................    59

Sec. 3.03  Issue of bonds upon basis of net property additions; 70% limitation...................    59

             A.  Compliance with Section 5.10 of Article V.......................................    60

             B.  Deduction of amount of prior lien bonds.........................................    60

             C.  1.  Certified resolution........................................................    60

                 2.  Engineer's certificate......................................................    60

                 3.  Independent engineer's certificate in certain cases.........................    62

                 4.  Appraiser's certificate in certain cases....................................    62

                 5.  Accountant's certificate or independent accountant's certificate
                     as to net earnings..........................................................    62

                 6.  Instruments of conveyance, transfer and assignment..........................    65

                 7.  Opinion of counsel..........................................................    65

                 8.  Officers' certificate as to retirements, liens, no defaults and compliance
                     with conditions precedent...................................................    67

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                         9.   Evidence of authorization by
                              governmental authorities ................  69

Sec. 3.04      Issue of bonds upon the basis of prior lien bonds ......  69
                    A.   Provisions for issuance ......................  69
                         1.   Certified resolution ....................  69
                         2.   Delivery of prior lien bonds or officers'
                              certificate of payment, reduction,
                              invalidity or redemption.................  69
                         3.   Officers' certificate as to deduction of
                              prior lien bonds, bonding, no default,
                              liens and compliance with conditions
                              precedent ...............................  70
                         4.   Opinion of counsel ......................  70
                         5.   Accountant's certificate or independent
                              accountant's certificate as to net
                              earnings in certain cases ...............  71
                         6.   Evidence of authorization by governmental
                              authorities .............................  71
                    B.   Redeemed prior lien bonds deemed paid ........  71
                    C.   Issue of bonds in respect to discharge of
                         mortgage securing prior lien bonds ...........  71
                         a).  Certified resolution; officers'
                              certificate; accountant's certificate;
                              independent accountant's certificate;
                              opinion of counsel ......................  71
                         b).  Additional officers' certificate ........  72
                         c).  Opinion of counsel as to discharge of
                              lien ....................................  72

Sec. 3.05      Issue of bonds upon deposit of cash with Trustee .......  72
                    A.   Certified resolution .........................  72
                    B.   Officers' certificate of no default and
                         compliance with conditions precedent .........  72
                    C.   Accountant's certificate or independent
                         accountant's certificate as to net earnings ..  72
                    D.   Deposit of cash ..............................  72
                    E.   Opinion of counsel ...........................  72
                    F.   Evidence of authorization by governmental
                         authorities ..................................  73
               Disposition of cash deposited ..........................  73

Sec. 3.06      Issue of bonds upon retirement of bonds previously
               outstanding ............................................  73
                    A.   Certified resolution .........................  74
                    B.   Officers' certificate of no default and
                         compliance with conditions precedent .........  74
                    C.   Opinion of counsel ...........................  74

PAGE

        D. Accountant's certificate or independent
           accountant's certificate as to net earnings
           in certain cases.............................       74
        E. Officer's certificate........................       74
        F. Evidence of authorization by governmental
           authorities..................................       75
Redeemed bonds deemed paid..............................       75

ARTICLE IV.

REDEMPTION OF BONDS.

Sec. 4.01 Notice of redemption; manner of giving notice to be
          specified in supplemental indenture; redemption of
          part of series; deposit of cash; effect of notice;
          payment of redemption price..................................       75
Sec. 4.02 Surrender for cancellation of bonds held by Company..........       77
Sec. 4.03 Cancellation of redeemed bonds...............................       77
Sec. 4.04 Release of lien upon deposit of redemption money.............       78
Sec. 4.05 Notice to be mailed at least 30 days before redemption.......       78
Sec. 4.06 Failure to give notice does not affect validity..............       78
Sec. 4.07 Redemption may be made conditional on deposit of moneys......       78

ARTICLE V.

COVENANTS.

Sec. 5.01 To pay principal and interest and premium in accordance
          with terms of bonds and coupons; to cancel coupons when
          paid.........................................................       79
Sec. 5.02 To maintain agency for service of notices, etc., in The
          City of New York.............................................       79
Sec. 5.03 Of title and warranty........................................       79
Sec. 5.04 Of further assurances........................................       80
Sec. 5.05 To record and file Indenture and additional instruments; to
          furnish opinions of counsel as to recording..................       80
Sec. 5.06 To preserve corporate existence, franchises, etc. ...........       81
Sec. 5.07 To perform all covenants and conditions of prior liens.......       81
Sec. 5.08 Against issuance of additional prior lien bonds unless
          deposited with Trustee.......................................       81
Sec. 5.09      A. To pledge and deposit acquired uncancelled prior
                  lien bonds with Trustee..............................       82

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B. To cancel or deliver to Trustee prior lien bonds on satisfaction of prior lien ..................... 82
C. To pay or deliver to Trustee cash and securities released on satisfaction of prior lien ............ 82
D. Not to obtain release of cash held by trustee or

                    prior lien except on compliance with Section 5 of
                    Article VIII unless deposited with Trustee .........    83

Sec. 5.10    "Restricted property" defined .............................    83
             Against applying for authentication of bonds, withdrawal or
             reduction of cash, or release of property, if as a result
             70% of the property additions then constituting restricted
             property would exceed 15% of outstanding bonds and prior
             lien bonds ................................................    83

Sec. 5.11    Not to create or permit equal or prior liens on trust
             estate other than liens existing on property at acquisition
             and purchase money mortgages; right to contest validity of
             liens .....................................................    84
             To subordinate future mortgages to the lien of this
             Indenture; exceptions .....................................    84

Sec. 5.12    To pay taxes; right to contest validity of taxes ..........    84

Sec. 5.13    To insure; application of proceeds of insurance; to furnish
             officers' certificate as to insurance .....................    85

Sec. 5.14    To maintain mortgaged property ............................    87

Sec. 5.15    To observe covenants of the Indenture and supplemental
             indentures ................................................    87

Sec. 5.16    Not to dispose of trust estate or lease trust estate as a
             whole or substantially as a whole except as authorized by
             Articles VII and XIII .....................................    87

Sec. 5.17    To permit Trustee to examine property and books; to file
             with Trustees and Securities and Exchange Commission
             certain information and reports; to transmit summaries of
             certain documents and reports to bondholders; to furnish
             Trustee with names and addresses of bondholders ...........    87

Sec. 5.18    Trustees empowered to make payments on default of
             Company ...................................................    89

Sec. 5.19    To cause any paying agent to deliver to Trustee an
             agreement to hold payments for benefit of bondholders and
             to notify Trustee of defaults in payments; Company to hold
             in trust sums to pay principal, premium and interest when
             due if it acts as own paying agent ........................    89

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ARTICLE VI.

CONCERNING SECURITIES PLEDGED OR MORTGAGED.

Sec. 6.01      Prior lien bonds and other securities to be held by
               Trustee for further security of bonds issued hereunder;
               prior lien bonds in coupon form to have unmatured
               coupons attached; uncancelled prior lien bonds received
               by Trustee to be stamped; form of stamp; transfer to
               Trustee; registration of prior lien bonds or other
               securities in the name of Trustee or its nominee ......... 90

Sec. 6.02      Payments on prior lien bonds held by Trustee; no
               payments while Company is not in default; enforcement
               of prior lien bonds on default; Trustee may exercise
               rights of holder ......................................... 91

               Company not to sell, assign or transfer any coupon or
               right to interest on prior lien bonds; restruction on
               collection of coupons or interest or other claim or
               judgment, without consent of Trustee; coupons and interest
               rights on prior lien bonds subject to lien hereof......... 91

Sec. 6.03      Surrender of prior lien bonds by Trustee to trustee of
               prior lien ............................................... 92

               Cancellation of prior lien bonds when all bonds of
               particular issue have been deposited with Trustee;
               resolution and opinion of counsel required ............... 92

Sec. 6.04      Disposition of interest on and principal of purchase
               money obligations and municipal or governmental bonds
               held by Trustee; Trustee may exercise rights of holder ... 93

Sec. 6.05      Trustee deemed sole owner of pledged securities when
               authorized under Indenture to exercise rights of holder;
               Trustee to act at request of Company before default;
               after default, Trustee may act in own discretion ......... 93

ARTICLE VII.

POSSESSION, USE, RELEASE AND TRANSFER OF PROPERTY.

Sec. 7.01      Until default, Company to have possession of property
               and right to receive rents and profits free of lien
               of Indenture, to use and consume materials and supplies,
               to deal with choses in action and contracts (subject to
               Article VI) and to alter, remove, change position of,
               replace and renew property ............................... 94

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Sec. 7.02      Powers of Company while in possession of trust estate, without release by Trustees:

                    A.   Disposal of worn-out equipment upon replacement thereof; disposal of materials,
                         merchandise and supplies in the ordinary conduct of business................................    94

                    B.   Surrender and modification of leases and right-of-way grants and abandonment of
                         gas wells...................................................................................    94

                    C.   Surrender and modification of franchises, etc., if right to continue business is
                         reserved under modified or new franchise....................................................    94


Sec. 7.03           A.   Sale or other disposition by Company and release by Trustees of property....................    95

                         1.   Officers' certificate..................................................................    95

                         2.   Engineer's certificate or independent engineer's certificate...........................    95

                         3.   Cash equal to the consideration, if any, or fair value of property released;
                              permissible reductions in amount.......................................................    96

                         4.   Opinion of counsel.....................................................................    99

                    B.   Redeemed prior lien bonds deemed paid.......................................................   100

                    C.   Release of property subject to prior lien; Trustee to accept certificate of
                         receipt of consideration by trustee or holder of prior lien in lieu of
                         consideration...............................................................................   100

Sec. 7.04      Sale or other disposition by Company and release by Trustees of property of fair value not
               in excess of $100,000 in any year.....................................................................   100

                    A.   Officers' certificate requesting the release................................................   101

                    B.   Further Officer's Certificate...............................................................   101

                    C.   Engineer's certificate......................................................................   101

                    D.   Opinion of counsel..........................................................................   101

                    E.   Deposit of consideration with Trustee.......................................................   101

                    F.   Appraiser's certificate in certain cases....................................................   101

                         If subject to prior lien, Trustee to accept certificate of receipt of
                         consideration by trustee or holder of prior lien in lieu of consideration...................   101


Sec. 7.05      Release of property taken by eminent domain or disposed of pursuant to requirement of
               public authority; fair value fixed by court or public authority taken as fair value...................   102

               Release of property purchased by municipality or public authority in exercise of right;
               price specified taken as fair value...................................................................   102

               Officers' certificate requesting release;  opinion of counsel as to power of eminent domain
               or of public authority or municipality................................................................   102

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Sec. 7.06    Purchaser in good faith not bound to make inquiry............  103
Sec. 7.07    Receiver, trustee in bankruptcy, or assignee may exercise
             power to dispose of property with approval of Trustee;
             exercise of powers by Trustees in possession.................  103
             Trustees not required to, but may in discretion of Trustee,
             release mortgaged property when Company is in default........  104
Sec. 7.08    Release of property by Trustee...............................  104
                A.  Officer's Certificate.................................  104
                B.  Engineer's Certificate................................  104
                C.  Further Engineer's Certificate........................  105
                D.  Opinion of counsel....................................  105
Sec. 7.09    Quit claim of property not subject to Lien...................  105

                                 ARTICLE VIII.

                 APPLICATION OF MONEYS RECEIVED BY THE TRUSTEE.

Sec. 8.01    Moneys held by Trustee as part of trust estate (except
             moneys received for special trust or similar fund) to be
             paid out upon order of the Company, if not in default........  106
                A.  Against net property additions; deductions for
                    prior liens...........................................  106
                B.  Against deposit, payment, reduction or ascertainment
                    of invalidity of prior lien bonds.....................  107
                C.  Against bonds surrendered for conversion, paid,
                    redeemed or otherwise surrendered and cancelled.......  107
                D.  In case of proceeds of insurance, against replacement
                    of damaged or destroyed property......................  108
                E.  In case of moneys deposited on account of judgment
                    liens, against amounts of lien upon discharge.........  108
                F.  In case of certain moneys deposited pursuant to
                    Section 7.03 or 7.05 of Article VII, against payment
                    of certain Federal taxes; limitations.................  108
             Redeemed prior lien bonds deemed paid........................  110
Sec. 8.02    Moneys held by Trustee not otherwise disposed of and not
             required for other purposes to be applied on order of
             Company to purchase or redemption of bonds or prior lien
             bonds........................................................  111
             Method of purchase of bonds or prior lien bonds by Trustee...  111
             Cancellation of bonds purchased..............................  111

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Company to pay Trustee excess of purchase price over principal amount of bonds and cost of
advertising ................................................................................................. 111
Trustee to pay Company excess of aggregate principal amount of bonds purchased over purchase price .......... 112
Sec. 8.03 Deposit of cash with Trustee for payment or redemption of bonds; application of deposited moneys ............ 112
Moneys unclaimed for two years after maturity or redemption dates to be repaid to Company; publication of
notice by Trustee ........................................................................................... 112
Sec. 8.04 Investment and reinvestment of cash held by Trustee; payment of interest to Company; sale of investments
by Trustee .................................................................................................. 113
Securities invested in by Trustee to be accepted by Company in lieu of cash .................................. 114
Sec. 8.05 Consent to release of cash held by trustee of prior lien; certification required to authorize release ....... 114
Sec. 8.06 Receiver, trustee in bankruptcy, assignee for benefit of creditors or Trustees in possession of trust estate
may exercise powers of Company under Article VIII ........................................................... 115

ARTICLE IX.
REMEDIES.

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Sec. 9.01      Events of default defined ...................................................................................  115
               Trustee or not less than 25% of bondholders may declare bonds due and payable if event of default occurs ....  117
Sec. 9.02      Trustee's rights on default:
                    A.   To enter and operate trust estate; application of income; restoration of possession ...............  117
                    B.   Power of sale .....................................................................................  119
                    C.   To enforce or foreclose by judicial proceedings ...................................................  119
Sec. 9.03      Judicial sale of property; appointment of receiver ..........................................................  119
Sec. 9.04      Sale of property as an entirety or in several parcels .......................................................  119
Sec. 9.05      Notice of sale ..............................................................................................  120
Sec. 9.06      Adjournment of sale .........................................................................................  120
Sec. 9.07      Receipt of Trustee for purchase money sufficient discharge to purchaser at sale .............................  120
Sec. 9.08      Use of bonds in payment of purchase price ...................................................................  121
Sec. 9.09      Trustees to execute and deliver deed to purchaser ...........................................................  121
Sec. 9.10      Entire title and interest of Company divested by sale .......................................................  121
Sec. 9.11      Application of proceeds of sale .............................................................................  122
Sec. 9.12      Principal of bonds to become due in case of sale ............................................................  122

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Sec.  9.13   Covenant to pay principal and interest to Trustees in case
             of default.................................................   123

             Right of Trustees to enforce payment and recover judgment..   123

             Application of moneys collected by Trustees................   124

Sec.  9.14   Trustees empowered to institute suits to prevent impairment
             of lien....................................................   124

Sec.  9.15   Waiver of stay, extension, valuation, appraisement and
             redemption laws............................................   124

Sec.  9.16   Company may surrender possession of trust estate to
             Trustees; voluntary receivership; application of
             income.....................................................   125

Sec.  9.17   Control of proceedings by a majority of bondholders........   125

Sec.  9.18   Exercise of remedies by bondholders; conditions precedent..   126

             Court may assess costs against parties seeking to enforce
             rights in certain cases....................................   126

Sec.  9.19   Waiver of default; rescission of acceleration of maturity;
             restoration of parties to former position; delay or omission
             not a waiver; remedies cumulative..........................   127

Sec.  9.20   Right of Trustee to file proof of debt, claim, etc. on
             behalf of bondholders; Trustee appointed attorney-in-fact of
             bondholders for such purposes..............................   128

Sec.  9.21   Rights, remedies and powers under Article IX subject to
             applicable laws, etc. .....................................   129

                                   ARTICLE X.
                           Concerning the Bondholders.

Sec. 10.01   Bearers and registered holders deemed owners of bonds......   129

Sec. 10.02   Instruments executed by bondholders; proof of execution
             and of ownership of bonds..................................   130

Sec. 10.03   Right of Trustees and Company to inspect bonds; future
             bondholders bound by request and consent of present
             holders....................................................   130

Sec. 10.04   Trustees may act without possession of bonds...............   130

                                  ARTICLE XI.
                Immunities of Officers, Directors, Incorporators,
                          Subscribers and Stockholders

Sec. 11.01   No recourse against officers, directors, incorporators,
             subscribers, and stockholders, obligations issued under
             Indenture solely corporate obligations; personal liability
             waived.....................................................   130

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ARTICLE XII.

THE TRUSTEES.

Sec. 12.01     Conditions of Trustees' acceptance of trust ............   131
                    A.   Compensation of Trustees; expenses; lien;
                         indemnity by Company .........................   131
                    B.   May act through agents or attorneys ..........   132
                    C.   Not responsible for recitals in Indenture or
                         bonds, validity or sufficiency of Indenture
                         or bonds, title, security or value of trust
                         estate; not accountable for use by Company of
                         bonds or proceeds thereof ....................   132
                    D.   No obligation to act at request of bondholders
                         without security or indemnity, subject to
                         Section 12.02 of this Article ................   132
                    E.   May rely on opinions of counsel to extent
                         permitted by Section 12.02 of this Article ...   132
                    F.   May rely on certificate of Secretary or
                         Assistant Secretary as to adoption of
                         resolutions to extent permitted by Section
                         12.02 of this Article ........................   132
                    G.   Action taken at request of bondholders binding
                         on future bondholders ........................   133
                    H.   Not liable for debts or damages incurred in
                         case of entry upon and operation of trust
                         property .....................................   133
                    I.   May rely on resolutions, certificates,
                         statements, etc., to the extent permitted by
                         Section 12.02 of this Article ................   133
                    J.   Moneys received by Trustee constitute trust
                         funds but need not be segregated .............   133
Sec. 12.02     Trustees not relieved from liability for negligent or
               willful misconduct .....................................   133
                    A.   Prior to event of default, Trustees liable
                         only for performance of duties specified in
                         Indenture, and may rely on resolutions,
                         certificates, statements, etc. furnished them
                         pursuant to Indenture ........................   133
                    B.   Trustee not liable for error of judgment made
                         in good faith by responsible officer unless
                         negligent in ascertaining facts ..............   134
                    C.   Trustees not liable for action taken or
                         omitted in good faith when directed by holders
                         of majority of bonds .........................   134
               After event of default, Trustees to use same degree of
               care and skill as prudent man ..........................   134

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               Trustees may, and if requested by holders of majority
               of bonds shall, make further investigation of matters
               stated in resolutions, certificates, statements, etc.;
               conditions precedent......................................  134

               Right to examine books, records and premises of
               Company at expense of Company.............................  134

Sec. 12.03     Trustees to notify bondholders of defaults; withholding
               of notice.................................................  135

               No notice of default required if default has been cured...  135

Sec. 12.04     Trustees to eliminate any conflicting interest or resign..  135

               Certain interest deemed to be conflicting.................  136

               Definitions of "security," "obligation in default,"
               "owner or holder," "underwriter," and "person" for
               purposes of this Section 12.04............................  138

               Method of calculation of percentages of securities for
               purposes of this Section 12.04............................  139

Sec. 12.05     Resignation of Trustee upon its ceasing to be bank or
               trust company in good standing with combined capital and
               surplus of not less than $5,000,000; procedure upon
               failure of Trustees to eliminate conflicting interest
               or to resign..............................................  140

Sec. 12.06     Resignation of Trustees; notice...........................  141
               Removal of Trustees; appointment of successor Trustees;
               qualifications of successor Trustees......................  142


Sec. 12.07     Execution of instruments by successor and retiring
               Trustee and by Company; vesting of trust estate in
               successor Trustee; notice.................................  143

Sec. 12.08     Merger or consolidation of Trustee; authentication of
               bonds by successor Trustee................................  144

Sec. 12.09          A.   Trustees, if a creditor of the Company, to set
                         apart and hold in a special account amounts
                         realized on certain claims against Company
                         within four months prior to default or
                         subsequent to default...........................  144
                    B.   Right of Trustees to retain for own account
                         certain amounts realized on claims against
                         Company.........................................  145
                    C.   Apportionment of funds and property held in
                         special account.................................  146
                    D.   Effect of resignation or removal of Trustees....  147
                    E.   Definitions of "default" and "indenture
                         security holders"...............................  148
                    F.   Trustees not required to account if creditor
                         relationship arises from certain transactions;
                         definitions of "security," cash transaction"
                         and "self-liquidating paper"....................  148

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SEC. 12.10 A. Trustees to transmit to bondholders annual report as to:
1. Eligibility and qualification of Trustees..................................................... 149
2. Advances, remaining unpaid, made as Trustees.................................................. 149
3. Indebtedness owed by Company to Trustees in individual capacities and property held as
collateral security therefor.................................................................. 150
4. Property and funds in possession of Trustees.................................................. 150
5. Release of mortgaged property not previously reported......................................... 150
6. Any additional issue of bonds under Indenture not previously reported......................... 150
7. Any action materially affecting bonds or trust estate taken by Trustees and not
previously reported........................................................................... 150

B. Trustees to transmit to bondholders, within ninety days, a brief report with respect to:
1. Release or substitution of property if fair value is 10% or more of outstanding bonds......... 150
2. Advances made by Trustees as such since date of last report if amount unpaid at any time
exceeds 10% of outstanding bonds.............................................................. 151

C. Reports and notices to be transmitted by mail to registered owners of bonds, bondholders who have
within two years filed names with Trustee, and bondholders whose names are preserved by Trustee
pursuant to subdivision A. of Section 12.11 of this Article....................................... 151

D. Trustee to file copies of reports and notices with each stock exchange upon which bonds are
listed and with the Securities and Exchange Commission............................................ 151

Sec. 12.11 A. Trustee to preserve, in current form, names and addresses of bondholders; destruction
of old lists...................................................................................... 151

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B. Application by bondholders desiring to

                         communicate with other bondholders; Trustee
                         may elect either to afford access to list
                         of bondholders or mail, at applicants'
                         expense, communication specified in request;
                         application to Securities and Exchange
                         Commission where in opinion of Trustee mailing
                         would be contrary to best interests of
                         bondholders or in violation of applicable
                         law ........................................... 152

                         Trustee not liable for disclosure of names and
                         addresses of bondholders or for mailing any
                         material pursuant to this Section 12.11 ....... 153

Sec. 12.12     Acquisition of bonds and coupons by Trustees ............ 153

Sec. 12.13     Trustees protected in complying with rules or orders of
               Securities and Exchange Commission made pursuant to Trust
               Indenture Act of 1939 ................................... 153

Sec. 12.14     Estate held by Trustees as joint tenants; notice to one
               is notice to both ....................................... 154

               Cash and securities to be held by Trustee; title vests in
               Trustees subject to disposition by Trustee; Individual
               Trustee to act on written request by Trustee; Individual
               Trustee may delegate powers to Trustee; removal of
               Individual Trustee ...................................... 154

               Trustee attorney-in-fact for Individual Trustee ......... 155

Sec. 12.15     Appointment of co-trustees; conditions of appointment
               and tenure .............................................. 156

Sec. 12.16     Appointment of Successor Trustee by Company ............. 158

ARTICLE XIII.

CONSOLIDATION, MERGER, CONVEYANCE AND LEASE.

Sec. 13.01     Consolidation, merger, conveyance or lease of all
               property by Company permitted; conditions; execution
               of supplemental indenture by successor to Company ....... 159

Sec. 13.02     Extent to which property of successor corporation
               shall become subject to lien of this Indenture;
               provisions of supplemental indenture .................... 159

Sec. 13.03     Powers of successor when all property subjected to
               lien of Indenture; issue of bonds in respect of property
               of successor ............................................ 161

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ARTICLE XIV.

MEETINGS OF BONDHOLDERS.

Sec. 14.01  Modifications of Indenture--in general ......................... 162
Sec. 14.02  Call and notice of meeting of bondholders ...................... 162
            Place when called by Trustee ................................... 162
            Written notice ................................................. 162
            Publication .................................................... 162
            When notice not required ....................................... 163
Sec. 14.03  Attendance at meetings ......................................... 164
            Trustee may make regulations as to deposits of bonds ........... 164
            Certificate in lieu of production of unregistered bonds ........ 165
Sec. 14.04  Persons entitled to vote at meetings ........................... 165
            When production of bonds and further proof necessary ........... 165
            Proxies--Acknowledgement ....................................... 165
Sec. 14.05  Temporary Chairman and Secretary ............................... 165
            Permanent Chairman and Secretary ............................... 166
            Inspectors of Votes ............................................ 166
Sec. 14.06  Quorum ......................................................... 166
            Notice of adjournment .......................................... 167
Sec. 14.07  Vote necessary for modification, alteration, etc. of Indenture.. 167
            Limitations on right of modification ........................... 167
Sec. 14.08  Record of meeting .............................................. 168
            Conclusiveness of meeting ...................................... 168
            Copy of resolution to be mailed to bondholders ................. 168
            Proof of mailing to be filed with Trustee ...................... 168
            Effect of failure to mail ...................................... 168
            Approval of resolution by Company .............................. 168
            Effective date of resolution ................................... 169
Sec. 14.09  Notation of action take may be made on bonds ................... 169
            New bonds ...................................................... 169
            When supplemental instrument may be executed ................... 169
Sec. 14.10    A. Trustee may receive written consent of bondholders in lieu
                 of holding a meeting ...................................... 170
              B. Acknowledgment of written consent ......................... 170
              C. Revocation of consent ..................................... 171

ARTICLE XV.

SUPPLEMENTAL INDENTURES.

Sec. 15.01  Purposes ....................................................... 171
            Supplemental indentures to conform to requirements of Trust
            Indenture Act of 1939 .......................................... 173

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Sec. 15.02     Trustees authorized to join in supplemental indenture; ap-
               plicability of supplemental indenture; form to be approved
               by counsel ...............................................   173

Sec. 15.03     Authority of Trustees to join in supplemental indentures
               and agreements; opinion of counsel; immunity of Trustees..   173

Sec. 15.04     Supplemental indentures deemed part of Indenture; refer-
               ence to supplemental indenture in bonds ..................   174

ARTICLE XVI.

                                  Defeasance.

Sec. 16.01     Satisfaction and discharge of Indenture ..................   174

Sec. 16.02     Payment of principal and interest on bonds; surrender and
               cancellation of bonds and coupons ........................   175

Sec. 16.03     Deposit of funds with Trustee for payment of bonds and
               coupons not presented when due discharges Company's
               liability ................................................   175

Sec. 16.04     Reissue of bonds reacquired by Company except bonds
               redeemed .................................................   176

Sec. 16.05     Bonds for the payment of which money or obligations of
               the United States are deposited are deemed paid--proviso..   176

ARTICLE XVII.

                           Miscellaneous Provisions.

Sec. 17.07     Successors of Company bound ..............................   177

Sec. 17.02     Benefits restricted to parties and holders of bonds and
               coupons ..................................................   177
Sec. 17.03     Bonds may have independent security ......................   178
Sec. 17.04     Certification by different officers, engineers, counsel
               or other persons .........................................   178
Sec. 17.05     Cremation of cancelled bonds and coupons; records ........   178
Sec. 17.06     Accounting practices of Company or its power to fix
               price and terms of sale of bonds not affected by
               Indenture ................................................   178
Sec. 17.07     Certificates and opinions as to compliance with
               conditions precedent .....................................   178
Sec. 17.08     Statements to be included  in certificates or opinions ...   179
Sec. 17.09     Required provisions under Trust Indenture Act of 1939
               to control provisions of Indenture .......................   179
Sec. 17.10     Choice of law ............................................   179

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PART III

THE TRUSTEES

                                    PART IV

                            MISCELLANEOUS PROVISIONS

TESTIMONIUM........................................................          182
EXECUTIONS.........................................................          182
ACKNOWLEDGMENTS....................................................          183
SCHEDULE A.........................................................          184

THIS TWENTY-NINTH SUPPLEMENTAL INDENTURE, dated as of the 15th day of July, 1989, between MICHIGAN CONSOLIDATED GAS COMPANY, a corporation duly organized and existing under and by virtue of the laws of the State of Michigan (hereinafter called the "Company"), having its principal place of business at 500 Griswold Street, Detroit, Michigan, party of the first part, and CITIBANK, N.A. (formerly First National City Bank), a national banking association incorporated and existing under and by virtue of the laws of the United States of America, having an office at 111 Wall Street in the Borough of Manhattan, The City of New York, New York, successor to CITY BANK FARMERS TRUST COMPANY (hereinafter with its predecessors as trustee called the "Trustee"), and ROBERT T. KIRCHNER, residing at 65-24 79th Place, Middle Village, New York, successor to RALPH E. MORTON as individual trustee (hereinafter with his predecessors as individual trustee called the "Individual Trustee"), as Trustees under the indenture hereinafter mentioned, parties of the second part (the Trustee and Individual Trustee being hereinafter together referred to as the "Trustees"):

Whereas, the Company has heretofore executed and delivered to the Trustees an Indenture of Mortgage and Deed of Trust (hereinafter called the "Indenture"), dated as of March 1, 1944, to secure the Company's First Mortgage Bonds, unlimited in aggregate principal amount except as therein otherwise provided:

a Supplemental Indenture of the same date; a Second Supplemental Indenture, dated as of March 1, 1947; a Third Supplemental Indenture, dated as of March 1, 1948; a Fourth Supplemental Indenture, dated as of November 1, 1950; a Fifth Supplemental Indenture, dated as of August 1, 1951; a Sixth Supplemental Indenture, dated as of January 15, 1954; a Seventh Supplemental Indenture, dated as of November 15, 1955; an Eighth Supplemental Indenture, dated as of December 2, 1955; a Ninth Supplemental Indenture, dated as of December 5, 1956; a Tenth Supplemental Indenture, dated as of June 15, 1957; an Eleventh Supplemental Indenture, dated as of May 15, 1961; a Twelfth Supplemental Indenture, dated as of January 15, 1962; a Thirteenth Supplemental Indenture, dated as of March 15, 1963; a Fourteenth Supplemental Indenture, dated as of May 15, 1964; a Fifteenth Supplemental Indenture, dated as of May 15, 1966; a Sixteenth Supplemental Indenture, dated as of May 15, 1967; a Seventeenth Supplemental Indenture, dated as of September 1, 1968; an Eighteenth Supplemental Indenture, dated as of November 15, 1968;

a Nineteenth Supplemental Indenture, dated as of June 1, 1970; a Twentieth Supplemental Indenture, dated as of July 1, 1972; a Twenty-first Supplemental Indenture, dated as of July 1, 1973; a Twenty-second Supplemental Indenture, dated as of July 15, 1974; a Twenty-third Supplemental Indenture, dated as of April 15, 1975; a Twenty-fourth Supplemental Indenture, dated as of September 15, 1976; a Twenty-fifth Supplemental Indenture, dated as of November 15, 1977; a Twenty-sixth Supplemental Indenture, dated as of November 15, 1981; a Twenty-seventh Supplemental Indenture, dated as of February 15, 1983; a Twenty-eighth Supplemental Indenture, dated as of February 1, 1987; and

WHEREAS, the Supplemental Indenture, dated as of March 1, 1944, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Tenth Supplemental Indenture, the Eleventh Supplemental Indenture, the Thirteenth Supplemental Indenture, the Fourteenth Supplemental Indenture, the Fifteenth Supplemental Indenture, the Sixteenth Supplemental Indenture, the Seventeenth Supplemental Indenture, the Eighteenth Supplemental Indenture, the Nineteenth Supplemental Indenture, the Twentieth Supplemental Indenture, the Twenty-first Supplemental Indenture, the Twenty-second Supplemental Indenture, the Twenty-third Supplemental Indenture, the Twenty-fourth Supplemental Indenture, the Twenty-fifth Supplemental Indenture, the Twenty-sixth Supplemental Indenture, the Twenty-seventh Supplemental Indenture and the Twenty-eighth Supplemental Indenture each provided for the creation of a series of the Company's First Mortgage Bonds; and each of said Supplemental Indentures, except the Supplemental Indenture dated as of March 1, 1944, also recorded the description of and confirmed unto the Trustees certain property; and the Fifteenth Supplemental Indenture also amended
Section 1 of Article II and Section 1 of Article IV of the Indenture; and the Eighth Supplemental Indenture designated Marc A. Rieffel as successor to Ralph E. Morton, as Individual Trustee; and the Ninth Supplemental Indenture designated Francis M. Pitt as successor to Marc A. Rieffel, as Individual Trustee; and the Twelfth Supplemental Indenture appointed The First National City Bank of New York as successor Trustee upon resignation and in place of First National City Trust Company; and the Seventeenth Supplemental Indenture also designated Blair A. Powell as successor to Francis M. Pitt, as Individual Trustee; and the Twentieth Supplemental Indenture also designated William

T. Hayes as successor to Blair A. Powell, as Individual Trustee; and the Twenty-fourth Supplemental Indenture made subject to the lien and operation of the Indenture certain base gas classified as excepted property under the Indenture; and the Twenty-fifth Supplemental Indenture also designated Robert T. Kirchner as successor to William T. Hayes, as Individual Trustee, and cured and corrected a defective provision in the Twenty-fourth Supplemental Indenture; and the Twenty-sixth Supplemental Indenture also corrected an erroneous property description in the Fifteenth Supplemental Indenture; and the Twenty-eighth Supplemental Indenture also will make certain amendments to the Indenture when all Bonds of the First through Twenty-fourth Series are no longer outstanding; and

WHEREAS, at the date hereof there were outstanding First Mortgage Bonds of the Company issued under the Indenture, of 9 series (all outstanding bonds of 16 other series having been previously retired) in the principal amounts set forth below:

                       DESIGNATION                             AMOUNT          AMOUNT
                        OF SERIES                         INITIALLY ISSUED   OUTSTANDING
                        ---------                         ----------------   -----------
First Mortgage Bonds
   5-7/8% Series due 1991 ..............................     $30,000,000     $19,584,000
First Mortgage Bonds
   6-1/2% Series due 1992 ..............................      35,000,000      23,336,000
First Mortgage Bonds
   7% Series due 1993 ..................................      25,000,000      17,172,000
First Mortgage Bonds
   7-1/2 % Series due December 1, 1993 .................      31,000,000      21,099,000
First Mortgage Bonds
   9-1/4% Series due 1996 ..............................      30,000,000      12,000,000
First Mortgage Bonds
   7-5/8% Series due 1997 ..............................      35,000,000      25,937,000
First Mortgage Bonds
   8-5/8% Series due 1997 ..............................      29,000,000      16,129,000
First Mortgage Bonds
   8-1/8% Series due 1998 ..............................      35,000,000      26,614,000
First Mortgage Bonds
   9-1/8% Series due 2017 ..............................      60,000,000      60,000,000

and

WHEREAS, the Company desires in and by this Twenty-ninth Supplemental Indenture to create a Twenty-sixth series of bonds to be issued under the Indenture, to designate or otherwise distinguish such series, to specify the particulars necessary to describe and define the same, and to specify such other provisions and agreements in respect thereof as are in the Indenture provided or permitted; and

WHEREAS, the Company also desires in and by this Twenty-ninth Supplemental Indenture to record the description of, and confirm unto the Trustees, but subject to the amendments, deletions and revisions provided for in Part II of this Twenty-ninth Supplemental Indenture, certain property acquired after the execution and delivery of the Twenty-eighth Supplemental Indenture, and now subject to the lien of the Indenture by virtue of the provisions thereof conveying to the Trustees property acquired after its execution and delivery; and

WHEREAS, the Company desires to amend the Indenture in its entirety effective when all bonds issued prior to March 1, 1987, are no longer outstanding or consent to the extent required by the provisions of the Indenture; and

WHEREAS, all the conditions and requirements necessary to make this Twenty-ninth Supplemental Indenture, when duly executed and delivered, a valid, binding and legal instrument in accordance with its terms and for the purposes herein expressed, have been done, performed and fulfilled, and the execution and delivery of this Twenty-ninth Supplemental Indenture in the form and with the terms hereof have been in all respects duly authorized;

NOW,THEREFORE, in consideration of the premises and in further consideration of the sum of One Dollar in lawful money of the United States of America paid to the Company by the Trustees at or before the execution and delivery of this Twenty-ninth Supplemental Indenture, the receipt whereof is hereby acknowledged, and of other good and valuable considerations, it is agreed by and between the Company and the Trustees as follows:

DESCRIPTION OF PROPERTY ACQUIRED AFTER EXECUTION AND DELIVERY OF THE TWENTY-EIGHTH SUPPLEMENTAL INDENTURE

The Company hereby confirms unto the Trustees, and records the description of, the property described in Schedule A attached hereto and expressly made a part hereof, which property has been acquired by the Company after the

execution and delivery of the Twenty-eighth Supplemental Indenture and which is now subject to the lien of the Indenture in all respects as if originally described therein, but subject to the amendments, deletions and revisions provided for in Part II of this Twenty-ninth Supplemental Indenture.

PART I

PROVISIONS RELATING TO SECURED MEDIUM-TERM NOTES, SERIES A

ARTICLE I.

CREATION OF AN ISSUE OF FIRST MORTGAGE BONDS, DESIGNATED AND DISTINGUISHED AS "SECURED MEDIUM-TERM NOTES, SERIES A".

SECTION 1. There is hereby created a twenty-sixth series of bonds to be issued under and secured by the Indenture, to be known as "First Mortgage Bonds," designated and distinguished as "Secured Medium-Term Notes, Series A" of the Company (herein sometimes called "Bonds of Twenty-sixth Series"). The Bonds of Twenty-sixth Series may be issued without limitation as to aggregate principal amount except as provided in the Indenture and in this Twenty-ninth Supplemental Indenture. The Bonds of Twenty-sixth Series shall be registered bonds without coupons and shall be dated as of the date of the authentication thereof by the Trustee.

Each Bond of Twenty-sixth Series shall mature on such date not less than 2 years nor more than 30 years from date of issue, shall bear interest at such rate or rates not in excess of 15-5/8 per cent per annum payable semi-annually on the first days of May and November of each year and at maturity (each an interest payment date) and have such other terms and provisions not inconsistent with the Indenture as the Board of Directors may determine in accordance with a resolution filed with the Trustee referring to this Twenty-ninth Supplemental Indenture; the principal, premium, if any, and interest on the Bonds of Twenty-sixth Series shall be payable in lawful money of the United States of America; the place where such principal and premium, if any, shall be payable shall be the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, New York, and the place where such interest shall be payable shall be the office or agency of the Company in said Borough of Manhattan, The City of New York, New York.

So long as there is no existing default in the payment of interest on the Bonds of Twenty-sixth Series, all Bonds of Twenty-sixth Series authenticated

by the Trustee after the record date hereinafter specified for any interest payment date, and prior to such interest payment date (unless the issue date hereinafter specified is after such record date) shall be dated the date of authentication, but shall bear interest from such interest payment date, and the person in whose name any Bond of Twenty-sixth Series is registered at the close of business on any record date with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding any transfer or exchange of such Bond of Twenty-sixth Series subsequent to the record date and on or prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name such Bond of Twenty-sixth Series is registered on the record date for the interest payment date fixed by the Company for the payment of such defaulted interest, provided that in no case shall such record date be less than ten days after notice thereof shall have been mailed to all registered holders of Bonds of Twenty-sixth Series; and provided that interest payable on a maturity date will be payable to the person to whom the principal thereof is payable. If the issue date of any Bond of Twenty-sixth Series is after such record date, such Bond shall bear interest from the issue date but payment of interest shall commence on the second interest payment date next succeeding the issue date. Any notice which is mailed as herein provided shall be conclusively presumed to have been properly and sufficiently given on the date of such mailing, whether or not the holder receives notice.

The term "record date" as used herein with respect to any interest payment date shall mean the last business day which is more than ten (10) calendar days prior to such interest payment date. The term "business day" as used herein shall mean any day other than a Saturday or Sunday or a day on which the offices of the Trustee in the Borough of Manhattan, The City and State of New York, are closed pursuant to authorization of law.

The term "issue date" as used herein with respect to Bonds of Twenty-sixth Series of a designated interest rate and maturity shall mean the date of first authentication of Bonds of such designated interest rate and maturity.

As used in this Section 1, the term "default in the payment of interest" means failure to pay interest on the applicable interest payment date disregarding any period OF grace permitted by Section 2 of Article IX of the Indenture.

SECTION 2. Each Bond of Twenty-sixth Series may be redeemable prior to maturity, at the option of the Company in whole at any time or in part from time to time, as the Board of Directors may determine in accordance with a resolution filed with the Trustee referring to this Twenty-ninth Supplemental Indenture, on notice given in the manner set forth in Article IV of the Indenture and as in this Section 2 provided; provided, however, that if at the time of mailing of any notice of redemption of Bonds of Twenty-sixth Series, the Company shall not have deposited with the Trustee and/or irrevocably directed the Trustee to apply, from money held by it available to be used for the redemption of Bonds of Twenty-sixth Series, an amount in cash sufficient to redeem all of the Bonds of Twenty-sixth Series called for redemption, such notice may state that it is subject to the receipt of the redemption monies by the Trustee before the date fixed for redemption and such notice shall be of no effect unless such monies are so received before such date; provided further, however, that if any Bond of the Twenty-sixth Series states that it may not be redeemed at the option of the Company through a refunding, directly or indirectly, by or in anticipation of the incurring of any debt which has an interest cost to the Company of less than the effective interest cost of such Bond, the term "interest cost to the Company" shall mean the annual percentage yield to stated maturity of the debt at the net price to the Company therefor, determined by reference to a standard table of bond yields, with a straight-line interpolation if necessary. The "net price to the Company" shall be determined after adding all premiums and deducting all discounts, commissions, stand-by or commitment charges and any other compensation received or receivable directly from the Company by underwriters, investment bankers or other financing agents or purchasers. Prior to each redemption of any Bonds of Twenty-sixth Series at the option of the Company which by their terms are subject to the restrictions of this proviso, the Company will deliver to the Trustee an officers' certificate showing compliance with the proviso in the third preceding sentence prior to the "Limitation Date" specified on such Bonds.

In case the Company shall at any time elect to redeem all or any part of the Bonds of Twenty-sixth Series, it shall give notice to the effect that it intends to redeem all or a part thereof, as the case may be, on a date therein designated, specifying in case of redemption of a part of the Bonds of Twenty-sixth Series the distinctive numbers of the bonds to be redeemed and, if applicable, the portion of the bond to be redeemed and if at the time of mailing of any such notice of redemption of Bonds of Twenty-sixth Series the Company shall not have deposited with the Trustee and/or irrevocably directed the Trustee to apply, from money held by it available to be used for the redemption of Bonds

of Twenty-sixth Series an amount in cash sufficient to redeem all of the bonds called for redemption, including accrued interest to such date fixed for redemption, such notice may state that it is subject to the receipt of the redemption monies by the Trustee before the date fixed for redemption and such notice shall be of no effect unless such monies are so received before such date.

Such notice, in the case of redemption of Bonds of Twenty-sixth Series at the option of the Company, shall be given by mail by the Company, postage prepaid, at least thirty days prior to such redemption date, to the holders of all Bonds of Twenty-sixth Series to be so redeemed, at the addresses that shall appear upon the register thereof. Any notice which is mailed as herein provided shall be conclusively presumed to have been properly and sufficiently given on the date of such mailing, whether or not the holder receives the notice. In any case, failure to give due notice by mail, or any defect in the notice, to the registered owners of any Bonds of Twenty-sixth Series designated for redemption as a whole or in part, shall not affect the validity of the proceedings for the redemption of any other bonds.

If less than the whole principal amount of a Bond of Twenty-sixth Series shall be called for redemption, the Company shall execute and the Trustee shall authenticate and deliver, without charge, to the holder thereof, a Bond or Bonds of Twenty-sixth Series (but only of authorized denominations) for the unredeemed balance of the principal amount of the Bond of Twenty-sixth Series surrendered.

SECTION 3. The Bonds of Twenty-sixth Series shall be registered bonds without coupons. Bonds of Twenty-sixth Series may be issued in the denomination of $1,000 or any integral multiple thereof.

The forms of Bonds of Twenty-sixth Series shall be substantially as follows (any of the provisions of such Bond may be set forth on the reverse side thereof):

[FORM OF REDEEMABLE BOND, IF ANY, OF TWENTY-SIXTH SERIES]

MICHIGAN CONSOLIDATED GAS COMPANY
SECURED MEDIUM-TERM NOTE, SERIES A

                                being a series of
                              FIRST MORTGAGE BONDS

ISSUE DATE:              INITIAL REDEMPTION DATE:            LIMITATION DATE:

MATURITY DATE:           INITIAL PERCENTAGE:                 PAR DATE:

INTEREST DATE:           REDUCTION PERCENTAGE:

The Optional Redemption Price, if any, shall initially be the Initial Percentage specified above of the principal amount of this bond to be redeemed and, unless otherwise provided in the space below, shall decline by equal amounts at each anniversary of the Initial Redemption Date by the Reduction Percentage specified above of the principal amount to be redeemed, until the Par Date specified above, when the Optional Redemption Price is 100% of such principal amount. If applicable, this bond shall not be redeemed at the option of the Company prior to the Limitation Date specified above, through a refunding, directly or indirectly, by or in anticipation of the incurring of any debt which has an effective interest cost to the Company (as defined in the Twenty-ninth Supplemental Indenture) of less than the effective interest cost to this bond.

ADDITIONAL REDEMPTION PRICES, IF ANY:

MICHIGAN CONSOLIDATED) GAS COMPANY (hereinafter called the "Company"), a corporation of the State of Michigan, for value received, hereby promises to pay to......................................... or registered assigns, the sum of................... Dollars on the Maturity Date specified above, at the corporate trust office of the Trustee hereinafter named in the Borough of Manhattan, The City of New York, New York or at the principal office of any successor in trust, in lawful money of the United States of America, and to pay interest thereon at the Interest Rate specified above, in like lawful money payable semi-annually at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York on the first day of May and November in each year and on the Maturity Date (each an interest payment date) from the Issue Date specified above or from the most recent interest payment date to which interest has been paid, commencing on the interest payment date next succeeding the Issue Date, until the Company's obligation with respect to the payment of such principal sum shall be discharged as provided in the indentures hereinafter mentioned; provided, however, if the date of this bond is after a record date with respect to any interest payment date and prior to such interest payment date, then interest shall be payable only from such interest payment date (unless the Issue Date is after such record date). If the Issue Date is after such record date, then payment of interest shall commence on the second interest payment date succeeding the Issue Date (but shall be payable from the Issue Date). If the Company shall default in the payment of interest due on any interest payment date, then interest shall be payable from the next preceding interest payment date to which interest has been paid, or, if no such interest has been paid on

the bonds, from the Issue Date, so long as there is no existing default in the payment of interest the person in whose name this bond was registered at the close of business on any record date with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date, except that if the Company shall default in the payment of interest due on such interest payment date such defaulted interest shall be paid to the person in whose name this bond is registered on the record date for the interest payment date fixed by the Company for the payment of such defaulted interest, provided that in no case shall such record date be less than ten days after notice thereof shall have been mailed to all registered holders of bonds of this series. The term "record date" shall mean the last business day which is more than ten calendar days prior to such interest payment date.

This bond is one, of the series hereinafter specified, of the bonds of the Company (herein called the "bonds") known as its "First Mortgage Bonds," issued and to be issued in one or more series under, and all equally and ratably secured by, an Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, duly executed by the Company to City Bank Farmers Trust Company (Citibank, N.A., successor trustee, herein called the "Trustee") and Ralph E. Morton (Robert T. Kirchner, successor Individual Trustee), Trustees, to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security, the terms and conditions upon which the bonds are, and are to be, issued and secured, and the rights of the holders of the bonds and of the Trustees in respect of such security. As provided in said Indenture, the bonds may be for various principal sums and are issuable in series, which may mature at different times, may bear interest at different rates and may otherwise vary as therein provided; and this bond is one of a series entitled "First Mortgage Bonds," designated "Secured Medium-Term Notes, Series A," herein called Secured Medium-Term Notes, Series A, created by the Twenty-ninth Supplemental Indenture dated as of July 15, 1989 as provided for in said Indenture.

With the consent of the Company and to the extent permitted by and as provided in the Indenture, as supplemented, the rights and obligations of the Company and/or the rights of the holders of the Bonds of the Twenty-sixth Series and/or the terms and provisions of the Indenture may be modified or altered by such affirmative vote or votes of the holders of the bonds then outstanding as are specified in the Indenture, as supplemented.

Notice of any redemption of this bond to be redeemed at the option of the Company (which notice may be made subject to receipt of the redemption monies by the Trustee before the date fixed for redemption) shall be given by mail at least thirty days prior to the redemption date, subject to the conditions set forth as more fully provided in said Indenture and in said Twenty-ninth Supplemental Indenture.

In the event that any bond shall not be presented for payment when the principal thereof becomes due, either at maturity or otherwise or at the date fixed for the redemption thereof, and the Company shall have on deposit with the Trustee in trust for the purpose, on the date when such bond is so due, funds sufficient to pay the principal of such bond (and premium, if any), together with all interest due thereon to the Maturity Date of such bond or to the date fixed for the redemption thereof, for the use and benefit of the registered owner thereof, then all liability of the Company to the registered owner of said bond for the payment of the principal thereof and interest thereon (and premium, if any), shall forthwith cease, determine and be completely discharged and such registered owner shall no longer be entitled to any lien or benefit of said Indenture.

In case an event of default as defined in said Indenture shall occur, the principal of this bond may become or be declared due and payable in the manner, with the effect, and subject to the conditions provided in said Indenture.

This bond is transferable by the registered owner hereof in person, or by attorney duly authorized in writing, at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, New York, upon surrender and cancellation of this bond, and upon any such transfer a new registered bond or bonds of the same series for the same aggregate principal amount, interest rate or rates, issue date, maturity date and redemption provisions, if any, will be issued to the transferee or transferees in exchange herefor; and bonds of this series may, at the option of the registered owners and upon surrender at said office, be exchanged for registered bonds of this series of the same aggregate principal amount, interest rate or rates, issue date, maturity date, and redemption provisions, if any, in larger or smaller authorized denominations, all without service charge (except for any stamp tax or other governmental charge).

No recourse shall be had for the payment of the principal of, or the interest on, this bond, or for any claim based hereon or otherwise in respect hereof or

of said Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company, as such, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being waived and released by every owner hereof by the acceptance of this bond and as part of the consideration for the issue hereof, and being likewise waived and released by the terms of said Indenture.

This bond shall not be valid or become obligatory for any purpose unless and until the certificate hereon shall have been executed by the Trustee or its successor in trust under said Indenture.

IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused this bond to be executed in its name with the facsimile signature of its President or one of its Vice-Presidents, and a facsimile of its corporate seal to be imprinted hereon and attested with the facsimile signature of its Secretary or one of its Assistant Secretaries.

Dated:................................

MICHIGAN CONSOLIDATED GAS COMPANY,

BY .........................................
President

Attest:

......................................

Secretary

The form of Trustee's certificate to be borne by all Bonds of Twenty-sixth Series shall be substantially as follows:

[FORM OF TRUSTEE'S CERTIFICATE]

This bond is one of the bonds of the series designated therein, described in the within-mentioned Indenture and Twenty-ninth Supplemental Indenture.

CITIBANK, N.A., as Trustee,

BY .........................................
Authorized Officer

[FORM OF NON-REDEEMABLE BOND, IF ANY, OF TWENTY-SIXTH SERIES]

MICHIGAN CONSOLIDATED GAS COMPANY
SECURED MEDIUM-TERM NOTE, SERIES A
being a series of
FIRST MORTGAGE BONDS

ISSUE DATE: MATURITY DATE: INTEREST RATE:

MICHIGAN CONSOLIDATED GAS COMPANY (hereinafter called the "Company"), a corporation of the State of Michigan, for value received, hereby promises to pay to .......................................................................... or registered assigns, the sum of .............. Dollars on the Maturity Date specified above, at the corporate trust office of the Trustee hereinafter named in the Borough of Manhattan, The City of New York, New York, or at the principal office of any successor in trust, in lawful money of the United States of America, and to pay interest thereon at the Interest Rate specified above, in like lawful money payable semi-annually at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York on the first day of May and November in each year and on the Maturity Date (each an interest payment date) from the Issue Date specified above or from the most recent interest payment date to which interest has been paid, commencing on the interest payment date next succeeding the Issue Date, until the Company's obligation with respect to the payment of such principal sum shall be discharged as provided in the indentures hereinafter mentioned; provided, however, if the date of this ,bond is after a record date with respect to any interest payment date and prior to such interest payment date, then interest shall be payable only from such interest payment date (unless the Issue Date is after such record date). If the Issue Date is after such record date, then payment of interest shall commence on the second interest payment date succeeding the Issue Date (but shall be payable from the Issue Date). If the Company shall default in the payment of interest due on any interest payment date, then interest shall be payable from the next preceding interest payment date to which interest has been paid, or, if no such interest has been paid on the bonds, from the Issue Date; so long as there is no existing default in the payment of interest the person in whose name this bond was registered at the close of business on any record date with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date, except that if the company shall default in the payment of interest due on such

interest payment date such defaulted interest shall be paid to the person in whose name this bond is registered on the record date for the interest payment date fixed by the Company for the payment of such defaulted interest, provided that in no case shall such record date be less than ten days after notice thereof shall have been mailed to all registered holders of bonds of this series. The term "record date" shall mean the last business day which is more than ten calendar days prior to such interest payment date.

This bond is one, of the series hereinafter specified, of the bonds of the Company (herein called the "bonds") known as its "First Mortgage Bonds," issued and to be issued in one or more series under, and all equally and ratably secured by, an indenture of Mortgage and Deed of Trust dated as of March 1, 1944, duly executed by the Company to City Bank Farmers Trust Company (Citibank, N.A., successor trustee, herein called the "Trustee") and Ralph E. Morton (Robert T. Kirchner, successor Individual Trustee), Trustees, to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security, the terms and conditions upon which the bonds are, and are to be, issued and secured, and the rights of the holders of the bonds and of the Trustees in respect of such security. As provided in said Indenture, the bonds may be for various principal sums and are issuable in series, which may mature at different times, may bear interest at different rates and may otherwise vary as therein provided; and this bond is one of a series entitled "First Mortgage Bonds," designated "Secured Medium-Term Notes, Series A," herein called Secured Medium-Term Notes, Series A, created by the Twenty-ninth Supplemental Indenture dated as of July 15, 1989 as provided for in said Indenture.

This Bond shall not be redeemable prior to the Maturity Date.

In the event that any bond shall not be presented for payment when the principal thereof becomes due at maturity and the Company shall have on

deposit with the Trustee in trust for the purpose, on the date when such bond is so due, funds sufficient to pay the principal of such bond (and premium, if any), together with all interest due thereon to the Maturity Date of such bond for the use and benefit of the registered owner thereof, then all liability of the Company to the registered owner of said bond for the payment of the principal thereof and interest thereon (and premium, if any), shall forthwith cease, determine and be completely discharged and such registered owner shall no longer be entitled to any lien or benefit of said Indenture.

No recourse shall be had for the payment of the principal of, or the interest on, this bond, or for any claim based hereon or otherwise in respect hereof or of said Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company, as such, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being waived

and released by every owner hereof by the acceptance of this bond and as part of the consideration for the issue hereof, and being likewise waived and released by the terms of said Indenture.

This bond shall not be valid or become obligatory for any purpose unless and until the certificate hereon shall have been executed by the Trustee or its successor in trust under said Indenture.

Dated:................................

MICHIGAN CONSOLIDATED GAS COMPANY,

By .........................................
President

Attest:

......................................

Secretary

The form of Trustee's certificate to be borne by all Bonds of Twenty-sixth Series shall be substantially as follows:

[FORM OF TRUSTEE'S CERTIFICATE]

This bond is one of the bonds of the series designated therein, described in the within-mentioned Indenture and Twenty-ninth Supplemental Indenture.

CITIBANK, N.A., as Trustee,

By .........................................

Authorized Officer

SECTION 4. Bonds of Twenty-sixth Series shall be exchangeable, at the option of the registered owners thereof and upon surrender thereof at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, New York, for registered bonds of the same aggregate principal amount,

issue date, maturity date, interest rate or rates, and redemption provisions, if any, but of different authorized denomination or denominations, such exchanges to be made without service charge (except for any stamp tax or other governmental charge).

Every bond so surrendered shall be accompanied by a proper transfer power duly executed by the registered owner or by duly authorized attorney transferring such bond to the Company, and the signature to such transfer power shall be guaranteed to the satisfaction of the Trustee. All bonds so surrendered shall be forthwith cancelled and delivered to or upon the order of the Company. All bonds executed, authenticated and delivered in exchange for bonds so surrendered shall be valid obligations of the Company, evidencing the same debt as the bonds surrendered, and shall be secured by the same lien and be entitled to the same benefits and protection as the bonds in exchange for which they are executed, authenticated and delivered.

The Company shall not be required to make any such exchange or any registration of transfer (1) during a period of fifteen days next preceding any interest payment date, but only if there is an existing default in the payment of interest on the Bonds of Twenty-sixth Series or (2) after the bond so presented for exchange or registration of transfer, or any portion thereof, has been called for redemption and notice thereof given to the registered owner.

SECTION 5. Pending the preparation of definitive Bonds of Twenty-sixth Series the Company may from time to time execute, and upon its written order, the Trustee shall authenticate and deliver, in lieu of such definitive bonds and subject to the same provisions, limitations and conditions, one or more temporary printed, lithographed or typewritten bonds, in registered form, of any denomination specified in the written order of the Company for the authentication and delivery thereof, and with such omissions, insertions and variations as may be determined by the Board of Directors of the Company. Such temporary bonds shall be substantially of the tenor of the bonds to be issued as hereinbefore recited, but such temporary bonds may, in lieu of the statement of the specific redemption prices required to be set forth in Bonds of Twenty-sixth Series in definitive form, include a reference to this Twenty-ninth Supplemental Indenture for a statement of such redemption prices.

If any such temporary Bonds of Twenty-sixth Series shall at any time be so authenticated and delivered in lieu of definitive bonds, the Company shall upon request at its own expense prepare, execute and deliver to the Trustee

and thereupon, upon the presentation and surrender of temporary bonds, the Trustee shall authenticate and deliver in exchange therefor, without charge to the holder, definitive bonds of the same series, interest rate or rates, issue date, maturity date, redemption provision, if any, and for the same principal sum in the aggregate as the temporary bonds surrendered. All temporary bonds so surrendered shall be forthwith cancelled by the Trustee and delivered to or upon the order of the Company. Until exchanged for definitive bonds the temporary bonds shall in all respects be entitled to the lien and security of the Indenture and all supplemental indentures.

ARTICLE II.

ISSUE OF BONDS OF TWENTY-SIXTH SERIES.

Bonds of Twenty-sixth Series in the aggregate principal amount of $60,000,000 may be executed, authenticated and delivered from time to time only as permitted by the provisions of Section 6 of Article III of the Indenture.

PART II

RESTATEMENT OF INDENTURE

WHEN (A) ALL BONDS ISSUED PRIOR TO MARCH 1, 1987 ARE NO LONGER OUTSTANDING OR THE HOLDERS OF ANY SUCH BONDS REMAINING OUTSTANDING HAVE CONSENTED (THE HOLDERS OF ALL BONDS ISSUED ON OR AFTER MARCH 1, 1987 BY THE ACCEPTANCE OF SUCH BONDS HAVING CONSENTED TO THIS AMENDMENT AND RESTATEMENT), (B) THE TRUSTEE HAS RECEIVED AN OFFICERS' CERTIFICATE STATING IN SUBSTANCE THAT THE COMPANY IS NOT IN DEFAULT UNDER ANY TERMS OR COVENANTS OF THE INDENTURE AND COMPLYING WITH SECTIONS 7 AND 8 OF ARTICLE XVII AS THEN IN EFFECT, (C) THE TRUSTEE HAS RECEIVED AN OPINION OF COUNSEL DATED THE DATE OF SUCH OFFICERS' CERTIFICATE COMPLYING WITH SECTIONS 7 AND 8 OF ARTICLE XVII AS THEN IN EFFECT, AND (D) THE TRUSTEE HAS RECEIVED AN ACCOUNTANT'S CERTIFICATE DATED THE DATE OF SUCH OFFICERS' CERTIFICATE STATING IN SUBSTANCE THAT THE

AGGREGATE PRINCIPAL AMOUNT OF ALL BONDS TO BE OUTSTANDING IMMEDIATELY FOLLOWING THIS AMENDMENT AND RESTATEMENT BECOMING EFFECTIVE DOES NOT EXCEED SIXTY PER CENT (60%) OF THE COST OF THE BONDED PROPERTIES TO BE SUBJECT TO THE LIEN OF THIS INDENTURE IMMEDIATELY FOLLOWING THIS AMENDMENT AND RESTATEMENT BECOMING EFFECTIVE THEN THE INDENTURE OF MORTGAGE AND DEED OF TRUST AS SUPPLEMENTED OR AMENDED THROUGH FEBRUARY 28, 1987 IS HEREBY AMENDED AND RESTATED EFFECTIVE THE DATE OF SUCH OFFICERS' CERTIFICATE TO READ IN ITS ENTIRETY, SUBJECT TO AMENDMENTS, DELETIONS OR REVISIONS, IF ANY, APPLICABLE TO THIS AMENDMENT AND RESTATEMENT AFTER MARCH 1, 1987, TO READ AS FOLLOWS:

INDENTURE OF MORTGAGE AND DEED OF TRUST, dated as of the 1st day of March, 1944, between MICHIGAN CONSOLIDATED GAS COMPANY, a corporation duly organized and existing under and by virtue of the laws of the State of Michigan (hereinafter called the "Company"), party of the first part, and CITY BANK FARMERS TRUST COMPANY to which on the date of the Twenty-ninth Supplemental Indenture hereto CITIBANK, N.A., a national banking association incorporated and existing under and by virtue of the laws of the United States of America, having an office at 111 Wall Street in the Borough of Manhattan, The City of New York, New York is successor (hereinafter called the "Trustee"), and RALPH E. MORTON to whom on the date of the Twenty-ninth Supplemental Indenture hereto ROBERT T. KIRCHNER, residing at 65-24 79th Place, Middle Village, New York is successor (hereinafter called the "Individual Trustee"), parties of the second part (the Trustee and Individual Trustee being hereinafter together referred to as the "Trustees"):

WHEREAS, the Company is authorized by law, and deems it necessary from time to time, to borrow money for its proper corporate purposes, and to that end, in exercise of said authority, has duly authorized and directed the issue of its bonds, not limited in aggregate principal amount except as otherwise hereinafter provided, to be known as its First Mortgage Bonds, to be issued in one or more series, the bonds of each series to bear such date, to mature on such date or dates, to bear such rate or rates of interest and to contain such other specifications and provisions as are hereinafter in this Indenture provided

or permitted, the bonds of each series to be issuable originally either as coupon bonds registrable as to principal and/or as registered bonds without coupons, as the Company shall elect; and in order to secure the payment of the principal of, and interest on, the bonds, to provide for the authentication thereof by the Trustee and to establish and declare the terms and conditions upon which the bonds are to be issued, received and held, the Company has duly authorized and directed the execution and delivery of this Indenture; and

WHEREAS, the bonds, the coupons to be attached to the coupon bonds and the certificate of the Trustee to be borne by the bonds, are to be substantially in the following forms, respectively, with such appropriate omissions, insertions and variations as are in this Indenture or in any indenture supplemental hereto provided or permitted:

[GENERAL FORM OF COUPON BOND]
MICHIGAN CONSOLIDATED GAS COMPANY
FIRST MORTGAGE BOND

$................. No.................

MICHIGAN CONSOLIDATED GAS COMPANY (hereinafter called the "Company"), a corporation of the State of Michigan, for value received, hereby promises to pay to bearer, or, if this bond be registered as to principal, to the registered owner hereof, on ............, at ............ in ............ the sum of ............. Dollars ($.............) in lawful money of the United States of America, and to pay interest thereon from ............... at the rate of ...... per cent (......%) per annum, in like lawful money, payable ........... at ........... in ........... on the ........... day of ......... and on the . . ....... day of ......... in each year until the Company's obligation with respect to the payment of such principal sum shall be discharged as provided in the indentures hereinafter mentioned, but only, in the case of interest due on or before the maturity date, upon presentation and surrender of the interest coupons therefor hereto attached as they severally mature.

1944, duly executed by the Company to City Bank Farmers Trust Company, (Citibank, N.A., as successor trustee, herein called the "Trustee") and Ralph E. Morton (Robert T. Kirchner, as successor individual trustee, herein called the "Individual Trustee"), Trustees, to which Indenture reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security, the terms and conditions upon which the bonds are, and are to be, secured, and the rights of the bearers or registered owners of the bonds and of the Trustees in respect of such security. This bond is one of a series entitled ...................................................

With the consent of the Company and to the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and/or the rights of the holders of the bonds and/or coupons and/or the terms and provisions of the Indenture may be modified or altered, with certain exceptions as provided in the Indenture, by affirmative vote of the holders of at least sixty per cent (60%) in principal amount of the bonds then outstanding under the Indenture and, if the rights of the holders of one or more, but less than all, series of bonds then outstanding are to be adversely affected, then by affirmative vote of the holders of at least sixty per cent (60%) in principal amount of those bonds then outstanding so to be adversely affected.

This bond is transferable by delivery unless registered as to principal on the books of the Company at the office or agency of the Company in ............., such registration to be noted hereon. After such registration, no transfer shall be valid unless made upon said books by the registered owner in person, or by an attorney duly authorized in writing, and similarly noted hereon; but this bond may be discharged from registration by being in like manner transferred to bearer, and thereupon transferability by delivery shall be restored, after which this bond may again from time to time be registered or made transferable to bearer as before. Such registration, however, shall not affect the negotiability of the coupons for interest hereto attached, which shall always be payable to bearer and transferable by mere delivery.

No recourse shall be had for the payment of the principal of, or the interest on, this bond, or for any claim based hereon or otherwise in respect hereof or

of said Indenture, against any incorporator, any subscriber, or against any stockholder, director or officer, past, present or future, of the Company, as such, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, subscribers, stockholders, directors or officers being waived and released by every bearer or registered owner hereof by the acceptance of this bond and as part of the consideration for the issue hereof, and being likewise waived and released by the terms of said Indenture.

Neither this bond nor any of the annexed interest coupons shall be valid or become obligatory for any purpose unless and until the certificate hereon shall have been executed by the Trustee or its successor in trust under said Indenture.

IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused this bond to be signed in its name by its Chairman, Chief Executive Officer, President, Vice Chairman or one of its Vice Presidents, by signature or facsimile thereof, and its corporate seal to be impressed or imprinted hereon and attested by its Secretary or an Assistant Secretary, by signature or facsimile thereof, and coupons for said interest bearing the facsimile signature of its Treasurer or an Assistant Treasurer or its Secretary or an Assistant Secretary to be hereunto attached.

DATED:

MICHIGAN CONSOLIDATED GAS COMPANY

BY ........................................

ATTEST:

.......................................

[GENERAL FORM OF INTEREST COUPON]

No ................ $ ................

On the ........ day of ...................... unless the bond hereinafter mentioned shall have previously become due and payable, upon surrender of this

coupon, MICHIGAN CONSOLIDATED GAS COMPANY will pay to bearer, at .......... in
.............................. Dollars ($...........) in lawful money of the
United States of America, being .................... months' interest then due
on its First Mortgage Bond, ............ , No ..............

                                            ....................................

[GENERAL FORM OF REGISTERED BOND WITHOUT COUPONS]

MICHIGAN CONSOLIDATED GAS COMPANY

FIRST MORTGAGE BOND

$ ................ No ................

MICHIGAN CONSOLIDATED GAS COMPANY (hereinafter called the "Company"), a corporation of the State of Michigan, for value received, hereby promises to pay to ............. or registered assigns, on ............. , at .............................. in ............................... the sum of ............ .......... Dollars ($ ...................... ) in lawful money of the United States of America, and to pay interest thereon from , if the date of this bond is prior to or, if the date of this bond is on or after , from the or next preceding the date of this bond (unless the date hereof is an interest payment date to which interest has been paid, in which case from the date hereof), at the rate of .... per cent (....%) per annum, in like lawful money, payable ............. at ............ in ............ on the ........... day of ............ and on the ........... day of ................ in each year until the Company's obligation with respect to the payment of such principal sum shall be discharged as provided in the indentures hereinafter mentioned.

[The following provision may be included here at the Company's option:
provided, however, if the date hereof is after any record date, as hereinafter provided, with respect to any interest payment date and prior to such interest payment date, then interest shall be payable only from such interest payment

date unless the Company shall default in the payment of the interest due on such interest payment date, in which case interest shall be payable from the next preceding interest payment date to which interest has been paid, or, if no such interest has been paid on the bonds, from .........

The interest so payable on any interest payment date will, subject to certain exceptions provided in the Indenture hereinafter referred to, be paid to the person in whose name this bond is registered at the close of business (whether or not a business day) on the ........ or ........ (herein called "record dates"), as the case may be, next preceding such interest payment date.] At the option of the Company, interest may be payable by check mailed on or prior to such interest payment date to the address of the person entitled thereto as such address shall appear on the register of the Company.

[The provisions hereinafter indicated for the reverse of the bond may instead be inserted here. Otherwise, the following statement shall be included here if provisions are continued on the reverse of the bond: ADDITIONAL PROVISIONS OF THIS BOND ARE SET FORTH ON THE REVERSE HEREOF AND SUCH PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.]

This bond shall not be valid or become obligatory for any purpose, unless and until the certificate herein shall have been executed by the Trustee or its successor in trust under said Indenture.

DATED:

MICHIGAN CONSOLIDATED GAS COMPANY

By ........................................

Attest:

......................................

[GENERAL FORM OF REGISTERED BOND WITHOUT COUPONS]
(REVERSE)

MICHIGAN CONSOLIDATED GAS COMPANY

This bond is one, of the series hereinafter specified, of the bonds of the Company (herein called the "bonds") known as its "First Mortgage Bonds," issued and to be issued in one or more series under, and all equally and ratably secured by, an Indenture of Mortgage and Deed of Trust (herein, together with any indenture supplemental thereto, including the supplemental indenture dated as of , called the "Indenture") dated as of March 1, 1944, duly executed by the Company to City Bank Farmers Trust Company (CITIBANK, N.A., as successor trustee, herein called the "Trustee") and Ralph E. Morton (Robert T. Kirchner as successor individual trustee, herein called the "Individual Trustee"), Trustees, to which Indenture reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security, the terms and conditions upon which the bonds are, and are to be, secured, and the rights of the bearers or registered owners of the bonds and of the Trustees in respect of such security. This bond is one of a series entitled .............................................

This bond is transferable by the registered owner hereof in person, or by an attorney duly authorized in writing, at the office or agency of the Company in ................., upon surrender and cancellation of this bond, and upon any such transfer a new registered bond, without coupons, of the same series

and maturity for the same aggregate principal amount will be issued to the transferee in exchange herefor.

No recourse shall be had for the payment of the principal of, or the interest on, this bond, or for any claim based hereon or otherwise in respect hereof or of said Indenture, against any incorporator, any subscriber, or against any stockholder, director or officer, past, present or future, of the Company, as such, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, subscribers, stockholders, directors or officers being waived and released by every owner hereof by the acceptance of this bond and as part of the consideration for the issue hereof, and being likewise waived and released by the terms of said Indenture.

[FORM OF TRUSTEE'S CERTIFICATE ON ALL BONDS]

This bond is one of the bonds of the series designated therein, described in the within-mentioned Indenture.

CITIBANK, N.A., as Trustee,

By ......................................

Authorized Officer

AND WHEREAS, all acts and things required by law and by the articles of incorporation and the by-laws of the Company necessary to make this Indenture, when duly executed and delivered, a valid and binding mortgage and deed of trust for the security of all bonds duly issued hereunder have been done and performed; and the execution and delivery of this Indenture have been in all respects duly authorized;

NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and interest on all bonds at any time outstanding under this Indenture according to their tenor, purport and effect, and the performance and observance of all the covenants and conditions therein and herein contained, and to declare the terms and conditions upon and subject to which said bonds are secured and to be secured, and in consideration of the

premises and of the mutual covenants herein contained and of the purchase and acceptance of said bonds by the holders thereof, and of the sum of One Dollar, lawful money of the United States of America, to the Company duly paid by the Trustees at or before the ensealing and delivery hereof, and for other valuable considerations, the receipt whereof is hereby acknowledged, the Company has executed and delivered this Indenture and has granted, bargained, sold, aliened, granted a security interest in, remised, released, conveyed, assigned, transferred, mortgaged, pledged, set over and confirmed, and by these presents does grant, bargain, sell, alien, grant a security interest in, remise, release, convey, assign, transfer, mortgage, pledge, set over and confirm unto Citibank, N.A. (successor to City Bank Farmers Trust Company) and Robert T. Kirchner (successor to Ralph E. Morton), as Trustees, and to their successors in trust and to their assigns, forever, all of the property of the Company, real and personal, of every kind and character described below (other than the excepted property hereinafter referred to and defined) including the following:

FIRST.

All the real estate of the Company located in the State of Michigan described in the Indenture of Mortgage dated as of March 1, 1944 as it was recorded in 1944 and the supplemental indentures thereto all as recorded prior to the effective date of this amendment and restatement except for any such real estate that has been released from the lien hereof in any deed executed by the Trustees pursuant to the provisions of the Indenture as amended and supplemented.

SECOND.

All pipelines of the Company located in the State of Michigan, including all transmission lines and lateral lines, together with all easements and rights-of-way for constructing, maintaining, replacing and operating the same, and all pipes, structures, compressors, valves, regulators, services, meters, machinery, fixtures, equipment and apparatus comprising or appurtenant to said transmission lines and lateral lines, including those described in the Indenture of Mortgage dated as of March 1, 1944 as it was recorded in 1944 and the supplemental indentures thereto all as recorded prior to the effective date of this amendment and restatement and except for any such pipeline that has been released from the lien hereof in any deed executed by the Trustees pursuant to the provisions of the Indenture as amended and supplemented.

THIRD.

All gas manufacturing plants and gas transmission and distribution systems of the Company located in the State of Michigan, including all and singular the gas works, stations, substations, offices, repair shops, buildings, structures, holders, retorts, purifiers, scrubbers, tanks, boilers, machinery, engines, pumps, compressors, pipes, mains, conduits, valves, regulators, services, meters, fixtures, tools, equipment, apparatus and other property comprising or appurtenant to said gas manufacturing plants and gas transmission and distribution systems.

FOURTH.

All franchises, all rights to construct, maintain and operate systems for the distribution and transmission of gas in the State of Michigan, and all easements, rights-of-way, permits, consents, privileges and licenses of the Company related thereto.

FIFTH.

Also all other property of the Company, real and personal, of every kind and character used or useful for or to be used in the business of manufacturing, producing, generating, purchasing, transmitting, distributing or supplying gas, electricity, steam or water for any purpose and wheresoever situated in the States of Michigan, Ohio or Indiana, except property of the character hereinafter referred to and defined as excepted property.

SIXTH.

Also all gas utility property, real and personal, of every kind and character described above, and wheresoever situated in the State of Michigan (except property of the character hereinafter referred to and defined as excepted property), which may be hereafter acquired or possessed by the Company, subject, however, to the provisions of Article XIII.

SEVENTH.

And also all property which at any time after March 1, 1987, by delivery or by an indenture supplemental hereto, may be expressly conveyed, mortgaged or pledged to the Trustees hereunder, or either of them, by the Company or by a successor corporation, or by anyone on the Company's behalf and with its written consent as and for additional security hereunder; the Trustees and each of them being hereby authorized at any and all times to accept and

receive any such conveyance, mortgage, pledge or delivery and to hold and apply any such property upon and subject to the terms and provisions hereof or of any such supplemental indenture.

EIGHTH.

Together with all and singular the tenements, hereditaments and appurtenances belonging or in anyway appertaining to the property hereby granted or intended so to be; and the reversion and reversions, remainder and remainders, incomes, rents, issues, proceeds and profits thereof; and all of the estate, right, title, interest and claim whatsoever of the Company in and to the same and every part and parcel thereof, excepting always property hereinafter excepted and excluded from the lien hereof.

EXCEPTED PROPERTY.

Expressly excepting and excluding, however, from this Indenture and from the lien and operation hereof all the following-described property whether now owned or hereafter acquired by the Company:

A. All shares of stock and certificates or evidences of interest therein, all bonds, notes and other evidences of indebtedness or certificates of interest therein, all other securities, all bills, notes and accounts receivable, cash on hand or in banks, judgments, demands and general intangibles, choses in action and all contracts and operating agreements, now owned or hereafter acquired or possessed by the Company and which, or the proceeds of which, are not hereby or hereafter specifically mortgaged and pledged hereunder or required so to be.

B. All property and franchises of any other corporation of whatever character, securities whereof, or obligations secured by lien upon the properties and franchises whereof, may be now owned or hereafter acquired or possessed by the Company, notwithstanding the fact that the Company may own or hereafter acquire all or substantially all of the securities issued by or secured by lien upon property of any such corporation or that any such corporation may be incorporated or organized at the instance of, or for the account of, the Company.

C. All goods, wares, merchandise, equipment, materials and supplies manufactured or otherwise acquired for the purpose of resale or lease or for consumption in the ordinary course of business or in the operation of any properties of the Company, or held in advance of use thereof for fixed capital purposes, and all leases.

D. All gas (including but not limited to volumes of gas necessary to maintain minimum pressures required for the operation of storage fields, sometimes referred to as "base gas"), by-products of gas, electricity, steam, water and oil, and any natural gas lands, wells, royalties, or rights or interests therein, or natural gas gathering lines or other works or property used in the production of natural gas.

E. All automobiles, trucks, and other transportation equipment.

F. All property of the Company in Earth's orbit or otherwise in space.

G. All oil rights under gas and/or oil leases.

H. All the interest of the Company in Lots 5, 6, 7, 8, 9, 10, 11, 12, and a portion of Lots 4 and 13, Fraser's Section of part of the Chene Farm, Detroit, Wayne County, Michigan, record title to said premises being in Union Trust Company, a Michigan corporation, by virtue of a deed recorded in the office of the Register of Deeds for Wayne County in Liber 1591 of Deeds, page 6.

All securities, properties and franchises so excepted and excluded, or during the time and to the extent so excepted and excluded, are elsewhere in this Indenture sometimes referred to collectively as "excepted property". If, upon the happening and continuance of an event of default as defined in Section 9.01 hereof, the Trustees or either of them or any receiver appointed hereunder shall enter upon and take possession of the mortgaged property, the Trustees or such receiver may, to the extent permitted by law, at the same time likewise take possession of any and all of the excepted property described herein then on hand, and not then subject to a lien or encumbrance, which is used or useful in connection with the business of the Company, and use and administer the same, to the extent permitted by law, to the same extent as if such property were then made part of the mortgaged property, unless and until such event of default shall be remedied or waived and possession of the mortgaged property restored to the Company, its successors or assigns.

The Company, however, expressly reserves the power at any time and from time to time, by indenture supplemental hereto, to subject to the lien and operation of the indenture any part or all of the securities, property and franchises so excepted and excluded from the lien and operation hereto, upon such terms and conditions and subject to such restrictions, limitations and reservations as it may determine.

TO HAVE AND TO HOLD the trust estate unto the Trustees, and their successors and assigns, to and for the proper use and benefit of the Trustees, and their successors and assigns forever:

SUBJECT, HOWEVER, to the exceptions and reservations and matters hereinabove recited; to existing leases and railroad trackage agreements; to alleys, streets and highways that may run across or encroach upon said lands; to easements, rights-of-way, reservations and restrictions existing by operation of law or otherwise, over, under, upon or against the trust estate; to mortgages, encumbrances or other liens existing at the date of acquisition on properties and franchises acquired after the date of delivery of this Indenture; to purchase money mortgages upon properties and franchises, acquired after the date of delivery of this Indenture, created by the Company at the time of acquisition of such properties and franchises; and to permissible encumbrances, as the term "permissible encumbrances" is defined in Article I hereof.

IN TRUST NEVERTHELESS, for the equal and proportionate use, benefit and security of all present and future holders of the bonds and coupons issued and to be issued under this Indenture, and for the enforcement of the payment of said bonds and coupons when payable according to their tenor, purport and effect, and to secure the performance of and compliance with the covenants and conditions of said bonds and coupons and of this Indenture, without preference, priority or distinction as to lien or otherwise, except as otherwise hereinafter provided, of any one bond or coupon over any other bond or coupon, or of the bonds or coupons of any particular series over the bonds or coupons of any other series, by reason of priority in the time of issue, sale or negotiation thereof or by reason of the purpose of issue or otherwise howsoever, so that, except as aforesaid, each and every bond issued and to be issued hereunder shall have the same right, lien and privilege under and by virtue of this Indenture, and so that, except as aforesaid, the principal of and interest on all bonds shall be equally and proportionately secured hereby, as if all such bonds at any time outstanding had been duly issued, sold and negotiated simultaneously with the delivery of this Indenture, and for the same consideration; it being intended that the lien and security of this Indenture as to all bonds issued and to be issued hereunder shall take effect from the day of the delivery hereof, without regard to the time of the actual issue, sale or disposition of said bonds, and as though upon said date all of said bonds had been sold and delivered to and were in the hands of bona fide purchasers thereof for value;

PROVIDED, HOWEVER, and these presents are upon the condition that if the Company, its successors or assigns, shall pay or cause to be paid unto the holders of all bonds outstanding hereunder the principal and interest (and premium, if any) to become due in respect thereof at the times and in the manner stipulated therein and herein, and shall keep, perform and observe all and singular the covenants and promises in the bonds and coupons and in this Indenture expressed as to be kept, performed and observed by or on the part of the Company according to the true intent and meaning of this Indenture, then this Indenture and the estate and rights hereby granted shall cease, determine and be void, otherwise to remain in full force and effect.

And it is hereby covenanted, declared and agreed by and between the parties hereto that all of said bonds, with the coupons, if any, for interest thereon, are to be executed, authenticated, issued and held, and that the trust estate is to be held by the Trustees, upon and subject to the further covenants, conditions, uses and trusts hereinafter set forth, viz.:

ARTICLE I.

DEFINITIONS.

For all purposes of this Indenture and of all indentures supplemental hereto now or hereafter entered into in accordance with the provisions hereof, the definitions contained in and the methods of computation. prescribed by this Article I shall be applied, unless the context otherwise requires or unless any such supplemental indenture shall otherwise provide. Unless otherwise defined in this Indenture, all terms used in those provisions of this Indenture which are required to be inserted in an indenture to be qualified under the Trust Indenture ACT of 1939 shall have the meaning, if any, assigned to such terms in said Act, unless the context otherwise requires.

The accounting terms used in this Indenture shall be construed in accordance with generally accepted accounting principles and practices in use at the time by companies operating like properties or, at the option of the Company, from time to time, in accordance with generally accepted accounting principles and practices in use at the effective date of this Amendment and Restatement of the Indenture as hereinafter defined.

The acceptance by the Trustee of any document, the signer of which is required by some provision hereof to be approved by the Trustee, shall be

sufficient evidence of its approval of the signer within the meaning of this Indenture.

Every request or application by the Company for action by the Trustee under any of the provisions of this Indenture shall be accompanied by an officers' certificate and the opinion of counsel to the extent provided for in Section 17.07 hereof.

Accountant:

The term, "accountant," shall mean an individual or a co-partnership or a corporation engaged in the accounting profession, whether or not employed by or in any way affiliated with the Company, or an individual employed by the Company in the capacity of accountant.

Accountant's Certificate:

The term, "accountant's certificate," shall mean a certificate signed by the Chairman, Chief Executive Officer, President, Vice Chairman or a Vice President of the Company or by any other officer selected by the Board of Directors and by an accountant acceptable to the Trustee.

Acquired Plant or System:

The term, "acquired plant or system," shall mean any property purchased or acquired by the Company after December 31, 1943, which within six months prior to the date of purchase or acquisition thereof by the Company has been used or operated, by others other than the Company, in a business similar to that in which it had been or is to be used or operated by the Company.

Additional Bonds:

The term, "additional bonds," shall mean bonds authorized hereunder, of the initial series known as First Mortgage Bonds, 3-1/2 % Series due 1969, or of any other series, hereafter duly authenticated and delivered pursuant to the provisions of Sections 3.03, 3.04, 3.05 and/or 3.06 hereof.

Affiliate:

The term, "affiliate," when used with reference to the Company, shall mean any person or corporation controlling, controlled by, or under direct or indirect common control with, the Company, and when used with reference to an

obligor under this Indenture or upon the bonds other than the Company, shall mean any person or corporation controlling, controlled by, or under direct or indirect common control with, such obligor.

Appraiser:

The term, "appraiser," shall mean an individual or a co-partnership or a corporation engaged in the business of appraising property or competent to determine the value of the particular property in question, whether or not employed by or in any way affiliated with the Company.

Appraiser's Certificate:

The term, "appraiser's certificate," shall mean a certificate signed by an appraiser appointed by the Chairman, Chief Executive Officer, President, Vice Chairman or a Vice President of the Company or any other officer selected by the Board of Directors and acceptable to the Trustee.

Authorized Detroit Newspaper:

The term, "authorized detroit newspaper," shall mean any newspaper published on each business day, whether or not published on Saturdays, Sundays or holidays, printed in the English language, and of general circulation in the City of Detroit, Michigan. In the event that successive weekly publications in an authorized Detroit newspaper are required hereunder they may be made' (unless otherwise expressly provided herein) on the same or different days of the week and in the same or in different authorized Detroit newspapers. In case, by reason of the suspension of publication of any authorized Detroit newspaper, or by reason of any other cause, it shall be impractical without extraordinary expense to make publication of any notice in an authorized Detroit newspaper as required by this Indenture, then such method of publication or notification as shall be made with the approval of the Trustee shall be deemed the equivalent of the required publication of such notice in an authorized Detroit newspaper.

Authorized New York Newspaper:

The term, "authorized New York newspaper," shall mean any newspaper published on each business day, whether or not published on Saturdays, Sun-days or holidays, printed in the English language, and of general circulation in the Borough of Manhattan, The City of New York, New York. In the event that successive weekly publications in an authorized New York newspaper are

required hereunder they may be made (unless otherwise expressly provided herein) on the same or different days of the week and in the same or in different authorized New York newspapers. In case, by reason of the suspension of publication of any authorized New York newspaper, or by reason of any other cause, it shall be impractical without extraordinary expense to make publication of any notice in an authorized New York newspaper as required by this Indenture, then such method of publication or notification as shall be made with the approval of the Trustee SHALL be deemed the equivalent of the required publication of such notice in an authorized New York newspaper.

Board of Directors-Board:

The term, "Board of Directors," or "Board" shall mean the Board of Directors of the Company or any authorized committee of the Board of Directors.

Bonded:

The term, "bonded," when used with reference to property, PROPERTY additions, bonds or prior lien bonds, shall mean any such property, property additions, bonds or prior lien bonds made by the Company the basis for the authentication and delivery of bonds or for the withdrawal of cash held by the Trustee or by the trustee or other holder of a prior lien or for the reduction of the amount of cash to be deposited with the Trustee or for the release of property from the lien hereof, under any provision of this Indenture (provided that such provision does not expressly otherwise specify). The term, "bonded," shall also include bonds and prior lien bonds purchased or retired with money or other property constituting a part of the trust estate including, but not limited to, the proceeds of insurance on property theretofore bonded. The term, "bonded," shall also include any property, property additions, bonds or prior lien bonds, if and to the extent that the terms of any indenture supplemental hereto, dated after March 1, 1987, shall so require.

All of the properties owned by the Company on December 31, 1943, and hereby mortgaged or intended so to be, shall, for all purposes of this Indenture, be deemed to have been bonded at the date of delivery of this Indenture.

To the extent that any property additions, bonds or prior lien bonds, certified to the TRUSTEE as the basis for any of the foregoing purposes, shall be in excess of the amount of property additions, bonds or prior lien bonds required for the particular purpose, such excess property additions, bonds or prior lien

bonds shall not be deemed to be bonded, or shall be only partially bonded to the extent so used. For the purpose of determining which property additions certified to the Trustee represent any such excess, such excess shall be deemed to be represented by the property additions most recently purchased, constructed or otherwise acquired and included in the certificate.

The term, "theretofore bonded," when used in any provision of this Indenture with reference to property, property additions, bonds or prior lien bonds, shall mean any such property, property additions, bonds, or prior lien bonds - bonded prior to and remaining bonded at the particular time under any provision of this Indenture, or bonded contemporaneously under any provision of this Indenture.

Bondholders:

The term, "bondholders," or, "holders of the bonds," or, "holders," shall mean the bearers of any coupon bonds outstanding hereunder, the ownership of which is not at the time registered as to principal; the registered owners of any coupon bonds outstanding hereunder which are at the time duly registered as to principal; and the registered owners of any registered bonds without coupons outstanding hereunder.

Any reference to a particular percentage or proportion of the bondholders, or to a particular percentage or proportion of the holders of bonds of a particular series, shall mean the holders at the particular time of the specified percentage or proportion in aggregate principal amount of all bonds then outstanding under this Indenture, or of all bonds of the particular series then outstanding under this Indenture, as the case may be, exclusive of bonds or of bonds of the particular series, as the case may be, owned by the Company, whether or not theretofore issued, or by any obligor upon the bonds, or by any affiliate of the Company or of such obligor, and whether held in the treasury of the Company or of such obligor or affiliate or pledged to secure any indebtedness; provided, however, that where such reference is made in connection with the protection of the Trustees in acting upon the direction or consent of a specified proportion of bondholders, such bonds shall be excluded only if known to the Trustees to be so owned; and provided further, that bonds . so pledged may be regarded as outstanding for the purposes of this paragraph if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such bonds and that the pledgee is not an obligor upon the bonds or an affiliate of the Company or of such obligor.

Bonds:

The term, "bond," or, "bonds," shall mean any bond or all the bonds, as the case may be, authenticated and delivered under this Indenture.

The term, "outstanding under this Indenture," "outstanding under the Indenture," or, "outstanding hereunder," when used with reference to bonds, shall mean all bonds authenticated and delivered under this Indenture, except

A. bonds cancelled prior to the particular time;

B. bonds held by the Trustee for the purpose of any sinking fund or analogous fund for the retirement of bonds for which provision may be made in any indenture supplemental hereto, unless otherwise provided in such supplemental indenture;

C. "redeemed bonds" as hereinafter defined; and

D. bonds in lieu of and in substitution for which other bonds shall have been authenticated and delivered pursuant to the terms of Section 2.08 hereof.

Certified Resolution:

The term, "certified resolution," shall mean a copy of a resolution certified by the Secretary or an Assistant Secretary Of the Company, under its corporate seal, to have been duly adopted by the Board.

Company:

The term, "Company," shall mean the party of the first part hereto, MICHIGAN CONSOLIDATED GAS COMPANY, and, subject to the provisions of Article XIII hereof, shall include its successors and assigns.

Counsel:

The term,"counsel,"shall mean counsel (who may be of counsel for the Company) appointed by the Chairman, Chief Executive Officer, President, Vice Chairman or a Vice President of the company or any other officer selected by the Board of Directors and acceptable to the Trustee.

Coupons:

The term, "coupon," or "coupons," shall mean any interest coupon or all the interest coupons, as the case may be, appertaining to the bonds.

Engineer:

The term, "engineer," shall mean an individual or a co-partnership or a corporation engaged in the engineering business, whether or not employed by or in any way affiliated with the Company, or an individual employed by the Company in the capacity of engineer.

Engineer's Certificate:

The term, "engineer's certificate," shall mean a certificate signed by the Chairman, Chief Executive Officer, President, Vice Chairman or a Vice President of the Company and by an engineer acceptable to the Trustee.

Event of Default:

The term, "event of default," shall mean any event of default specified in Section 9.01 of this Indenture, continued for the period of time, if any, therein designated.

Indenture:

The term, "Indenture," shall mean this instrument and all indentures supplemental hereto. All references to "herein" shall mean in this Indenture or in any indenture supplemental hereto.

Independent Accountant:

The term, "independent accountant," shall mean an individual, co-partnership or corporation, engaged in the accounting profession, who or which is in fact independent and, in the case of an individual, who is not a director, officer or employee of the Company or of an affiliate of the Company or of any other obligor under this Indenture or upon any of the bonds, and, in the case of a co-partnership or corporation, which is not an affiliate of the Company or of any other obligor under this Indenture or upon any of the bonds and which does not have a partner, director or officer who is a director, officer or employee of the Company or of any affiliate of the Company or of any such obligor, whether or not such individual, co-partnership or corporation is regularly retained by the Company or by any affiliate of the Company or by such other obligor.

Independent Accountant's Certificate:

The term, "independent accountant's certificate," shall mean a certificate or opinion signed by an independent accountant appointed by the Chairman,

Chief Executive Officer, President, Vice Chairman or a Vice President of the Company or any other officer selected by the Board of Directors and approved by the Trustee in the exercise of reasonable care

Independent Appraiser:

The term, "independent appraiser," shall mean an individual, co-partnership or corporation, engaged in the business of appraising property or otherwise competent to determine the value of the particular property in question, who or which is in fact independent and, in the case of an individual, who is not a director, officer or employee of the Company or of an affiliate of the Company or of any other obligor under this Indenture or upon any of the bonds, and, in the case of a co-partnership or corporation, which is not an affiliate of the Company or of any other obliger under this Indenture or upon any of the bonds and which does not have a partner, director or officer who is a director, officer or employee of the Company or of any affiliate of the Company or of any such obligor, whether or not such individual, co-partnership or corporation is regularly retained by the Company or by any affiliate of the Company or by such other obligor.

Independent Appraiser's Certificate:

The term, "independent appraiser's certificate," shall mean a certificate signed by an independent appraiser appointed by the Chairman, Chief Executive Officer, President, Vice Chairman or a Vice President of the Company or any other officer selected by the Board of Directors and approved by the Trustee in the exercise of reasonable care.

Independent Engineer:

The term, "independent engineer," shall mean an individual, co-partnership or corporation, engaged in the engineering business, who or which is in fact independent and, in the case of an individual, who is not a director, officer or employee of the Company or of an affiliate of the Company or of any other obligor under this Indenture or upon any of the bonds, and, in the case of a co-partnership or corporation, which is not an affiliate of the Company or of any other obliger under this Indenture or upon any of the bonds and which does not have a partner, director or officer who is a director, officer or employee of the Company or of any affiliate of the Company or of any such obligor, whether or not such individual, co-partnership or corporation is regularly retained by the Company or by an affiliate of the Company or by such other obligor.

Independent Engineer's Certificate:

The term, "independent engineer's certificate," shall mean a certificate signed by an independent engineer appointed by the Chairman, Chief Executive Officer, President, Vice Chairman or a Vice President of the Company or any other officer selected by the Board of Directors and approved by the Trustee in the exercise of reasonable care.

Lien of this Indenture:

The terms, "lien hereof," and, "lien of this Indenture," shall mean the lien created by these presents (including the after-acquired property clauses hereof) and the lien created by any subsequent conveyance to the Trustees hereunder or otherwise (whether made by the Company or any other corporation or any individual or co-partnership) effectively constituting any property a part of the security held by the Trustees for the benefit of all bonds outstanding hereunder.

Mortgaged Property--Trust Estate:

The terms, "mortgaged property," and, "trust estate," shall mean as of any particular time the property which at said time is subject or intended to be subject to the lien of this Indenture, whether such lien be created by these presents (including the after-acquired property clauses hereof) or by subsequent conveyance or delivery to or pledge with the Trustees hereunder or otherwise.

Net Property Additions:

The term, "net property additions," as of any particular date shall mean the excess of the cost or fair value (whichever is less) of all property additions of the Company, certified to the Trustee pursuant to any of the provisions of this Indenture as of such date, over the original cost or over the cost or fair value (whichever is less), as the case may be (computed in accordance with the definition of property retirements), of all property retirements of the Company certified to the Trustee as of such date pursuant to any provision of this Indenture (provided that such provision does not expressly otherwise specify).

In the computation of "net property additions not theretofore bonded" for any purpose of this Indenture, only property additions not theretofore bonded shall be included. Property additions which shall have been retired or which shall have been released from the lien of this Indenture without in either event

having become bonded, shall be excluded in determining the amount of property additions and property retirements.

Officers' Certificate:

The term "officers' certificate," shall mean a certificate signed by the Chairman, Chief Executive Officer, President, Vice Chairman or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the Company.

Order of the Company--Request of the Company:

The terms, "order of the Company," and, "request of the Company," shall mean, unless the context otherwise indicates, an instrument in writing signed by the Chairman, Chief Executive Officer, President, Vice Chairman or a Vice President of the Company, or by any other officer selected by the Board of Directors.

Original Cost:

The term, "original cost," when used with reference to property, shah mean the cost of such property to the person first devoting it to public service, or, in the case of property not devoted to public service, the cost thereof to the Company.

Permissible Encumbrances:

The term, "permissible encumbrances," shall mean at any particular time
A.taxes, assessments or governmental charges not delinquent, B. taxes, assessments or governmental charges, already due, but the validity of which is being contested at the time by the Company in good faith, C. liens created by others than the Company on property with respect to which the Company owns easements, leases or rights-of-way for gas, steam or water mains, pipes, pipe lines or equipment or for electric transmission or distribution lines, or leases or other rights for natural gas production purposes, D. undetermined liens or charges incidental to construction, E. liens 1. of any judgments in an aggregate amount of not in excess of one per cent (1%) of the aggregate principal amount of the bonds outstanding hereunder at the time of the creation of such lien in personal injury, workers' compensation or death cases or for damages to property, or 2. in respect of judgments or awards with respect to which the Company shall in good faith concurrently be prosecuting an appeal or proceedings for review, or 3. of any judgment in respect of which moneys in the amount of

the judgment have been deposited with the Trustee to be withdrawn only as provided in Section 8.01 hereof, F. easements, rights-of-way, exceptions, reservations or restrictions, ,and agreements for the joint or common use of property, which do not materially impair the use of the affected property in the operation of the business of the Company, G. the right reserved to, or vested in, any municipality or public authority by the terms of any franchise, grant, license or permit, or by any provision of law, to terminate such franchise, grant, license or permit or to purchase or appropriate or recapture or to designate a purchaser of any of the mortgaged property, or to demand and collect from the Company any tax or other compensation for the use of streets, alleys or other public places, H. rights reserved to, or vested in, any municipality or public authority to use, control, remove or regulate any property of the Company, I. zoning laws and ordinances, J. possible adverse rights or interests and inconsequential defects or irregularities in title which, in the opinion of counsel, may be properly disregarded, K. any liens securing indebtedness, neither assumed nor guaranteed by the Company nor on which it customarily pays interest, existing upon real estate or rights in or relating to real estate acquired by the Company for right-of-way, lease or similar purposes, L. rights reserved to or vested in others to take or receive any part of the gas, power, oil or other minerals or timber generated, developed, manufactured or produced by, or grown on, or acquired with, any property of the Company, and M. any controls, liens, restrictions, regulations, easements, exceptions or reservations of any governmental authority applying to the property or facilities of the Company.

Prior Lien:

The term, "prior lien," shall mean a mortgage or other lien prior to the lien of this Indenture (excepting the liens of permissible encumbrances) existing at any particular time upon any property additions then or theretofore bonded under any provision of this Indenture.

Prior Lien Bonds:

The term, "prior lien bonds, " shall mean bonds, obligations or indebtedness secured by prior liens.

The term, "outstanding," when used with reference to prior lien bonds, shall mean as of any particular time all prior lien bonds theretofore authenticated and delivered by the trustee of the mortgage or other lien securing the same

and/or, if there be no such trustee, all prior lien bonds theretofore issued and delivered by the maker of such mortgage or other lien, except:

A. prior lien bonds theretofore cancelled;

B. prior lien bonds held in pledge hereunder;

C. prior lien bonds held in pledge by the trustee or other holder of the mortgage or other lien securing such prior lien bonds or other prior lien bonds, or for the purpose of any sinking fund or analogous fund for the retirement of bonds, for which provision may have been made in the instrument evidencing such mortgage or other lien;

D. redeemed prior lien bonds, as hereinafter defined, and prior lien bonds for the purchase of which moneys in the necessary amount shall have been irrevocably deposited with the Trustee hereunder or with the trustee or other holder of the mortgage or other lien securing such prior lien bonds or other prior lien bonds (whether upon or prior to maturity or upon or prior to the redemption date of such prior lien bonds); and

E. lost, stolen, mutilated or destroyed prior lien bonds in lieu of, and in substitution for, which other prior lien bonds shall have been issued.

Property Additions:

The term, "property additions," shall mean any new or additional property, real or personal (including acquired plants or systems and separate and distinct units, plants, systems and properties) purchased, constructed or otherwise acquired by the Company and permanent improvements, extensions or additions (including in these terms equipment and appliances) to or about the plants or properties of the Company, and in every case subject to the lien hereof, in the opinion of counsel for the Company, and located in the United States of America or the Dominion of Canada and purchased, constructed or otherwise acquired by the Company after December 31, 1943 (or, in the case of materials and supplies, held on December 3 1, 1943, in advance of use thereof and installed after that date), and properly chargeable to fixed capital accounts and so charged after that date,, and in every case used or useful for or to be used in the business of manufacturing, producing, exploring for and developing, generating, purchasing, transmitting, transporting, managing the use-of, distributing or supplying energy or fuel in any form, including without limitation, gas or electricity for any purpose or of generating, manufacturing, producing, transmitting, transporting, distributing or supplying water for drinking, power, heat or other purposes or steam or hot water for power, heat or other purposes.

"Property additions," as so defined, without limitation of the general import of such definition, shall include:

A. Property acquired by the Company as the result of any consolidation or merger to which the Company may be a party;

B. Permanent improvements, extensions or additions to or about the properties of the Company in the process of construction or partially completed, but only to the extent of construction made subsequent to December 31, 1943;

C. Property purchased, constructed or otherwise acquired by the Company to renew or replace, or in substitution for, other property including old, worn out, obsolete, discontinued or abandoned property, or property which has been lost through enforcement of liens on property with respect to which the Company owns easements, rights-of-way or leases for gas, steam or water mains, pipes or pipe lines or for electric transmission or distribution lines;

D. Movable equipment, whether or not installed on property owned by others;

E. Easements and rights-of-way for gas, steam or water mains, pipes or pipe lines or for electric transmission or distribution lines, and any rights, permits or licenses to use or appropriate water or to overflow the land of others by the erection of dams or otherwise; and permanent improvements, extensions or additions, including mains, pipes, towers, pole, wires, vaults, conduits and equipment for transmission, distribution or pipe line purposes, to or upon any land covered by such easements or rights-of-way or such rights, permits or licenses or by leases;

F. Permanent improvements, extensions or additions, including mains, pipes, towers, poles, wires, vaults, conduits and equipment for transmission, distribution or pipe line purposes, located or constructed on, over or under public highways, streets, alleys, bridges or other public property (including in the cost thereof any cost of paving or repaving in connection therewith);provided that the Company shall have or acquire the lawful right (which may be for a term or indeterminate or revocable at the will of the public authority having jurisdiction over such public highways, streets, alleys, bridges or other public property) for such use; and

G. Any form of solar power satellites, space satellites, space stations and other analogous facilities whether or not in the Earth's atmosphere.

"Property additions," as so defined, shall not include:

AA. Good will or any leases, contracts or operating agreements;

BB. Any shares of stock or certificates or evidences of interest therein, or any bonds, notes or other evidences of indebtedness or certificates of interest therein or any other securities;

CC. Any goods, wares, merchandise, equipment, materials or supplies acquired for the purpose of resale or lease or for consumption in the ordinary course of business or in the operation of any properties of the Company, or held in advance of use thereof for fixed capital purposes;

DD. Any natural gas lands, wells, leases or royalties, or rights or interests therein, or natural gas gathering lines or other works or property used in the production of natural gas;

EE. Except as permitted by C., D., E. or F. above, any rights-of-way or easements with respect to land owned by others or improvements, extensions or additions by the Company on easements or rights-of-way or on leasehold estates or on, over or under public highways, streets, alleys, bridges or other public property;

FF. Any automobiles, trucks or other transportation equipment; or

GG. Any property acquired by the Company with proceeds , of any insurance on property theretofore bonded.

The cost of any property additions shall include a sum equal to the principal amount of any outstanding prior lien bonds secured by a lien on such property additions and not theretofore included in the cost of other property additions which have been bonded. The fair value of any property additions shall be determined without any deduction for any prior liens upon such property. The cost of any property additions constructed by or for the Company shall include such allowances or charges for interest, taxes, engineering, legal expenses, superintendence, insurance, casualties and other items during construction and for intangibles as the signers of an officers' certificate filed at the particular time shall certify (1) are, in the opinion of the signers, proper in respect of the particular property additions specified in said certificate, and
(2) are not in violation of any applicable rules, regulations or orders of any public body or authority exercising supervisory authority over the accounts of the Company.

The cost of any property additions shall mean the cost thereof to the Company and the fair value of any property additions shall mean the fair value thereof to the Company.

If the Company shall have acquired or paid for any property additions in whole or in part through the issue or delivery of shares of stock or other

securities, the portion of the cost of such property additions represented by such shares of stock or other securities shall be deemed to be the fair value in cash of any such shares of stock or other securities at the time of the issue or delivery thereof in payment for, or for the acquisition of, such property additions.

The cost of any property additions consisting of acquired plants or systems shall be deemed to include the cost of any franchises or other rights acquired simultaneously therewith for which no separate or distinct consideration shall have been paid or apportioned. In the determination of the fair value of any such property additions, consideration shall be given to going concern value to the Company as well as to the value of the physical property acquired, but only to the extent that the signer of the certificate required by the terms of subdivision C.3. of Section 3.03 hereof shall certify is, in his opinion, reasonable and proper in respect of the particular property additions specified in said certificate.

The fair value of property additions shall in every case, except as otherwise specifically provided herein, be determined as of a date not more than ninety days prior to the date of application to the Trustee for bonding such property additions.

Property Retirements:

The term, "property retirements," shall mean A. property of the character of property additions owned by the Company on December 3 1, 1943, and B. property additions theretofore bonded, which, in either case, subsequent to said date, shall have worn out or been physically retired, discontinued or abandoned, whether or not renewed or replaced (but shall not include any property only temporarily out of use), or shall have been sold or otherwise disposed of, or released pursuant to Section 7.03 or 7.04 or 7.05 hereof. Property retirements shall not include any amount for the write-down or the write-off of the excess of the cost to the Company of properties acquired as entireties over the original cost of such properties, which may be required by any rule, regulation or order of any public body or authority exercising supervisory authority over the accounts of the Company.

For the purposes of this Indenture all property retirements shall be computed at the original cost thereof (estimated, if necessary), unless such property retirements shall consist of property additions theretofore bonded, in which

case such property retirements shall be computed at the zest or fair value thereof (whichever is less) as certified to the Trustee at the time of bonding such property additions (estimated, if necessary),in each case after deducting from such original cost or cost or fair value, as the case may be, 1. if the property retirements have been released pursuant to Section 7.03 hereof, the consideration received or to be received therefor or an amount equal to the fair value thereof at the time of such release (whichever is greater), or 2. if the property retirements have been released pursuant to Section 7.04 or Section 7.05 hereof, the proceeds of the property so released; provided, however, that if any property retirement is included as a property retirement in an engineer's certificate, required to be filed pursuant to any provision of this Indenture, prior to a release of such property retirement pursuant to Section 7.03 or
Section 7.04 or Section 7.05 hereof, as the case maybe, and if such property retirement shall subsequently be so released, the consideration received or to be received therefor or the fair value thereof at the time of such release (whichever is greater) or the proceeds of the property so released, as the case may be, may be deducted from the amount of any subsequent property retirements.

Publication of Notice:

Wherever herein provision is made for publication of any notice once in each week for any period of consecutive weeks, such publications shall not be required to be made on the same day of each such week, but may be made on any day of any of such weeks, and need not be made in the same newspaper.

Redeemed Bonds and Redeemed Prior Lien Bonds:

The term, "redeemed bonds," shall mean A. bonds which have been deemed to have been paid pursuant to a Section 16.05 Defeasance as provided for in Section 16.05 hereof and B. bonds for the payment or redemption of which cash in the necessary amount shall have been irrevocably deposited with the Trustee (whether upon or prior to the maturity or redemption date of said bonds), provided that if said bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article IV hereof provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and the term, "redeemed prior lien bonds," shall mean prior lien bonds for the payment or redemption of which cash in the necessary amount shall have been irrevocably deposited with the Trustee hereunder, or with the trustee or other holder of the mortgage or other lien securing such prior lien bonds or other prior lien bonds (whether upon, or prior to, the

maturity or the redemption date of such prior lien bonds); provided that if such prior lien bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall, according to an opinion of counsel furnished to the Trustee, have been published or otherwise given as required by the mortgage or other lien securing the same, or provision satisfactory to the Trustee shall have been made for such notice.

Registered Owner:

The term, "registered owner," shall mean the person or persons in whose name or names the particular registered bond without coupons shall be registered, or the particular coupon bond shall be registered as to principal, on the books of the Company, kept for that purpose in accordance with the terms of this Indenture.

Responsible Officers of the Trustee:

The term, "responsible officers of the Trustee," shall mean the chairman of the board of directors, the president, every vice chairman of the board of directors, every vice president, the secretary, every assistant secretary, the treasurer, every assistant treasurer, every senior trust officer, every trust officer, every assistant trust officer and every other officer and assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers respectively or to whom any corporate trust matter is referred because of his knowledge of and familiarity with a particular subject.

Supplemental Indenture:

The term, "supplemental indenture," or "indenture supplemental hereto," shall mean any indenture now or hereafter duly authorized and entered into between the Company and the Trustees, in accordance with the provisions of this Indenture.

Trust Indenture Act of 1939:

The term, "Trust Indenture Act of 1939," shall mean the Trust Indenture Act of 1939 as in effect for the time being.

Trustee--Individual Trust--Trustees:

The term, "Trustee," shall mean Citibank, N.A., (successor to City Bank Farmers Trust Company) or its successor as trustee under this Indenture for

the time being, but not the Individual Trustee, and not a co-trustee or separate trustee appointed pursuant to the provisions of Section 12.15 hereof unless otherwise provided in the instrument of appointment executed pursuant to the provisions of said Section 12.15 and then only to the extent therein provided.

The term, "Individual Trustee," shall mean Robert T. Kirchner (successor to Ralph E. Morton) or his successor as trustee under this Indenture for the time being, but not a co-trustee or separate trustee appointed pursuant to the provisions of Section 12.15 hereof unless otherwise provided in the instrument of appointment executed pursuant to the provisions of said Section 12.15, and then only to the extent therein provided.

The term, "Trustees," shall mean the Trustee and the Individual Trustee for the time being.

ARTICLE II.

DESCRIPTION, EXECUTION AND REGISTRATION OF BONDS.

SECTION 2.01. The bonds issuable under this Indenture may be issued in one or more series as from time to time shall be authorized by the Board and may be provided for in an indenture or indentures supplemental hereto or in certified resolutions, and may be issued originally either as coupon bonds and/or as registered bonds without coupons as the Board shall elect. The bonds of all series shall be known generally as the "First Mortgage Bonds" of the Company, but with respect to the bonds of any particular series, the Company may add to, change or incorporate in such title, as the same may appear at the heading of such bonds and in the coupons thereto attached, the rate of interest borne by the bonds of such series, the date of maturity thereof, or any other words or figures descriptive thereof or of the security therefor, as the Board may determine. The Company may, if the Board so elects and if the Trustee approves, or if the Trustee so requests in writing and if in the opinion of counsel the general designation of the bonds as First Mortgage Bonds is not appropriate under the circumstances existing at the particular time, the Company shall, at any time from time to time change such general designation to such other general designation as may, in the opinion of counsel, be appropriate under such circumstances and not objected to by the Trustee. In the case of any such change, and until a further change, all bonds which may be authenticated and delivered thereafter pursuant to Article III hereof shall bear such new designation. If additional bonds of any particular series, of which

series bonds are outstanding at the time of any such change, shall at any time thereafter be authenticated and delivered, or if any bonds bearing such new designation are authenticated and delivered thereafter pursuant to this Article II in exchange or substitution for or upon transfer of any such bonds, the Company shall provide for the exchange of all bonds of such series at the time outstanding for new bonds of like series and maturity bearing the new general designation, at the option of, but without expense to, the holders.

The bonds of each series and the coupons to be attached to the coupon bonds shall be substantially in the forms hereinbefore recited, with such omissions, variations and insertions as are authorized in the supplemental indenture or certified resolutions of the Board creating such series and as are permitted by, or as may be required to comply with, the terms of this Indenture. The bonds of each series shall be distinguished from the bonds of each other series in such manner, either by a serial designation (which may be noted thereon) and/or in the title of the bonds of such series or otherwise, as the Board may determine. Bonds of the same series may be of different denominations, and bonds of any series may be of serial maturities and if of serial maturities may differ with respect to interest rates, redemption prices and terms of convertibility.

The Company shall deliver certified resolutions to the Trustee or shall execute and deliver a supplemental indenture to the Trustee with respect to each series of bonds issued hereunder which shall specify the designation, terms and provisions of the bonds of such series, as herein required or permitted. Subject to determination from time to time by <the Board, as expressed in said certified resolutions or supplemental indentures:

A. The bonds of any series shall bear interest at such rate or rates (which may include variable rates) and shall be payable as to interest and principal at such time or times and at such place or places as may be provided. in the certified resolutions or supplemental indenture creating such series and expressed in such bonds when issued; provided, however, that the bonds of any series need not bear interest;

B. The principal of and interest on the bonds of any series shall be payable in such coin or currency (which need not be coin or currency of the United States of America) as may be provided in the certified resolutions or supplemental indenture creating such series and expressed in such bonds when issued;

For the purposes of calculations under this Indenture (including calculations of principal amount under Articles III and XIV), the principal

amount of any bonds outstanding hereunder payable in a foreign coin or currency and interest payable in a foreign currency shall be based upon the Federal noon buying rate of such foreign coin or currency in The City of New York, New York (or if no such noon buying rate is known to the signers of the officers' certificate forming a part of the application for the authentication and delivery under this Indenture for the initial authentication and delivery of such bonds, then such other rate as they shall reasonably determine) on a date within ten days prior to the date of such application for authentication and delivery (and set forth in the officers' certificate forming a part of such application). Such principal amount in coin or currency of the United States of America shall not be changed for subsequent calculations of the principal amount of such bonds after the initial determination, but the determination of interest shall be recalculated as required from time to time by the provisions of C.5. of
Section 3.03 hereof.

C. The bonds of any series may be issued as coupon bonds and/or as registered bonds without coupons; and coupon bonds of such denominations as may be specified in the certified resolutions or supplemental indenture creating such series, may contain provisions permitting the exchange thereof for registered bonds without coupons of the same series and maturity and/or permitting the exchange thereof for other coupon bonds of other denominations of the same series and maturity, but of the same aggregate principal, amount; and registered bonds without coupons may contain provisions permitting the exchange thereof for coupon bonds of the same series and maturity and/or permitting the exchange thereof for other registered bonds without coupons of other denominations of the same series and maturity, but of the same aggregate principal amount;

D. Bonds of any series may be issued in such denominations as the Company may elect to have executed and delivered in its behalf;

E. The bonds of any series may be limited as to the maximum principal amount thereof which may be authenticated and delivered by the Trustee or which may be at any one time outstanding, and an appropriate insertion in respect of such limitation may, but need not, be made in the bonds of such series;

F. The bonds and coupons of any series may contain such lawful provisions, if any, with respect to the payment of principal and/or interest thereby represented without deduction for, and/or reimbursement of, such taxes, assessments or governmental charges as may be specified therein or in certified resolutions or an indenture supplemental hereto pursuant to which such bonds are issued, and/or otherwise with respect to relieving the holder from payment of any such taxes, assessments or governmental charges, as shall be prescribed in the certified resolutions or supplemental indenture creating such series;

G. The bonds of any series (or if of serial maturities the bonds of any maturity) may contain such provisions for the redemption thereof, at the option of the Company, at such redemption price or prices, at such time or times, upon such notice, in such manner and upon such other terms and conditions as may be prescribed in the certified resolutions or supplemental indenture creating such series and expressed in such bonds when issued;

H. The bonds of any series (or if of serial maturities, the bonds of any maturity) may be convertible into or exchangeable for, at the option of the holders thereof, capital stock of any class or other securities of the Company or of any other corporation, at such times and upon such terms and conditions and subject to such adjustments as may be prescribed in the certified resolutions or supplemental indenture creating such series and expressed in such bonds or in an endorsement thereon when issued;

I. The bonds of any series (or if of serial maturities, the bonds of any maturity) may be convertible into or exchangeable for, at the option of the holders thereof, bonds of a different series bearing the same or a lesser interest rate, at such times and upon such terms and conditions as may be prescribed in the certified resolutions or supplemental indenture creating such series and expressed in said bonds when issued;

J. The bonds of any series may contain such provisions, if any, for the establishment of a purchase, sinking, amortization, improvement or analogous fund therefor, in such amounts, at such time or times, in such manner and upon such other terms and conditions, and/or for the retirement or redemption of all or any of such bonds by the operation of any such fund or otherwise, at such price or prices, in such amounts, at such time or times, in such manner and upon such other terms and conditions as may be prescribed in the certified resolutions or supplemental indenture creating such series and expressed in such bonds when issued;

K. The bonds of any series may contain provisions reserving to the Company the right to create fully registered bonds that may be registered as to the payment of principal to one holder and to the payment of interest to another holder;

L. The bonds of any series may contain provisions complying with any law or with any rules or regulations made pursuant thereto or with the rules or regulations of any securities exchange or conforming to usage;

M. The bonds of any series need not continue to have the benefit of any security given to the other series of bonds after such other series are no longer outstanding hereunder;

N. The bonds of any series may contain provisions as to exchanging bonds of such series, at the option of the holders thereof, for other bonds

of the same or other series of the same aggregate principal amount of a different authorized kind or authorized denomination or denominations;

0. The bonds of any series may contain such other special terms and conditions, not prohibited by the provisions hereof, as may be prescribed in the certified resolutions or supplemental indenture creating such series; and/or

P. The bonds of any series may contain provisions to reflect technological changes, including but not limited to computer readouts.

Coupon bonds shall bear such date or dates as may be provided in the certified resolutions or supplemental indenture creating such series and shall bear interest in accordance with the coupons attached thereto. Registered bonds without coupons, unless otherwise specifically provided with respect to a series of bonds, shall be dated as of the date of authentication. Unless other provisions (including, but not limited to, provisions establishing or changing record dates for the payment of interest) are specifically provided with respect to a series of bonds, registered bonds without coupons shall bear interest from the beginning of the current interest period for that series; provided, however, that if any registered bond without coupons shall be authenticated and delivered upon a transfer of, or in exchange for or in lieu of, any bond or bonds upon which interest is in default, it shall be dated so that such bond shall bear interest from the last preceding date to which interest shall have been paid on the bond or bonds in respect of which such registered bond without coupons shall have been delivered, unless otherwise specifically provided with respect to a series of bonds.

The bonds of each series and the coupons to be attached thereto may contain such other terms, covenants, conditions, provisions, specifications, descriptive words and recitals, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements thereon, as may be required or desirable to comply with the rules of any securities exchange or to conform to law or usage in respect thereof, or as may be prescribed herein or, consistently with the provisions hereof, in the certified resolutions or supplemental indenture creating such series.

SECTION 2.02. The bonds of each series shall be issued in such denominations and shall be numbered or otherwise distinguished in such manner or in accordance with such plan as the Board of Directors of the Company may, at the time of the creation of such series or at any time and from time to time

thereafter, determine in accordance with the provisions of Section 2.01 hereof. In the absence of any such determination with respect to the bonds of any particular series, the coupon bonds of such series shall be issued in denominations of $1,000, and the registered bonds without coupons of such series shall be issued in denominations of One Thousand Dollars ($l,OOO), or any multiple of One Thousand Dollars ($l,OOO), as the Company shall in writing request.

In all cases in which the privilege of exchanging bonds exists and is exercised, the bonds to be exchanged shall be surrendered at such place or places as shall be designated by the Board of Directors. All coupon bonds so surrendered and all coupon bonds delivered in exchange therefor or in exchange for registered bonds without coupons shall be accompanied by all unmatured coupons appertaining thereto; provided that when coupon bonds are so surrendered for exchange or are issued in exchange for other coupon bonds or registered bonds without coupons at a time when the Company is in default in the payment of interest on the series of bonds to which such bonds belong, the coupon bonds so surrendered and the coupon bonds so issued in exchange shall also be accompanied by such matured coupons as represent the interest so in default. All bonds so surrendered shall be forthwith cancelled and delivered to or upon the order of the Company. All bonds executed, authenticated and delivered in exchange for bonds so surrendered shall be the valid obligations of the Company, evidencing the same debt as the bonds surrendered, and shall be secured by the lien of this Indenture and entitled to all of the benefits and protection hereof to the same extent as the bonds in exchange for which they are executed, authenticated and delivered.

SECTION 2.03. From time to time the bonds issuable hereunder shall be executed on behalf of the Company by its Chairman, Chief Executive Officer, President, Vice Chairman or a Vice President, or any other officer selected by the Board of Directors, under its corporate seal, which may be facsimile, attested by its Secretary or an Assistant Secretary, or by such other signers and by such other form of execution, which may include facsimile signatures of signing officers, as may be designated or prescribed by certified resolution of the Board of Directors or in a supplemental indenture. In case any officer ' of the Company who shall have signed or sealed any bond shall cease to be such officer of the Company before the bond so signed or sealed shall have been actually authenticated and delivered by the Trustee, such bond, nevertheless, may be authenticated and delivered and issued as though the person who had signed or sealed such bond had not ceased to be an officer of the

Company; and also any bond may be signed and sealed on behalf of the Company by such persons as at the actual date of the execution of such bond shall be the proper officers of the Company, although at the date of such bond any such person shall not have been an officer of the Company. The coupons to be attached to the coupon bonds shall be authenticated by the facsimile signature of the present or any future Treasurer or any Assistant Treasurer of the Company or by such other signer or signers as may be designated or prescribed by certified resolution or in a supplemental indenture, and the Company may adopt and use for that purpose the facsimile signature of any person who shall have been such authorized signatory, notwithstanding the fact that he may not have been such authorized signatory at the date of such bonds or that he may have ceased to be such authorized signatory at the time when such bonds shall be actually authenticated and delivered.

SECTION 2.04. The bonds when executed shall be delivered to the Trustee for authentication by it; and thereupon, as provided in this Indenture and not otherwise, the Trustee shall authenticate and deliver the same. Only such bonds as shall bear thereon a certificate of authentication substantially in the form hereinbefore recited, executed by the Trustee, shall be secured by this Indenture, or be entitled to any lien, right or benefit hereunder. No bond and no coupon thereunto appertaining shall be or become valid or obligatory for any purpose until such certificate shall have been duly executed on such bond; and such authentication by the Trustee upon any bond shall be conclusive evidence and the only evidence that the bond so authenticated has been duly issued hereunder. Before authenticating and delivering any bond, the Trustee shall, subject to the provisions of Sections 2.02 and 2.08 hereof, detach and cancel any then matured coupons thereto attached and deliver the same to or upon the order of the Company.

SECTION 2.05. Pending the preparation of definitive bonds of any series issuable under this Indenture, the Company may execute and, upon its request in writing, the Trustee shall authenticate and deliver, in lieu of such definitive bonds and subject to the same provisions, limitations and conditions, one or more temporary bonds, in denominations as provided or permitted under the provisions of Section 2.02 hereof, or multiples thereof, substantially of the tenor of the bonds to be issued as hereinbefore recited, with or without coupons, or with one or more coupons, and with or without privilege of registration, and with such omissions, insertions and variations as may be appropriate. The Company shall, at its own expense, prepare, execute and deliver to the Trustee, and thereupon, upon the presentation and surrender of temporary

bonds, the Trustee shall authenticate and deliver, in exchange therefor, definitive bonds of the same series and maturity and for the same principal sum in the aggregate as the temporary bonds surrendered. All temporary bonds so surrendered shall be forthwith cancelled by the Trustee and delivered to or upon the order of the Company. Until definitive bonds of any series are so delivered to the Trustee, the temporary bonds shall be exchangeable for other temporary bonds of the same series and maturity and of different denominations but of the same principal amount in the aggregate if and to the extent that the Board of Directors of the Company shall so determine. Until exchanged for definitive bonds, the temporary bonds shall in all respects be entitled to the lien and security of this Indenture, and interest not represented by coupons attached thereto, when and as payable, shall be paid upon the presentation of such bonds and endorsement of such payment shall be made thereon.

SECTION 2.06. The Company shall keep, at such place or places as shall be designated for the purpose, records for the registration and transfer of bonds issued hereunder, which, at all reasonable times, shall be open for inspection by the Trustee; and upon presentation for such purpose at any such place or places, the Company will register or cause to be registered therein, and permit to be transferred thereon, under such reasonable regulations as it may prescribe, any bonds issued under this Indenture and entitled to registration or transfer at such office. Upon the transfer of any fully registered bonds, the Trustee shall authenticate and the Company shall issue in the name of the transferee or transferees a new fully registered bond or new fully registered bonds of the same series for a like principal amount. All fully registered bonds so surrendered for transfer shall be cancelled by the Trustee. The Trustee is hereby appointed the registrar of the Company for the purpose of registering, transferring and exchanging the bonds issued hereunder until it shall receive written notice to the contrary.

The holder of any coupon bond entitled by its terms to be registered as to principal may have the ownership thereof as to principal registered on said records, and such registration shall be noted on the bond. After such registration no transfer shall be valid unless made on said records by the registered owner in person, or by an attorney duly authorized in writing, and similarly noted on the bond; but the same may be discharged from registration by being in like manner transferred to bearer, and thereupon transferability by delivery shall be restored, and such bond may again from time to time be registered or transferred to bearer as before. Such registration, however, shall not affect the

negotiability of the coupons, and every such coupon shall continue to be transferable by mere delivery, and shall remain payable to bearer, and payment thereof to bearer shall fully discharge the Company in respect of the interest therein mentioned, whether the bond be registered or not and whether or not such coupons shall have matured.

Whenever the registered owner of any registered bond without coupons shall surrender the same to the Company for transfer, together with a written instrument of transfer, in form approved by the Company, duly executed by such registered owner or by an attorney duly authorized in writing, the Company shall execute, and the Trustee shall authenticate, and it or the Company shall deliver in exchange therefor, a new registered bond or bonds without coupons or, if such bond is by its terms exchangeable for coupon bonds, a new coupon bond or bonds of the same series and maturity and for the same aggregate principal amount. All bonds so surrendered shall be forthwith cancelled and delivered to or upon the order of the Company.

Additional place or places for the registration and transfer of the bonds of any particular series may, but need not, be appropriately recited in the bonds of such series.

In lieu of inspecting any records for the registration and transfer of bonds, which shall not at the time be kept at the office of the Trustee, the Trustees, subject to the provisions of Section 12.02 hereof, shall be entitled to accept and rely upon a certificate of the agent or officer in charge thereof as to the facts and matters therein appearing, including the names and addresses of the holders of bonds registered therein and the amounts, numbers and series of such bonds.

SECTION 2.07. Subject to the provisions of Section 4.01 hereof, for any exchange of bonds for bonds of another denomination, or of coupon bonds for registered bonds without coupons, or of registered bonds without coupons for coupon bonds, or for any transfer of registered bonds without coupons, or for the registration as to principal of any coupon bond, or for the purpose of discharging any bond from such registration as to principal, the Company at its option may require the payment of a sum sufficient to reimburse it for any stamp tax or other governmental charge incident thereto, and in addition thereto, of a further sum, if any, provided as a term of such series of bonds for each bond authenticated and delivered upon any such transfer or exchange, which sum shall be paid by the party requesting such transfer or exchange as a condition precedent to the exercise of the privilege of making such transfer

or exchange. Unless otherwise required in the certified resolutions or supplemental indenture creating such series, the Company shall not be required to make transfers or exchanges of bonds of any series selected for redemption or during the period of fifteen days next preceding any interest payment date of such series (unless such series has a record date for the payment of interest) or next preceding any selection of bonds of said series to be redeemed, but may do so at its option.

SECTION 2.08. In case any bond shall be mutilated or destroyed or lost or stolen, the Company, in its discretion, may issue, and thereupon the Trustee shall authenticate and deliver, a new bond of like series and tenor, having attached, in case of a coupon bond, the same corresponding coupons as the mutilated, destroyed, stolen or lost bond, in exchange and substitution for and upon surrender and cancellation of, the mutilated bond and its coupons, or in lieu of and in substitution for the bond and its coupons so destroyed or lost or stolen. The applicant for such substituted bond shall furnish to the Company and the Trustee evidence satisfactory to each of them of the destruction or loss or theft of such bond and its coupons so destroyed or lost or stolen, and indemnity satisfactory to both of them in their discretion. The Company may require the payment of a sum not exceeding two dollars (unless a different sum is specified in certified resolutions or a supplemental indenture) for each new bond issued under this Section 2.08, and of the expenses which may be incurred by the Company and the Trustee in the premises.

Any bond or coupon issued under the provisions of this Section 2.08, in lieu of any bond or coupon 5 alleged to have been lost, stolen or destroyed, shall constitute an original contractual obligation on the part of the Company, whether or not the bond or coupon so alleged to have been lost, stolen or destroyed be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits hereof with all other bonds or coupons issued under this Indenture.

All mutilated bonds and coupons surrendered to the Trustee pursuant to the provisions of this Section 2.08 shall be cancelled by the Trustee and shall be destroyed by the Trustee and a certificate evidencing the destruction hereof shall be delivered to the Company.

SECTION 2.09. The terms of Part I of the Twenty-ninth Supplemental Indenture (relating to the Twenty-sixth Series of bonds) shall remain in effect so long as any Bonds of Twenty-sixth Series remain outstanding.

ARTICLE III.

ISSUE OF BONDS.

SECTION 3.01. GENERAL PROVISIONS. The aggregate principal amount of bonds which may be executed by the Company and authenticated and delivered by the Trustee and be secured by this Indenture and outstanding at any one time shall not, in any event, exceed the amount at the time permitted by law, but otherwise, except as hereinafter in this Article III provided, is not limited; provided, however, that the aggregate principal amount of bonds which may be so executed, authenticated and delivered hereunder may, at any time at the election of the Company evidenced by an indenture supplemental hereto, be limited to such definite aggregate principal amount as may be specified in such supplemental indenture; and, subject to the provisions of Section 4.04 hereof and to the provisions of Article XVI hereof, this Indenture shall be and constitute a continuing lien to secure the full and final payment of the principal of and interest (and premium, if any) on all bonds which may, from time to time, be executed, authenticated and delivered hereunder. All bonds and coupons shall in all respects, subject to the terms with respect to any purchase, sinking, amortization, improvement or analogous fund for any particular series of bonds as established by any certified resolutions or any indenture supplemental hereto, be equally and ratably secured hereby without preference, priority or distinction on account of the actual time or times of the issue or maturity of the bonds and coupons, or any of them, so that all bonds and coupons at any time outstanding hereunder shall, subject to the terms of any certified resolutions or any indenture supplemental hereto, as aforesaid, have the same right, lien and preference under and by virtue of this Indenture, and shall all be equally secured hereby, with like effect as if they had all been executed, authenticated and delivered simultaneously on the date hereof, whether they, or any of them, shall actually be sold or disposed of at such date, or whether they, or any of them, shall be sold or disposed of at some future date, or whether they, or any of them, shall have been authorized to be issued under the provisions of Section 3.02 hereof, or may be authorized to be issued hereafter pursuant to other provisions of this Indenture.

SECTION 3.02. INITIAL SERIES. Bonds of the initial series were retired at or before maturity in 1969.

SECTION 3.03. ISSUE OF BONDS UPON THE BASIS OF PROPERTY ADDITIONS. From time to time hereafter the Company may execute and deliver to

the Trustee, and the Trustee shall thereupon authenticate and deliver to or upon the order of the Company, in addition to the bonds authorized to be issued pursuant to other provisions of this Article III, additional bonds for an aggregate principal amount equal to seventy per cent (70%) of the amount of net property additions not theretofore bonded, subject, however, to the following restrictions:

A. The provisions of Section 5.10 hereof, if applicable, shall be complied with.

B. If the property additions proposed to be made the basis for the authentication and delivery of bonds under the provisions of this Section 3.03 are subject to any prior lien, then the amount of bonds otherwise issuable under the provisions of this Section 3.03 shall be reduced by an amount equal to the principal amount of the then outstanding prior lien bonds secured by such prior lien and not theretofore deducted in connection with applications under this Indenture for the authentication and delivery of bonds, the withdrawal of cash, the reduction of cash or the release of property.

C. The Trustee shall authenticate and deliver such additional bonds only upon receipt by it of:

1. A certified resolution authorizing the execution and requesting of the authentication and delivery of such additional bonds in the principal amount therein specified, designating the series of such bonds and the certified resolutions or indenture supplemental hereto creating such series, and naming the officer or officers of the Company to whom or upon whose order such bonds shall be delivered.

2. An engineer's certificate stating, as of a date specified in such certificate (herein referred to as the effective date of such certificate) which shall be not more than ninety days prior to the date of filing of the application with the Trustee, in substance:

a) That the Company has purchased, constructed or otherwise acquired, prior to the effective date of such certificate, certain property additions, which shall be described in the certificate in reasonable detail; that such property additions when acquired were property additions as defined in Article I hereof; the lesser of the cost or the fair value (in the opinion of the signers) of such property additions as have not theretofore been bonded (or, in respect of property additions utilized under any maintenance, replacement, improvement or analogous fund requirement of any certified resolution or any indenture supplemental hereto, dated after March 1, 1987 and requiring such

statement in respect of property additions so utilized, the lesser of the cost or fair value, in the opinion of the signers, of such property additions as certified to the Trustee pursuant to any such requirement);

b) the lesser of the cost or fair value (in the opinion of the signers) of all property retirements consisting of property additions theretofore bonded and the original cost of all other property retirements, determined as provided in the definition of property retirements (in each case not included in any engineer's certificate previously filed pursuant to this subdivision C.2. and made up to the effective date of such certificate), which property retirements shall be described in the certificate in reasonable detail; whether any property retirements made prior to the effective date of the next preceding engineer's certificate filed pursuant to this subdivision C.2., but not released prior to such effective date pursuant to Section 7.03 or Section 7.04 or Section 7.05 hereof, have been so released prior to the effective date of the engineer's certificate then being filed, and describing any such released property retirements in reasonable detail and stating the consideration therefor, if any, and the fair value thereof at the time of such release, or the proceeds thereof, as the case may be;

c) the amount of net property additions as of the effective date of such certificate and how the same has been computed; and

d) as regards such of the property additions described in the certificate as have not theretofore been bonded:

(1) Whether any portion of such property additions consists of easements or rights-of-way or rights, permits or licenses to use or appropriate water or to overflow the land of others, or permanent improvements, extensions or additions to or upon land covered by easements, rights-of-way or leases, or such rights, permits or licenses, and, if so, that such property additions meet the requirements of subdivision E. of the definition of property additions in Article I hereof; whether any portion of such property additions consists of permanent improvements, extensions or additions located or constructed on, over or under public highways, streets, alleys, bridges or other public property; and

(2) Whether any portion of such property additions consists of acquired plants or systems, and, if so, separately describing such property additions and separately stating the cost or the fair value (whichever is less) of such proper-

ty additions, and also stating that such fair value was taken at the amount stated in the independent engineer's certificate provided for in subdivision C.3. of this Section 3.03.

For the purpose of any certificate to be filed in accordance with the provisions of this subdivision 2., the signers of such certificate may, as to property additions and property retirements theretofore included in any engineer's certificate filed in accordance with the provisions of this subdivision 2., rely, subject to the provisions of Section 17.08 hereof, upon the facts and statements contained in any such engineer's certificate except with regard to fair value of property additions (other than those utilized under any maintenance, replacement, improvement or analogous fund requirement of any indenture supplemental hereto) not bonded prior to the date of the certificate being filed, and make by reference any or all such previous engineer's certificates a part of the certificate being filed.

3. In case any property additions are shown by the engineer's certificate provided for in subdivision C.2. of this Section 3.03 to consist of acquired plants or systems, an independent engineer's certificate stating, in the opinion of the signer, the fair value of such property additions computed as provided in Article I hereof, and also stating whether in the determination of such fair value consideration has been given to going concern value to the Company, and if so the amount thereof shall be stated and the signer shall state that the amount so included is, in his opinion, reasonable and proper in respect of the particular property additions specified.

4. In case any property additions are shown by the officers' certificate provided for in subdivision C.8. of this Section 3.03 to have been acquired or paid for in whole or in part through the issue or delivery of shares of stock or other securities, an appraiser's certificate, stating the fair value in cash of such shares of stock or other securities at the time of the issue or delivery thereof in payment for or for the acquisition of such property additions.

5. An accountant's certificate (hereinafter sometimes referred to as an "earnings certificate") stating that the net earnings of the Company available for interest and for depreciation and/or property retirement reserves, for any specified twelve consecutive calendar months during the period of fifteen calendar months immediately preceding the first day of the calendar month in which the application for the authentication of additional bonds is made, have been in the aggregate equal to at least two and one-half times the amount of the aggregate annual stated interest charges, if any, on the following:

a) all bonds outstanding hereunder (other than bonds held by the Trustee for the purpose of any sinking fund or analogous

fund for the retirement of bonds for which provision may be made in any supplemental indenture, whether or not such supplemental indenture shall specify that the bonds held for the purpose of such fund are outstanding bonds) at the date of such certificate, except any bonds the payment of which the bonds applied for are to be issued; provided that, if any such series of outstanding bonds bears interest at varying rates, then the interest on such series of bonds shall be computed at the average annual rate in effect for such series during the period of twelve consecutive calendar months (or any portion thereof in which bonds of such series are outstanding) being used for the calculation of earnings; and if such outstanding bonds have been issued after the end of such twelve consecutive calendar months, then computed at the initial rate upon issuance;

b) all bonds then applied for in pending applications, including the application in connection with which such certificate is made; computed at the initial rate upon issuance;

c) all prior lien bonds which will be outstanding immediately after the authentication of the bonds then applied for in pending applications, including the application in connection with which such certificate is made; provided that, if any prior lien bonds bear interest at varying rates, then the interest on such prior lien bonds shall be computed at the average annual rate in effect for such prior lien bonds during the period of twelve consecutive calendar months (or any portion thereof in which such prior lien bonds are outstanding) being used for the calculation of earnings; and if such prior lien bonds have been issued after the end of such last month, then computed at the initial rate upon issuance; and

d) the principal amount of all other indebtedness (except indebtedness owned by the Company and except indebtedness for the payment of which the bonds applied for are to be issued and indebtedness for the purchase, payment or redemption of which moneys in the necessary amount shall have been deposited with or be held by the Trustee or the trustee or other holder of a prior lien upon property subject to the lien of this Indenture with irrevocable direction so to apply the same; provided that, in the case of redemption, the notice required therefor shall have been given or have been provided for to the satisfaction of the Trustee), outstanding on the date of such certificate and secured by lien prior to the lien of this Indenture upon property subject to the lien of this Indenture, if said indebtedness has been assumed by the Company or if the Company customarily pays the interest upon the principal thereof.

Such certificate shall also state that such net earnings have been calculated in accordance with the provisions of this subdivision 5., and shall specify (1) the operating revenues of the Company, which may include revenues collected by the Company subject to possible refund at a future date, (2) the net non-operating income of the Company, (3) the operating expenses of the Company and (4) the net earnings of the Company available for interest and for depreciation and/or property retirement reserves.

For all purposes of this Indenture the net earnings of the Company available for interest and for depreciation and/or property retirement reserves shall be ascertained as follows: From the total of the operating revenues (including rentals) and net non-operating income of the Company (not including therein any gains or losses upon the sale of capital assets), there shall be deducted all operating expenses (excluding all appropriations for depreciation and/or property retirement reserves and for the amortization of fixed capital, whether tangible or intangible, all interest charges, all taxes which are levied upon or based upon income after deduction of interest charges or upon profits and all amortization of debt and/or preferred stock discount and/or expense, but including all rentals, insurance, expenditures for current maintenance and repairs, and taxes, except such taxes as are levied upon or based upon income after deduction of interest charges or upon profits) and the balance shall constitute net earnings of the Company available for interest and for depreciation and/or property retirement reserves; provided, however, that for the purpose of this Indenture (and said certificate shall in each instance so state) the sum of net non-operating income plus that portion of operating income which, in the opinion of the signers, is directly derived from the operations of property (other than paving, grading and other improvements to, under or upon public highways, bridges, parks or other public properties of analogous character) not subject to the lien of this Indenture at the date of such certificate shall be included in the computation of said net earnings only to the extent that such sum above shall not exceed fifteen per cent (15%) of such total net earnings.

In case the Company shall have acquired any plant or system or shall have been consolidated or merged with any other corporation, or shall have acquired all or substantially all of the assets of another corporation, within or after the period for which the calculation of net earnings is made pursuant to the provisions of this subdivision 5., then in ascertaining such net earnings there shall be included, to the extent the same may not have been otherwise included, the net earnings or net losses of such acquired plant or system or of such other corporation, as the case may be, for the whole of such period subject to the limitation set forth in the preceding paragraph. Such net earnings for the period preceding such acquisition or such consolidation or merger shall be ascertained as in this subdivision 5. provided, as if such acquired plant or system or the assets of such other

corporation, as the case may be, had been owned by the Company during the whole of such period or as if such other corporation had been consolidated or merged with the Company during the whole of such period.

In case the twelve months' period for which the net earnings of the Company available for interest and for depreciation and/or property retirement reserves are to be stated as aforesaid is a period with respect to which an annual report is required to be filed by the Company pursuant to
Section 5.17 hereof, and in case the aggregate principal amount of bonds authenticated and delivered since the commencement of the then current calendar year (other than those with respect to which an earnings certificate is not required or with respect to which an independent accountant's certificate has previously been furnished) is ten per cent (10%) or more of the bonds at the time outstanding hereunder, the certificate required by this subdivision 5. shall be an independent accountant's certificate instead of an accountant's certificate.

Unless otherwise specifically provided with respect to a series of bonds, if interest on any bonds outstanding hereunder is payable solely in the coin or currency of a foreign nation, then the annual interest charges for such bonds shall be based upon the Federal noon buying rate (on a date within ten days prior to the date of the application for the authentication and delivery under this Indenture of bonds in connection with which such earning certificate is delivered) of such foreign coin or currency in The City of New York, New York (if no such noon buying rate is known to the signers of such certificate, then such other rate as they shall reasonably determine).

6. Such instruments of conveyance, transfer and assignment, if any, as the opinion of counsel provided for in subdivision 7. below specifies as necessary for the purpose of effectually subjecting to the direct lien and operation of this Indenture, or of vesting in the Trustees to hold as a part of the mortgaged property, the property additions made the basis of the application.

7. An opinion of counsel to the effect:

a) That the Company has good title to any tracts or parcels of land constituting property additions mentioned and described in the engineer's certificate provided for in subdivision C.2. of this
Section 3.03, and a valid right in or with respect to any easements or rights-of-way or any rights, permits or licenses to use or appropriate water or to overflow the lands of others, mentioned and described in said certificate, sufficient for the purposes for which the same were acquired; and if such property additions include any property located on any leasehold estate held by the Company as lessee, that the Company has the right

to remove the same prior to or upon the termination of such leasehold, without compensation or other remuneration and free of any lien prior or equal to the lien of this Indenture or that such lease expires on a date not less than twenty-five years after the date of the application for the authentication and delivery of bonds then being made or on a date not earlier than the date of maturity of the latest maturing bonds outstanding at said date of application, including any bonds for the authentication and delivery of which such application is made; that the Company has a valid right in or with respect to any other property additions mentioned and described in said certificate sufficient for the purposes for which the same were acquired; and, if such property additions include any property additions located on, over or under any public highways, streets, alleys, bridges or other public property, that the Company has the lawful right (which may be for a term or indeterminate or revocable at the will of the public authority having jurisdiction over such public highways, streets, alleys, bridges or other public property) for such use; that, in each such case, the title or right of the Company is free and clear of any lien or encumbrance ranking prior to the lien of this Indenture, excepting the liens of prior liens (if any) specified in such opinion and permissible encumbrances; and that the nature and extent of the prior liens, if any, on such property additions, described in said officers' certificate, are correctly stated and if property additions made the basis of the application are located in the Dominion of Canada, that the applicable laws make the lien hereof on such property additions at least substantially as effective to secure the bonds then outstanding as the laws of the State of Michigan would make the lien hereof on comparable property additions if located in the State of Michigan;

b) That the Company has corporate authority to own such property additions;

c) That, since the date of the last previous opinion of counsel filed with the Trustee in the same regard pursuant to any of the provisions of this Section 3.03 or Sections 3.04, 3.05 or 3.06 hereof (or, in the case of the first such opinion filed under any of said sections, since the date hereof), no property owned by the Company and theretofore bonded other than such property additions has become subject to any lien or encumbrance not existing thereon at such prior date, prior to the lien of this Indenture as security for the bonds for the authentication and delivery of which application is then being made, excepting permissible encumbrances;

d) That the issue of bonds, the authentication and delivery of which have been applied for, has been duly authorized by all governmental authorities the consent of which is requisite to the legal issue of such bonds (specifying such authorities and the manner in which their consents are evidenced), or that no such consent is required; that the Company is duly authorized and entitled to issue such bonds in accordance with the provisions of this Indenture and the applicable laws of the State of Michigan and the applicable laws of any other jurisdiction; that upon the issue of such bonds and receipt by the Company of the consideration to be paid therefor, such bonds will be the valid and binding obligations of the Company and the amount of bonds then outstanding under this Indenture will not exceed the amount at the time permitted by law; and that all conditions precedent provided for in this Indenture relating to the authentication and delivery of the additional bonds applied for have been complied with; and

e) That for the purpose of effectually subjecting to the direct lien and operation of this Indenture, or of vesting in the Trustees to hold as a part of the mortgaged property, the property additions made the basis of the application either (1) certain instruments of conveyance, transfer or assignment (specifying them) are necessary, and, if so, that the instruments delivered to the Trustee pursuant to subdivision 6. above are sufficient for that purpose, or (2) no instruments of conveyance, transfer, or assignment are necessary.

8. An officers' certificate stating in substance:

a) That, since the effective date of the engineer's certificate filed pursuant to subdivision C-2. of this Section 3.03, the Company has not made any extraordinary property retirements of bonded property and that no extraordinary property retirements of bonded property are immediately contemplated by the Company which would cause the aggregate fair value of the bonded property to be less than 10/7ths of the aggregate outstanding principal amount of the bonds including the bonds then being applied for;

b) That the property additions specified in the accompanying engineer's certificate are desirable in the proper conduct of the business of the Company and that no portion of such property additions has been theretofore bonded;

c) Whether any portion of the property additions specified in the accompanying engineer's certificate has been acquired or

paid for in whole or in part through the issue or delivery of shares of stock or other securities, and, if so, describing the shares of stock or other securities so issued or delivered and stating that, for the purpose of determining the cost of the property additions so acquired or paid for such shares of stock or other securities were taken at their fair value in cash as stated in the appraiser's certificate provided for in subdivision C.4. of this Section 3.03;

d) As to any portion of the property additions specified in the accompanying engineer's certificate (or any of the property retirements referred to in the certificate) that consists of property stated in the accompanying opinion of counsel to be subject to a prior lien; such property additions or property retirements shall be separately described and the cost or the fair value (whichever is less) of such property additions and the original cost, or the cost or fair value (whichever is less) as certified to the Trustee at the time of bonding thereof, as the case may be, of such property retirements shall be separately stated and it shall also be stated whether or not such prior lien has theretofore been included in the cost of other property additions which have been bonded;

e) If any portion of such property additions specified in the accompanying engineer's certificate is at the time subject to a prior lien, (1) the total principal amount of all outstanding prior lien bonds secured thereby, and (2) whether or not any deduction in respect of any such prior lien bonds has theretofore been made in connection with any application for the authentication and delivery of bonds, or for the withdrawal of cash, or for the reduction of cash, or for the release of property, under this Indenture, and, if so, stating the principal amount of the prior lien bonds with respect to which such deduction has been made;

f) That such allowances or charges for interest, taxes, engineering, legal expenses, superintendence, insurance, casualties and other items during construction and intangibles as are included in the cost of any property additions constructed by or for the Company and described in the accompanying engineer's certificate are, in the opinion of the signers, proper in respect of said property additions and are not in violation of any applicable accounting rules, regulations or orders of any public body or authority exercising supervisory authority over the accounts of the Company; and

g) That the Company is not and, upon the granting of the application then being made, will not be in default under the

covenant contained in Section 5.10 hereof, or, to the knowledge of the signers, under any other terms or covenants of this Indenture; and that all conditions precedent provided for in this Indenture relating to the authentication and delivery of the additional bonds applied for have been complied with.

9. Documents evidencing the authorization by all governmental authorities, the consents of which are requisite to the legal issue of such bonds in accordance with the opinion of counsel required to be filed pursuant to the provisions of subdivision C.7.d) of this Section 3.03.

SECTION 3.04. ISSUE OF BONDS UPON THE BASIS OF PRIOR LIEN BONDS.

A. At any time after the amount of any outstanding prior lien bonds shall have been deducted in connection with any application for the authentication and delivery of bonds, or for the withdrawal of cash, or for the reduction of cash, or for the release of property, under any of the provisions of this Indenture, the Company may, in addition to the bonds authorized to be issued under the other provisions of this Article III, execute and deliver to the Trustee, and the Trustee shall thereupon authenticate and deliver to or upon the order of the Company, additional bonds for an aggregate principal amount equal to the aggregate principal amount of such prior lien bonds, deducted as aforesaid, which subsequent to such deduction shall have been deposited with the Trustee or paid or reduced or ascertained by a final judicial determination to be invalid, and in no case theretofore bonded, but only upon receipt by the Trustee of:

1. A certified resolution setting forth the same matters as are required to be stated pursuant to the provisions of subdivision C. 1. of Section 3.03 hereof.

2. Either:

a) prior lien bonds made the basis of the application and then or theretofore delivered to the Trustee, either uncancelled and pledged under this Indenture pursuant to the provisions of Section 5.09 hereof, to be held and dealt with by the Trustee in the manner and subject to the provisions of Article VI hereof, or cancelled at maturity or under the redemption or other provisions of the instrument evidencing the mortgage or other lien securing the same or otherwise, or

b) an officers' certificate, accompanied by a concurring opinion of counsel, to the effect that specified prior lien bonds made the basis of the application have been paid or reduced or ascertained by final

judicial determination to be in whole or in part invalid, or constitute redeemed prior lien bonds, and specifying the amount of payment or reduction or the extent of invalidity or the amount of bonds redeemed, as the case may be.

3. An officers' certificate stating in substance:

a) That the prior lien bonds made the basis for the application have theretofore been deducted in connection with applications under this Indenture for the authentication and delivery of bonds, the withdrawal of cash, the reduction of cash or the release of property;

b) That no part of the prior lien bonds made the basis for the application has theretofore been bonded;

c) That the Company is not and, upon the granting of the application then being made, will not be in default in the performance of any of the terms or covenants of Sections 5.09 and 5.10 hereof; and

d) That the Company is not, to the knowledge of the signers, in default in the performance of any of the other terms or covenants of this Indenture; and that all conditions precedent provided for in this Indenture relating to the authentication and delivery of the additional bonds applied for have been complied with.

4. An opinion of counsel to the effect:

a) That such uncancelled prior lien bonds as shall have been deposited with the Trustee pursuant to this Section 3.04 have been legally and validly pledged under this Indenture;

b) that the issue of bonds, the authentication and delivery of which have been applied for, has been duly authorized by all governmental authorities, the consent of which is requisite to the legal issue of such bonds (specifying such authorities and the manner in which their consents are evidenced), or that no such consent is required, that the Company is duly authorized and entitled to issue such bonds in accordance with the provisions of this Indenture and the applicable laws of the State of Michigan, and the applicable laws of any other jurisdiction, that upon the issue of such bonds and receipt by the Company of the consideration to be paid therefor, such bonds will be the valid and binding obligations of the Company, that the amount of bonds then outstanding under this Indenture will not exceed the amount at the time permitted by law, and that all conditions precedent provided for in this Indenture relating to the authentication and delivery of the additional bonds applied for have been complied with; and

c) That, since the date of the last previous opinion of counsel filed with the Trustee in the same regard pursuant to any of the provisions of this Section 3.04 or Sections 3.03, 3.05 or 3.06 hereof (or, in the case of the first such opinion filed under any of said sections, since the date hereof), no property owned by the Company and theretofore bonded has become subject to any lien or encumbrance not existing thereon at such prior date, prior to the lien of this Indenture as security for the bonds for the authentication and delivery of which application is then being made, excepting permissible encumbrances.

5. An accountant's certificate or independent accountant's certificate, as the case may be, as to the same matters as would be required to be stated pursuant to the provisions of subdivision C.5. of Section 3.03 hereof, if, and only to the extent that, such certificate would be required if the prior lien bonds made the basis of the application were bonds and such certificate would be required to be delivered pursuant to the provisions of Section 3.06 hereof*

6. Documents evidencing the authorization by all governmental authorities, the consents of which are requisite to the legal issue of such bonds, in accordance with the opinion of counsel required to be filed pursuant to the provisions of subdivision A.4.b) of this Section 3.04.

B. Redeemed prior lien bonds shall be deemed to have been paid and cancelled within the meaning of this Section 3.04.

C. Whenever the mortgage or other instrument securing any prior lien bonds shall have been cancelled or shall have been discharged of record, additional bonds for an aggregate principal amount equal to the total principal amount of prior lien bonds secured by such prior lien theretofore deducted in connection with applications for the authentication and delivery of bonds, or for the withdrawal of cash, or for the reduction of cash, or for the release of property, under any of the provisions of this Indenture, less the sum of 1. the total principal amount of such prior lien bonds theretofore bonded, and 2. the total principal amount of such prior lien bonds which the Company has agreed will not be bonded as provided in Section 5.09 hereof, shall be authenticated by the Trustee and delivered to or upon the order of the Company, but only upon receipt by the Trustee of:

a) A certified resolution, officers' certificate, accountant's certificate or independent accountant's certificate, opinion of counsel, and documents, all in form as prescribed in subdivisions A.l., 3.c), d), 4., 5., and 6. of this Section 3.04;

b) An officers' certificate stating:

(1) The total principal amount of prior lien bonds secured by such prior lien theretofore deducted in connection with applications under this Indenture for the authentication and delivery of bonds, the withdrawal of cash, the reduction of cash or the release of property;

(2) The total principal amount of prior lien bonds secured by such prior lien theretofore bonded; and

(3) The total principal amount of prior lien bonds, if any, secured by such prior lien which the Company has agreed will not be bonded as provided in Section 5.09 hereof; and

SECTION 3.05. ISSUE OF BONDS UPON DEPOSIT OF CASH WITH TRUSTEE. From time to time hereafter the Company, in addition to the bonds authorized to be issued pursuant to other provisions of this Article III, may execute and deliver to the Trustee, and the Trustee shall thereupon authenticate and deliver to or upon the order of the Company, additional bonds for an aggregate principal amount equal to the amount of cash which shall hereafter be deposited with the Trustee hereunder as a basis therefor, but only upon receipt by the Trustee of:

A. A certified resolution setting forth the same matters as are required to be stated pursuant to the provisions of subdivision C.1. of Section 3.03 hereof;

B. An officers' certificate stating that the Company is not, to the knowledge of the signers, in default in the performance of any of the terms or covenants of this Indenture, and that all conditions precedent provided for in this Indenture relating to the authentication and delivery of the additional bonds applied for have been complied with;

C. An accountant's certificate or independent accountant's certificate, as the case may be, as to the same matters as are required to be stated pursuant to the provisions of subdivision C.5. of Section 3.03 hereof;

D. Cash in amount equal to the aggregate principal amount of the additional bonds applied for;

E. An opinion of counsel to the same effect as required by the provisions of paragraphs 4.b) and 4.c) of subdivision A. of Section 3.04 hereof; and

F. Documents evidencing the authorization by all governmental authorities, the consents of which are requisite to the legal issue of such bonds, in accordance with the opinion of counsel required to be filed pursuant to the provisions of subdivision E. of this Section 3.05.

Such cash shall be received and applied by the Trustee as a part of the trust estate. If within a period of five years after it is deposited any cash so deposited under the provisions of this Section 3.05 shall not have been withdrawn by the Company pursuant to the provisions of Article VIII hereof, such cash shall be applied forthwith by the Trustee, in the manner and upon the terms and conditions provided in Section 8.02 hereof, to the purchase or redemption of prior lien bonds or bonds as specified in an officers' certificate delivered by the Company to the Trustee in accordance with the provisions of said Section 8.02, or, in case of the failure of the Company to deliver such officers' certificate and in case such cash exceeds Fifty Thousand Dollars ($50,000), to the purchase or redemption of bonds then outstanding with the highest rate of interest payable at the time and which are redeemable in the case of redemption; provided, however, that the Trustee shall not apply to the purchase of any bonds or prior lien bonds an amount exceeding the applicable redemption price thereof prevailing at the time (if redeemable) and accrued interest, or, if not redeemable, an amount exceeding the principal amount thereof and accrued interest.

SECTION 3.06. ISSUE OF BONDS UPON RETIREMENT OF BONDS PREVIOUSLY OUTSTANDING HEREUNDER. From time to time hereafter the Company, in substitution for any bonds theretofore authenticated and delivered under any of the provisions of this Indenture and then or theretofore surrendered for conversion (if convertible) except into other bonds, or paid at maturity or upon redemption or purchased or otherwise surrendered to the Trustee, as the case may be, and cancelled, and in no such case theretofore bonded or theretofore made the basis for the issue of bonds of one denomination for bonds of another denomination of the same series in exchange therefor, or for the issue of coupon bonds in exchange for registered bonds without coupons, or for the issue of registered bonds without coupons in exchange for coupon bonds or upon the transfer of registered bonds without coupons, or for the issue of bonds in substitution for bonds mutilated, destroyed, lost or stolen, pursuant to the terms hereof or of any certified resolutions or any indenture supplemental hereto, may execute and deliver to the Trustee, and the Trustee shall thereupon authenticate and deliver to or upon the order of the Company, additional bonds for an aggregate principal amount equal to that of the bonds

in substitution for which such additional bonds are executed and delivered, but only upon receipt by the Trustee of:

A. A certified resolution authorizing the execution, and requesting the authentication and delivery, of such additional bonds in the principal amount therein specified, designating the series of such bonds and the certified resolution or the indenture supplemental hereto creating such series, specifying the series and the aggregate principal amount of the bonds in substitution for which additional bonds are to be authenticated and delivered, and naming the officer or officers of the Company to whom or upon whose order such additional bonds shall be delivered;

B. An officers' certificate stating in substance that the Company is not, to the knowledge of the signers, in default in the performance of any of the terms or covenants of this Indenture, and that all conditions precedent provided for in this Indenture relating to the authentication and delivery of the additional bonds applied for have been complied with;

C. An opinion of counsel to the same effect as required by the provisions of paragraphs 4.b) and 4.c) of subdivision A. of Section 3.04 hereof;

D. An accountant's certificate or an independent accountant's certificate, as the case may be, as to the same matters as are required to be stated pursuant to the provisions of subdivision C.5. of Section 3.03 hereof, but only if 1. such additional bonds bear interest at a higher rate per annum than the bonds in substitution for which such additional bonds are to be authenticated and delivered, provided that no such certificate need be filed when the Trustee is requested to authenticate and deliver additional bonds pursuant to the provisions of this Section 3.06 in substitution for bonds theretofore authenticated and delivered hereunder and which have been paid at maturity or redeemed or purchased by the Company within two years prior to the date of their maturity, or 2. additional bonds shall have been authenticated and delivered and an earnings certificate filed with the Trustee as a basis therefor pursuant to any provision of this Article III between the date of the cancellation of bonds in substitution for which additional bonds are applied for under this Section 3.06 and the date such additional bonds are so applied for;

E. An officers' certificate stating in substance that no part of the bonds in substitution for which additional bonds are to be authenticated and delivered has theretofore been bonded or made the basis for the issue of bonds of one denomination for bonds of another denomination of the same series in exchange therefor, or for the issue of coupon bonds in exchange for registered bonds without coupons, or for the issue of registered bonds without coupons in exchange for coupon bonds or upon the transfer of registered bonds without coupons, or for the issue of bonds in

substitution for bonds mutilated, destroyed, lost or stolen, pursuant to the terms of this Indenture or of any indenture supplemental hereto; and

F. Documents evidencing authorization by all governmental authorities, the consents of which are requisite to the legal issue of such bonds, in accordance with the opinion of counsel required to be filed pursuant to the provisions of subdivision C. of this Section 3.06.

Redeemed bonds shall be deemed to have been paid and cancelled within the meaning of this Section 3.06.

ARTICLE IV.

REDEMPTION OF BONDS.

SECTION 4.01. Unless otherwise provided as to a particular series of bonds, in case the Company shall desire to exercise the right to redeem all or any part of the bonds of a particular series, in accordance with the right reserved so to do, it shall give notice to the effect that the Company has elected to redeem all the bonds of such series or a part thereof, as the case may be, on a date therein designated, specifying in case of partial redemption the distinctive numbers and series of the bonds to be redeemed, and in every case stating that on said date there will become and be due and payable upon each bond so to be redeemed, at the principal office of the Trustee if such bonds are payable there and/or at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York, and/or at the office or agency of the Company in such other city or cities (if any) at which the principal of the bonds to be redeemed is payable, as may be provided in the bonds to be redeemed and/or the certified resolutions or the supplemental indenture creating such bonds, the redemption price thereof (or portion thereof in the case of the partial redemption of a registered bond without coupons) as specified in such bond, together with the accrued interest to such date, and that on and after such date interest thereon shall cease to accrue unless the redemption is not mandatory and the notice shall state that such notice is subject to the receipt of the redemption moneys by the Trustee on or before the date fixed for redemption and in such case such notice shall be of no effect unless such moneys are so received before such date. The redemption price may be expressed either in terms of a percentage of the principal amount of a bond or in terms of the principal amount thereof plus a designated premium, if any, thereon or as otherwise provided as to a particular series of bonds.

Such notice shall be given in such manner, at such times and in such places as shall be specified in the certified resolutions or supplemental indenture creating the bonds of such series.

In case the Company shall have elected to redeem less than all the outstanding bonds of any series it shall, in each such instance, at least ten days, unless the Trustee shall accept a shorter period, before the date upon which the first publication or mailing of the notice of redemption hereinbefore mentioned is to be made, notify the Trustee in writing of such election and of the aggregate principal amount of bonds of such series to be redeemed, and thereupon the Trustee shall select by such method as the Trustee shall deem fair and appropriate, subject to the provisions of the certified resolutions or supplemental indenture creating such bonds, the bonds to be redeemed, and shall within five days, unless the Company shall accept a longer period, after receiving the notice aforesaid notify the Company in writing of the numbers of the bonds so drawn. In any selection by lot each registered bond without coupons may be represented by a separate number for each amount of the lowest authorized denomination of its principal amount.

In the event that under the terms of any certified resolutions or supplemental indenture creating a series of bonds the Company or the Trustee shall be required to redeem less than all of the outstanding bonds of any series for any sinking fund or similar fund, the particular bonds to be redeemed shall be determined by the Trustee, which shall select such bonds by such method as the Trustee shall deem fair and appropriate, as in the case of redemption of bonds at the option of the Company unless the certified resolutions or supplemental indenture otherwise provides.

If on or before the redemption date specified in the notice above provided for, the Company shall deposit with the Trustee an amount of cash sufficient to effect the redemption of the bonds specified in such notice or direct the Trustee to set aside and apply to such purpose moneys then held by the Trustee hereunder which by the terms hereof are available for such purpose, then on and after the date of redemption designated in such notice (such deposit having been made, or moneys set aside, as aforesaid and being then available for such purpose to the extent not theretofore used therefor) no further interest shall accrue upon any of the bonds so to be redeemed (or, in the case of registered bonds without coupons, only a portion of the principal amount of which is to be redeemed, on such portion thereof); and anything in such bonds, or in the

coupons or in this Indenture to the contrary notwithstanding, any coupons for interest pertaining to any such bonds and maturing after such date shall become and be null and void.

All moneys deposited by the Company with the Trustee or set aside by the Trustee, as aforesaid, for the redemption of bonds, shall be held in trust for the account of the holders of the bonds to be redeemed.

Notice of redemption having been given as provided in the certified resolutions or supplemental indenture creating the bonds of the series to be redeemed and the redemption moneys having been received by the Trustee on or before the date fixed for redemption, the bonds so called, or the specified portions thereof, shall, on the date designated in such notice, become due and payable at the place or places of redemption specified in said certified resolutions or supplemental indenture and/or in said bonds, at their respective redemption prices payable on such date; and, upon the presentation and surrender thereof, with (in the case of coupon bonds) all interest coupons maturing subsequent to the redemption date, and (in the case of registered bonds or of coupon bonds which shall at the time be registered as to principal) accompanied, if the Company or the Trustee shall so require, by duly executed assignments or transfer powers, such bonds, or the specified portions thereof, shall be paid and redeemed out of the funds so deposited with, or set aside by, the Trustee, at their respective redemption prices then payable. If less than the whole principal amount of a registered bond without coupons shall be called for redemption and the redemption moneys so received by the Trustee, the Company shall execute and the Trustee shall authenticate and deliver, without charge, to the holder thereof, at his option either coupon bonds or registered bonds without coupons (but only of authorized denominations) for the unredeemed balance of the principal amount of the registered bond without coupons surrendered. However, in lieu of authenticating and delivering bonds for the unredeemed portion of the principal amount of any registered bond surrendered for partial redemption, the Trustee may make a notation thereon of the payment of the portion thereof called for partial redemption.

SECTION 4.02. The Company shall be entitled from time to time to surrender to the Trustee for cancellation any bonds held by it.

SECTION 4.03. All bonds redeemed at an office or agency of the Company and all matured coupons thereto appertaining shall be delivered by the Com-

pany to the Trustee for cancellation. All bonds and coupons redeemed or surrendered for cancellation under this Article IV shall be cancelled by the Trustee and shall be delivered to or upon the written order of the Company.

SECTION 4.04. Bonds and coupons for the payment or redemption of which moneys in sufficient amount to pay the principal, premium, if any, and accrued interest to date of maturity or redemption date, as the case may be, shall have been deposited with or set apart by the Trustee in trust for such purpose (whether upon or prior to the maturity or the redemption date of such bonds and whether such bonds are to be redeemed at the option of the Company or through any sinking fund or similar fund provided for in any certified resolutions or supplemental indenture) shall no longer be secured by, or be entitled to any lien or benefit of, this Indenture, nor shall the holders thereof have any further rights hereunder whatsoever, but shall have only the right to receive on the redemption or maturity date, and against surrender of their bonds (and coupons, if any) the principal thereof and premium, if any, and accrued interest thereon; provided, however, that if such bonds are to be redeemed prior to maturity thereof notice of such redemption shall have been given in such manner, at such times and in such place or places as shall be specified in the certified resolutions or supplemental indenture creating such bonds, or the Trustee shall have been irrevocably authorized by the Company to give or complete such notice.

SECTION 4.05. Unless otherwise provided as to a particular series of bonds, notice of intention to redeem to the registered owner of any bond registered as to principal and interest or as to principal only which is to be redeemed in whole or part shall be mailed by or on behalf of the Company, not less than thirty days before the date fixed for redemption, to him at his last address appearing upon the registry records.

SECTION 4.06. Failure duly to give such notice by publication and/or by mailing to the owner or holder of any bond designated for redemption in whole or part shall not affect the validity of the proceedings for the redemption of any other bond.

SECTION 4.07. Unless otherwise provided in the certified resolutions or the supplemental indenture creating the particular series of bonds, if at the time of publication or mailing of any notice of redemption the Company shall not have deposited with the Trustee and/or irrevocably directed the Trustee to

apply, from moneys held by it available to be used for the redemption of bonds, an amount in cash sufficient to redeem all of the bonds called for redemption, including accrued interest to such date fixed for redemption, such notice may state that it is subject to the receipt of the redemption moneys by the Trustee on or before the date fixed for redemption (unless such redemption is mandatory) and such notice shall be of no effect unless such moneys are so received on or before such date.

ARTICLE V.

COVENANTS.

SECTION 5.01. The Company covenants and agrees that it will promptly pay or cause to be paid the interest on, and principal of, and premium, if any, with respect to all bonds issued hereunder at the dates and places and in the manner and upon the terms specified in the bonds and the coupons thereto annexed, or in the certified resolutions or supplemental indenture under which such bonds are issued, according to the true intent and meaning thereof. The Company covenants that as coupons are paid they shall be cancelled and that coupons shall not be kept alive by the Company after maturity by purchase or extension or otherwise.

SECTION 5.02. The Company covenants and agrees that at all times, until the payment of the principal of and interest on all bonds issued hereunder, it will maintain an office or agency in the Borough of Manhattan, The City of New York, New York, where notices, requests and demands in respect of the bonds and coupons or under this Indenture may be served, and will, in writing, notify the Trustee of such office or agency. If no other office or agency is thus designated by the Company such notices, requests and demands may be served at the principal office of the Trustee.

SECTION 5.03. The Company covenants and agrees that on the date hereof it is lawfully seized and possessed of the trust estate, free and clear of liens or encumbrances, except as set forth in the granting and habendum clauses hereof, and excepting permissible encumbrances; that it has a good right and lawful authority to mortgage and pledge the trust estate as provided in this Indenture; provided, however, that nothing contained in this Indenture shall prevent the Company from hereafter acquiring any property subject to existing mortgages or other encumbrances thereon, including purchase money mort-

gages or liens created by the Company at the time of acquiring such property, and holding the same subject to such mortgages or other encumbrances.

SECTION 5.04. The Company covenants and agrees that it will hereafter, from time to time, whenever reasonably requested by the Trustees, make, do, execute, acknowledge and deliver, or cause to be made, done, executed, acknowledged and delivered, any and all such further and other acts, deeds, conveyances, transfers and assurances as may be necessary or proper for the better assuring and confirming unto the Trustees all or any part of the trust estate, whether now or hereafter owned or acquired by the Company, or to facilitate the execution of this trust or to secure the rights and remedies of the holders of the bonds issued hereunder.

SECTION 5.05. The Company covenants and agrees that it will cause this Indenture and any and all supplemental indentures and instruments of further assurance including all financing statements and continuation statements at all times to be kept, recorded and filed in such manner and in such places as may in the opinion of counsel be required by law in order to fully preserve and protect the rights of the bondholders and the Trustees hereunder, and that it will furnish to the Trustee:

A. promptly after the execution and delivery of this Indenture and of each supplemental indenture, an opinion of counsel stating that in the opinion of such counsel this Indenture or such supplemental indenture or notice in respect thereof has been properly recorded and filed so as to make effective the lien intended to be created thereby, and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to make such lien effective. It shall be a compliance with this subdivision A. if 1. the opinion of counsel herein required to be delivered to the Trustee shall state that this Indenture or such supplemental indenture or notice in respect thereof has been received for record or filing in each jurisdiction in which it is required to be recorded or filed and that, in the opinion of counsel (if such is the case), such receipt for record or filing makes effective the lien intended to be created by this Indenture or such supplemental indenture, and 2. such opinion is delivered to the Trustee within such time, following the date of the execution and delivery of this Indenture or such supplemental indenture, as shall be practicable having due regard to the number and distance of the jurisdictions in which this Indenture or such supplemental indenture or notice is required to be recorded or filed; and

B. on or before March 1 of each year, beginning with the year 1945, an opinion of counsel either stating that in the opinion of such counsel

such

action has been taken with respect to the recording, filing, re-recording and re-filing of this Indenture and each notice with respect thereto and of each supplemental indenture as is necessary to maintain the lien thereof, and reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to maintain such lien.

SECTION 5.06. The Company covenants and agrees that, except as in this Indenture otherwise permitted, at its own cost and expense, it will do or cause to be done all things on its part to be done necessary to preserve, extend and renew its corporate existence and will use its best efforts to preserve all rights, franchises and privileges necessary to the conduct of its business to it granted and on it conferred by law or otherwise in accordance with their terms, and will comply with the laws of any state wherein the Company may conduct its business and the laws of the United States of America.

SECTION 5.07. Except as Article VI hereof otherwise provides or except if the Company shall deliver an officers' certificate to the Trustee to the effect that such performance is not necessary for the protection of the lien hereof, the Company covenants and agrees that it will use its best efforts to perform or cause to be performed all the terms, covenants and conditions to be performed by the mortgagor under any prior lien; provided that nothing contained herein shall be construed to prevent the extension or renewal of any prior lien or any indebtedness secured thereby, including the principal of any outstanding prior lien bonds.

SECTION 5.08. The Company covenants and agrees that it will not issue or permit to be issued or outstanding any prior lien bonds secured by any prior lien in addition to the prior lien bonds secured by such prior lien deducted in connection with applications for the authentication and delivery of bonds, or for the withdrawal of cash, or for the reduction of cash, or for the release of property under this Indenture (in each case except prior lien bonds issued in lieu of lost, stolen, destroyed or mutilated bonds or in exchange for bonds of the same issue and series already outstanding), unless such additional prior lien bonds are forthwith deposited with the Trustee to be held subject to the provisions of Article VI hereof; provided that nothing contained herein shall be construed to prevent the Company from issuing new or additional bonds under any mortgage or other lien prior to the lien of this Indenture, which is permitted by Section 5.11 hereof and which does not constitute a prior lien as defined in Article I hereof, or to require such new or additional bonds to be deposited with the Trustee.

SECTION 5.09. A. The Company covenants and agrees that it will forthwith pledge and deposit with the Trustee, uncancelled, all prior lien bonds which may hereafter be acquired uncancelled by the Company, whether or not such prior lien bonds have theretofore become due and payable, unless the Company shall, pursuant to the terms of a prior lien, cancel such prior lien bonds or deliver or pledge them with the trustee or other holder of any prior lien. All such prior lien bonds deposited with the Trustee shall be received and held by the Trustee, as further security for the bonds issued hereunder, in the manner provided in Article VI hereof; provided, however, that any such prior lien bonds so deposited and pledged with the Trustee may, if not theretofore bonded, be made the basis, then or from time to time thereafter, for the authentication and delivery of bonds, the withdrawal or reduction of cash or the release of property to the extent, in the manner and subject to the conditions in this Indenture provided.

B. The Company covenants and agrees that, upon the satisfaction of any prior lien, all prior lien bonds secured by other prior liens, which are then held by the trustee or other holder of such satisfied prior lien, shall be cancelled or shall be delivered to the Trustee to be held subject to the provisions of Article VI hereof or to the trustee or other holder of the mortgage or other lien, securing such prior lien bonds or securing other prior lien bonds, to be cancelled or to be held in pledge or for the purpose of any sinking fund or analogous fund for the retirement of bonds for which provision may have been made in the instrument evidencing such mortgage or other lien; and that the Company will not obtain or apply for the authentication and delivery of any bonds under the provisions of Section 3.04 hereof, or the withdrawal of cash or the reduction of cash or the release of property under any provision of this Indenture, upon the basis of any prior lien bonds so cancelled or deposited with the Trustee pursuant to the provisions of this subdivision B.

C. The Company further covenants and agrees that all prior lien bonds, proceeds of property, considerations for property taken by the exercise of a power of eminent domain or purchased by a municipality in the exercise of any right, considerations for property released, proceeds of insurance, and moneys, in lieu of which, in each case, the Trustee shall have received a certificate that the same have been deposited with the trustee or other holder of a prior lien in pursuance of any provision of this Indenture, and which in each case are held by the trustee or other holder of a prior lien, at the time of the satisfaction of such prior lien, shall thereupon be paid or delivered to the

Trustee (to be held subject to the provisions of this Indenture as though origi- nally received by the Trustee) or to the trustee or other holder of a prior lien if required by the terms of such prior lien; and that the Company will not obtain any withdrawal of any such prior lien bonds or any such cash or any such proceeds or considerations from any such trustee or holder upon the basis of any prior lien bonds deposited with the Trustee pursuant to any provisions of this Indenture and theretofore bonded, except for the purpose of depositing such cash or proceeds or considerations so withdrawn with the Trustee hereunder; and that the Company will not apply for or obtain the authentication and delivery of any bonds under the provisions of Section 3.04 hereof, or the withdrawal of cash or the reduction of cash or the release of property under any provision of this Indenture, upon the basis of any prior lien bonds used to withdraw any such cash or proceeds or considerations from any such trustee or holder which are not deposited with the Trustee hereunder.

D. The Company further covenants and agrees that it will not apply for or obtain the release of any cash received or held by a trustee under any prior lien as required or permitted by the provisions of Article VII hereof except upon compliance with the terms of Section 8.05 hereof, unless such cash shall thereupon be deposited with the Trustee to be held and applied by it as though such cash had originally been deposited with the Trustee.

SECTION 5.10. The term "restricted property" as used in this Section 5.10 shall mean, as of any particular time, property additions theretofore bonded (but excluding therefrom property additions then or theretofore released from the lien hereof, or property additions retired which then or theretofore have been deducted in determining net property additions), which were in each case at the time of bonding thereof, and continue to be, subject to a prior lien.

The Company covenants and agrees that it will not apply for or obtain the authentication and delivery of any additional bonds or the withdrawal of any cash or the reduction of any cash or the release of any property under any provision of this Indenture, if, as a result of such authentication and delivery of bonds or withdrawal or reduction of cash or release of property, seventy per cent (70%) of the cost or fair value (whichever is less, as certified to the Trustee pursuant to any provision of this Indenture) of property additions then constituting restricted property would exceed fifteen per cent (15%) of the aggregate principal amount of A. all bonds then outstanding including the

bonds then to be authenticated and delivered and B. all prior lien bonds outstanding.

SECTION 5.11. The Company covenants and agrees that it will not hereafter create or suffer to be created or to accrue, any lien or charge of equal rank with, or having priority to, or preference over, the lien of this Indenture upon the trust estate or any part thereof, or upon the income and profits thereof, except permissible encumbrances and except any mortgage or other lien on any property acquired by the Company after the date of delivery of this Indenture which may exist at the date of the acquisition of such property by the Compa- ny, and except purchase money mortgages or liens created by the Company at the time of acquisition of such property; that it will not do or omit to do, or suffer to be done or omitted to be done, any matter or thing whatsoever whereby the lien of this Indenture or the priority of such lien or the indebtedness hereby secured, would be impaired; and that it will pay, or cause to be paid, or will make adequate provision for the satisfaction and discharge of, all lawful claims and demands for labor, materials, supplies or other purposes which, if unpaid, would by law be given precedence to, or an equality with, this Indenture as a lien or charge upon the trust estate or any part thereof or the income and profits thereof; provided, however, that nothing in this Indenture shall require the Company to pay, discharge or make provision for any lien, charge, claim or demand so long as it shall in good faith contest the validity thereof.

The Company covenants and agrees that in case it shall hereafter create any mortgage, other than indentures supplemental hereto, and other than purchase money mortgages created by the Company at the time of acquisition of property or indentures supplemental to a mortgage (not constituting a prior lien as defined in Article I hereof) existing at the time of acquisition on property acquired by the Company after the date of this Indenture, upon the trust estate or any part thereof, such mortgage shall be and shall be therein expressed (if in the opinion of counsel for the Company such expression is necessary to preserve the prior lien hereof) to be subject to the prior lien of this Indenture for the security of all bonds issued hereunder at the time outstanding and of all bonds which may thereafter be authenticated and delivered hereunder as in this Indenture provided and permitted.

SECTION 5.12. The Company covenants and agrees that it will, from time to time, promptly pay and discharge or cause to be paid and discharged all taxes,

assessments and other governmental charges, the lien whereof would be prior to the lien hereof, lawfully imposed upon the trust estate or any part thereof, or upon the income and profits thereof; and also all taxes, assessments and other governmental charges lawfully imposed upon the lien or interest of the Trustees under this Indenture in respect of the trust estate, so that the lien of this Indenture and the priority of such lien shall at all times be fully preserved without expense to the Trustees or the bondholders; provided, however, that nothing contained in this Indenture shall require the Company to pay or discharge any such tax, assessment or governmental charge, so long as it shall in good faith contest the validity thereof.

SECTION 5.13. The Company covenants and agrees that it will cause all the mortgaged property which is of a character usually insured by companies similarly situated to be kept insured to a reasonable amount against loss or damage by fire (which shall not be construed to include war damage insurance), either by means of policies issued by responsible insurance companies or, at the Company's election, by means of an adequate insurance fund set aside and maintained by the Company alone or maintained by the Company in conjunction with other companies through a trust or other agreement; any one loss in excess of the greater of four million dollars ($4,000,000) or two per cent (2%) of the aggregate principal amount of bonds outstanding hereunder on the date of such particular loss, to be made payable A. to the Trustee as its interest may appear or B. to the trustee or other holder of any prior lien (if required by the terms thereof) and to the Trustee, as their respective interests may appear; and in case of payment to any such trustee or other holder of any prior lien the Company shall furnish the Trustee with the certificate of such trustee or other holder that it has received such proceeds. The proceeds of any insurance which shall be received by the Trustee shall be applied by the Trustee as a part of the trust estate.

The Company covenants and agrees that it will at any and all times upon the written request of the Trustee, and in any event at least once in each calendar year on or before July 1, beginning with the year 1945, furnish to the Trustee an officers' certificate stating in substance that the Company has com- plied with all the terms and conditions of this Section 5.13 and containing a statement of all such policies of insurance and/or certificates issued under such trust or other agreement then outstanding and in force upon the aforesaid property or any part thereof, including the names of any insurance companies which have insured, the amounts of such insurance and the property covered

thereby, and a statement of the amount and character of any certificates issued under such trust or other agreement.

In case of any loss from fire in excess of the greater of four million dollars ($4,000,000) or two per cent (2%) of the aggregate principal amount of bonds outstanding hereunder on the date of such particular loss covered by any policy of insurance, any appraisement or adjustment of such loss and settlement and payment of indemnity therefor, which shall be approved in an officers' certificate, may be consented to and accepted by the Trustee. Subject to the provisions of Section 12.02 hereof, the Trustee shall in no way be liable or responsible for the collection of any insurance in case of any loss or for consenting to or accepting any such appraisement, adjustment, settlement or payment of indemnity.

So long as there are outstanding any bonds or obligations secured by a mortgage or other lien upon any part of the properties of the Company, prior to the lien of this Indenture, if a check for the amount of any loss covered by any insurance policy on any property subject to any such mortgage or other lien (as to whether such property is subject to such mortgage or other lien, the Trustee may, subject to the provisions of Section 12.02 hereof, rely upon an opinion of counsel) is drawn payable to the order of the Trustee hereunder and the trustee or other holder of such mortgage or lien, the Trustee hereunder shall, upon the written order of the Company, endorse said check without recourse and deliver the same to the trustee or other holder of any such mortgage or lien.

The Company covenants and agrees that it will cause all proceeds of any insurance payable directly to it to be applied to the repair and replacement of property damaged or destroyed, in respect of which the insurance proceeds were paid to the Company, or to the acquisition of permanent improvements, extensions, or additions to the mortgaged property or to the redemption of bonds outstanding hereunder or under a prior lien.

Anything in this Indenture to the contrary notwithstanding, the Company may have fire insurance policies with a deductible provision in a dollar amount per occurrence not exceeding the greater of five million dollars ($5,000,000) or three per cent (3%) of the aggregate principal amount of bonds outstanding hereunder on the date such policy goes into effect; provided, however, such dollar amount may be exceeded to the extent such dollar amount per

occurrence does not exceed the deductible amount in effect as to fire insurance on property of similar character insured by companies similarly situated and operating like property.

SECTION 5.14. The Company covenants and agrees that it will maintain, preserve and keep the mortgaged property in a state of good repair, working order and condition unless prevented from so doing by conditions beyond the control of the Company existing during time of war or other emergency.

SECTION 5.15. The Company covenants and agrees that it will duly and punctually keep, observe and perform each and every term, covenant and condition on its part to be kept, observed and performed, contained in this Indenture and in each and every indenture supplemental hereto which may be executed and delivered by the Company to the Trustees as provided or permitted by this Indenture.

SECTION 5.16. The Company covenants and agrees that, except in the manner and upon the terms in Articles VII and XIII hereof expressly authorized, it will not in any manner, whether by consolidation, merger, conveyance or otherwise, dispose of or lease the trust estate as a whole, or substantially as a whole.

SECTION 5.17. The Company covenants and agrees that:

A. At any and all reasonable times, upon the written request of the Trustee, the Company will permit the Trustee, by its agents and attorneys, to examine all the plants, properties, books of account, records, reports and other papers of the Company and to make copies and extracts therefrom;

B. The Company will file with the Trustees, within fifteen days after it is required to file the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents and other reports which the Company may be required to file with the Securities and Exchange Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (or copies of such portions thereof as may be prescribed by the Securities and Exchange Commission under
Section 314(a)(1) of the Trust Indenture Act of 1939); or, if the Company is not required to file with the Securities and Exchange Commission information, documents or reports pursuant to either Section 13 or Section 15(d) of the Securities Exchange Act of 1934, then the Company will file with the Trustees and will file with the Securities and Exchange Commission such of the supplementary and periodic information,

documents and reports required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as an obligor having an indenture qualified under the provisions of the Trust Indenture Act of 1939 shall then be required to furnish to the trustee under said indenture and to file with said Commission by any rules and regulations prescribed by said Commission under the provisions of Section 314(a)(l) of the Trust Indenture Act of 1939;

C. The Company will file with the Trustees and with the Securities and Exchange Commission, in accordance with the rules and regulations prescribed from time to time by said Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required by such rules and regulations, including, in the case of annual reports, if required by such rules and regulations, certificates or opinions of independent public accountants, as to compliance with conditions or covenants, compliance with which is subject to verification by accountants, but no such certificate or opinion shall be required as to
1. dates or periods not covered by annual reports required to be filed by the Company, in the case of conditions precedent which depend upon a state of facts as of a date or dates or for a period or periods different from that required to be covered by such annual reports, or 2. the amount and value of property additions (other than certificates or opinions of engineers as to the fair value to the Company of any property additions made the basis for the authentication and delivery of bonds, the withdrawal of cash from the Trustee, the reduction of cash required to be deposited with the Trustee, or the release of any portion of the trust estate, which are required to be filed with the Trustee by the provisions of Articles III, VII or VIII hereof), or 3. the adequacy of depreciation, maintenance or repairs;

D. The Company will transmit to the bondholders, in the manner and to the extent provided in subdivision C. of Section 12.10 hereof, such summaries of any information, documents and reports required to be filed with the Trustees pursuant to the provisions of subdivisions B. and C. of this Section 5.17 as may be required by the rules and regulations of the Securities and Exchange Commission under the provisions of Section 314(a)(3) of the Trust Indenture Act of 1939; and

E. The Company will furnish or cause to be furnished to the Trustee between 1. April 15 and April 30 and 2. October 15 and October 31, in each year beginning with October, 1944, and at such other times as the Trustee may request in writing, all information in the possession or control of the Company, or of any paying agent for the bonds, as to the

names and addresses of the bondholders as of a date not more than fifteen days prior to the date on which such information shall be furnished to the Trustee; provided, however, that the Company need not furnish or cause to be furnished any such list with respect to registered bonds with respect to which the Trustee maintains the records for the registration and transfer of bonds.

SECTION 5.18. Upon default of the Company so to do, the Trustees may in their discretion, and if requested in writing by a majority of the bondholders and provided with the amount of cash necessary therefor shall, make any payment which the Company by any of the provisions of this Indenture agrees to make, and the Company covenants and agrees that it will forthwith repay to the Trustees all moneys which the Trustees shall so pay, and will pay interest thereon from the date of such payment by the Trustees until the repayment thereof, at the prime rate prevailing from time to time of the Trustee, and if any moneys so paid by the Trustees shall have been furnished to the Trustees by any of the bondholders, the Trustees shall, out of any amount repaid to them by the Company, or recovered out of the trust estate on account of such advance or payment, make ratable payment to the bondholders who shall have provided such moneys, or upon their order. No such payment shall be deemed to relieve the Company from any default hereunder.

SECTION 5.19. The Company covenants and agrees that it will cause any paying agent, other than the Trustee, which it may appoint, to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 5.19,

A. that it will hold all sums held by it as such agent for the payment of principal of and premium, if any, or interest on any of the bonds in trust for the benefit of the holders of such bonds or of the coupons for such interest, as the case may be;

B. that it will give the Trustee notice of any failure of the Company to make any payment of the principal of and premium, if any, or interest on the bonds when the same shall be due and payable; and

C. that at any time during the continuation of any such failure of the Company to make any payment of the principal of and premium, if any, or interest on the bonds when the same shall be due and payable, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held by such paying agent.

The Company covenants and agrees that, if it should at any time act as its own paying agent, it will, on or before each due date of the principal of, and premium, if any, or interest on, any of the bonds, set aside and segregate and hold in trust for the benefit of the holders of such bonds or of the coupons for such interest, as the case may be, a sum sufficient to pay such principal and premium, if any, or interest so becoming due, and will notify the Trustee of any failure to take such action.

Anything in this Section 5.19 to the contrary notwithstanding, the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by it or any paying agent as required by this Section 5.19, such sums to be held by the Trustee upon the trusts hereinabove in this
Section 5.19 referred to.

ARTICLE VI.
CONCERNING SECURITIES PLEDGED OR MORTGAGED.

SECTION 6.01. All prior lien bonds received uncancelled by the Trustee and all other securities received by the Trustee, pursuant to any of the provisions of this Indenture or of any indenture supplemental hereto, shall be held by the Trustee subject to the provisions of this Indenture and of any such supplemental indenture for the further security of the bonds issued hereunder.

All prior lien bonds in coupon form received uncancelled by the Trustee shall have all unmatured coupons attached when so received unless accompanied by evidence satisfactory to the Trustee that the discharge of any mortgage or other lien securing the same may be obtained without the production of any coupon or coupons that may be missing. All prior lien bonds received uncancelled by the Trustee hereunder shall be stamped by the Trustee with the following words:

"Not negotiable; held in trust under the provisions of the Indenture of Michigan Consolidated Gas Company to City Bank Farmers Trust Company (Citibank, N.A., successor) and Ralph E. Morton (Robert T. Kirchner, successor), Trustees, dated as of March 1, 1944."

All prior lien bonds or other securities received uncancelled by the Trustee shall be in bearer form or, if in registered form, shall be accompanied by appropriate instruments of transfer to the Trustee, and shall otherwise be in

transferable form and shall bear such stamps, if any, as may be required by law. The Trustee may from time to time cause prior lien bonds or any other securities received by it to be registered in its name, or in the name of its nominee.

SECTION 6.02. So long as the Company is not in default hereunder to the knowledge of the Trustees and there shall not have occurred and be continuing any event of default, no payment by way of principal, interest or otherwise on any prior lien bonds held by the Trustee shall be made or demanded, and all coupons thereto appertaining, as they mature, shall be cancelled by the Trustee and delivered so cancelled to the Company, except that, in case default is made in the payment of interest on or principal of any of the prior lien bonds undeposited and outstanding, the coupons appertaining to any prior lien bonds held subject to this Indenture of the same issue as the prior lien bonds upon which such default shall have been made, shall not be cancelled, and the Trustee may demand and enforce payment of all sums due, whether for for prior lien bonds of such issue by the mortgage or other instrument securing the same, and all prior lien bonds of such issue then held by it shall be enforceable ratably and equally with all other prior lien bonds of such issue not deposited with the Trustee; but all interest maturing upon any bonds of such issue then held by it prior to any such default shall be deemed to have been paid and satisfied. Subject to the provisions of this Indenture, the Trustee is expressly empowered to exercise, enforce or waive any of the rights and powers which it may possess as holder of any prior lien bonds held by it in pledge hereunder.

The Company agrees that, except as permitted by Article XIII hereof, it will not sell, assign or transfer any coupon or right to interest delivered or assigned to it in respect of any prior lien bonds pledged hereunder, and will not, without the consent of the Trustee, collect any coupons or interest or any other claim or judgment in respect of such prior lien bonds by legal proceedings or by enforcement of any security therefor or in any other manner which the Trustee shall deem prejudicial to the trusts hereby created; and, until actually paid, released or discharged, every coupon or right to interest and all other claims in respect of any such prior lien bonds shall remain subject to the lien hereof.

All funds received by the Trustee pursuant to the provisions of this
Section 6.02 shall be held by the Trustee as part of the trust estate.

SECTION 6.03. So long as the Company is not in default hereunder to the knowledge of the Trustees and there shall not have occurred and be continuing any event of default, the Trustee, if so directed by an officers' certificate, shall surrender any of the prior lien bonds held by it in pledge hereunder to the trustee of the mortgage or other holder of the lien securing such prior lien bonds for cancellation or to be held uncancelled for the purposes of any sinking fund or analogous fund for the retirement of bonds for which provision may have been made in the instrument evidencing the mortgage or other lien securing the prior lien bonds so surrendered, subject to the provisions of Section 5.09 hereof, but prior lien bonds shall not be so surrendered, except for cancellation, unless the Trustee shall have received an opinion of counsel to the effect that the Company has made effective provision, either in the instrument evidencing the mortgage or other lien securing such prior lien bonds or otherwise, so that no transfer of ownership or possession of such bonds by the trustee or other holder of such mortgage or other lien is permissible except to the Trustee or to the trustee or other holder of the mortgage or other lien securing other prior lien bonds for cancellation or to be held uncancelled under the terms of such mortgage or other lien and, upon cancellation of such mortgage or other lien, to the Trustee.

Whenever all outstanding prior lien bonds of a particular issue (except any lost, stolen or destroyed bonds as to which the Trustee shall have received the certificate of the trustee or other holder of the mortgage or other instruments securing such bonds to the effect that satisfactory indemnity has been given to it) shall have been deposited with the Trustee and/or shall be held by the Trustee under any provision of this Indenture and/or by the trustee or other holder of the mortgage or other lien securing the same (or provision for their payment is made which is satisfactory to the trustee of such prior lien and to the Trustee), the Trustee shall cancel or cause to be cancelled all prior lien bonds of such issue so deposited with or held by it (if not previously cancelled) and shall deliver the same so cancelled to the trustee or other holder of the prior lien and such mortgage or prior lien shall be discharged of record, but such bonds shall be cancelled and delivered and such mortgage or prior lien shall be discharged of record only at the request of the Company evidenced by an officers' certificate and upon the receipt by the Trustee of an opinion of counsel to the effect A. that all the property then subject to such mortgage or

other lien, insofar as the same is of the character covered by this Indenture, has been subjected to the lien of this Indenture, and B. that there are no liens or encumbrances on such property junior to the lien of the mortgage or other instrument securing such prior lien bonds which are prior to the lien of this Indenture, excepting permissible encumbrances.

SECTION 6.04. All purchase money obligations and all bonds or other obligations issued by a municipal corporation or other governmental subdivision which shall be received by the Trustee pursuant to the provisions of paragraphs
a) and b) of subdivision A.3. of Section 7.03 hereof or pursuant to the provisions of subdivision E. of Section 7.04 hereof, shall be held and collected by the Trustee. Interest received by the Trustee on such obligations shall, so long as the Company is not in default hereunder to the knowledge of the Trustees and there shall not have occurred and be continuing any event of default, be paid over to the Company. Ail moneys received by the Trustee with respect to principal of such obligations shall be held and applied by the Trustee as a part of the trust estate. All such obligations held by the Trustee may be released pursuant to the provisions of Article VII hereof. The Trustee may exercise any and all rights of a holder of all such purchase money obligations and bonds and other obligations, and may take such action as shall be desirable or necessary to avail of the security created therefor, including, without limiting the generality of the foregoing, the joining in any plan of voluntary or involuntary reorganization or a readjustment or rearrangement of any such purchase money obligations or bonds or other obligations, and the acceptance of new obligations or securities issued in exchange therefor under any such plan and the extension or modification of any of the terms of said purchase money obligations or bonds or other obligations or of any instrument securing the same.

SECTION 6.05. In case the Trustee is authorized by the provisions of this Indenture to exercise all the rights of a holder of any securities pledged hereunder, the Trustee shall be deemed, to the exclusion of the Company, to be the sole holder and owner thereof, but, so long as the Company is not in default hereunder to the knowledge of the Trustees and there shall not have occurred and be continuing any event of default, any discretionary action which the Trustee may be entitled to take in connection with any security pledged hereunder shall be taken by the Trustee in accordance with the written request of the Company. If and so long as the Company shall be in default hereunder to the knowledge of the Trustees, or if an event of default has

occurred and is continuing, the Trustee shall take any such action in its own absolute and uncontrolled discretion and may in such event consult with an engineer or engineers or other expert or experts, and the reasonable expense of such consultation shall be paid by the Company.

ARTICLE VII.
POSSESSION, USE, RELEASE AND TRANSFER OF PROPERTY.

SECTION 7.01. Unless an event of default shall have occurred and be continuing, the Company shall be entitled to possess, use and enjoy all the property and appurtenances, franchises and rights conveyed by this Indenture (other than such securities, obligations and moneys as are expressly required to be deposited with the Trustee), and to receive, use and dispose of, free from the lien of this Indenture, the rents, revenues, issues, earnings, income, products and profits thereof (except as stated in Article VI hereof), with power in the ordinary course of business, freely and without let or hindrance on the part of the Trustees or either of them or of the bondholders, to use and consume materials and supplies, deal with choses in action, deal with, modify and cancel contracts and exercise the rights and powers conferred upon it thereby, alter, repair, dismantle, change the position of and remove any of its property, and replace and renew any of its property.

SECTION 7.02. So long as the Company shall remain in possession of the trust estate, the Company may at any time and from time to time, in its discretion, without any release from, action by, or notice to, the Trustees:

A. Sell, exchange or otherwise dispose of free from the lien of this Indenture 1. any of its equipment, machinery, fixtures, apparatus, pipes, poles, wire, appliances, tools, implements, furniture or other chattels at any time subject to the lien hereof, which may have become worn out, obsolete, inadequate, unserviceable, undesirable or unnecessary for use in the conduct of its business, replacing the same by, or substituting for the same, other property of equal value to the Company, which shall forthwith become, without further action, subject to the lien of this Indenture, and 2. any materials, merchandise, equipment and supplies in the ordinary course and conduct of its business;

B. Surrender, cancel, abandon or make changes, alterations or modifications in or substitutions of any and all right-of-way grants, easements or leaseholds, if any, subject to the lien hereof; and

C. Surrender, cancel, abandon or assent to the change, alteration or modification of any easement, right-of-way, or any other right, power, franchise, license, governmental consent or permit under which it may be

operating, provided that any such surrender or modification which affects the trust estate is necessary or desirable in the conduct of the business of the Company.

SECTION 7.03. A. So long as the Company is not in default hereunder to the knowledge of the Trustees and there shall not have occurred and be continuing any event of default, the Company may at any time and from time to time obtain the release of, and the Trustees shall release from the lien hereof, any property or franchises constituting a part of the mortgaged property, except prior lien bonds, but only upon receipt by the Trustee of:

1. An officers' certificate stating: that the Company has sold, leased, granted an interest in, surrendered or disposed of, or intends to sell, lease, grant an interest in, surrender or dispose of, certain property and the consideration, if any, received or to be received therefor, a request for the release thereof from the lien of this Indenture, and whether or not the property to be released has heretofore been bonded; that the Company is not, to the knowledge of the signers, in default in the performance of any of the other terms or covenants of this Indenture, that the Company is not and, upon the granting of the application then being made, will not be in default in the performance of the covenant contained in Section 5.10 hereof; and that in the opinion of the signers such release is desirable in the conduct of the business of the Company and all conditions precedent provided for in this Indenture relating to the release of the property in question have been complied with;

2.a) An engineer's certificate stating, in the opinion of the signers, the then fair value and the cost (or as to property additions constituting bonded property of which the fair value to the Company at the time the same became bonded was less than the cost as determined pursuant to Article I hereof, then such fair value in lieu of cost) of the property to be released (which property shall be described in such certificate in reasonable detail) without deduction for any liens on such property; and that in the opinion of the signers such release will not impair the security under this Indenture in contravention of the provisions of this Indenture; and

b) In case the fair value of such property to be released and of all other property released from the lien of this Indenture since the commencement of the then current calendar year, as shown by certificates filed pursuant to this Article VII, is ten per cent (10%) or more of the aggregate principal amount of bonds outstanding at the time of the application then being made, an independent engineer's certificate stating in substance:

(1) The then fair value and the cost (or as to property additions constituting bonded property of which the fair value to the Company

at the time the same became bonded was less than the cost as determined pursuant to Article I hereof, then such fair value in lieu of cost), in the opinion of the signer, of the property to be released, without deduction for any liens on such property; and

(2) That such release, in the opinion of the signer, will not impair the security under this Indenture in contravention of the terms of this Indenture;

provided, however, that no independent engineer's certificate need be delivered to the Trustee in the case of any release of property if the fair value thereof, as shown by the certificate filed pursuant to paragraph a) of this subdivision 2., is less than twenty-five thousand dollars ($25,000) or less than one per cent (1%) of the aggregate principal amount of bonds at the time outstanding;

3. Cash, which shall be received and applied by the Trustee as a part of the trust estate, in an amount equal to the cost of the property to be released (or as to property additions constituting bonded property of which the fair value to the Company at the time the same became bonded was less than the cost as determined pursuant to Article I hereof, then such fair value in lieu of cost) as specified in said engineer's certificate, or, if an independent engineer's certificate is required, then as specified therein, which amount of cash shall, at the election of the Company, be reduced by:

a) An amount equal to the fair value of obligations secured by purchase money mortgage on the property to be released deposited with the Trustee (which obligations shall constitute all of such obligations secured by such mortgage and the principal amount of which obligations shall not (1) exceed seventy per cent (70%) of the fair value of the property to be released as specified in the engineer's certificate or, if required, the independent engineer's certificate, or (2) together with the principal amount of all other purchase money obligations which shall have been used to reduce the amount of cash required to be deposited under the provisions of this
Section 7.03 and are then held as a part of the trust estate, exceed fifteen per cent (15%) of the aggregate principal amount of bonds at the time outstanding under this Indenture), but only upon receipt by the Trustee of:

(i) An opinion of counsel to the effect that such obligations are valid obligations and that any purchase money mortgage securing the same is sufficient to constitute a valid purchase money lien upon the property to be released subject to no liens other than the liens, if any, existing on such property immediately prior to its release;

(ii) An appraiser's certificate stating the fair value to the Company of such obligations;

(iii) If the fair value to the Company of such obligations and of all other securities made the basis of any release from the lien of this Indenture since the commencement of the then current calendar year, as shown by certificates filed pursuant to subparagraphs (ii) or (iii) of this paragraph a) or pursuant to subparagraph (1) or (2) of paragraph b) of this subdivision 3., or pursuant to subdivision F. of Section 7.04 hereof, is ten per cent (10%) or more of the aggregate principal amount of bonds outstanding at the time of the application then being made, an independent appraiser's certificate, stating the fair value to the Company of such obligations; provided, however, that no independent appraiser's certificate need be filed with the Trustee with respect to any such obligations if the fair value thereof to the Company, as shown by the certificate required by subparagraph (ii) of this paragraph a), is less than twenty-five thousand dollars ($25,000) or less than one per cent (1%) of the aggregate principal amount of bonds outstanding at the time of the application then being made; and/or

b) An amount equal to the fair value of bonds or other interest-bearing obligations, issued pursuant to law, in whole or in part payment for the property to be released, by any municipal corporation or other governmental subdivision (the principal amount of which, together with the principal amount of all other such obligations which shall have been used to reduce the amount of cash required to be deposited under the provisions of this Section 7.03 and are then held as part of the trust estate, shall not exceed fifteen per cent (15%) of the aggregate principal amount of bonds at the time outstanding under this Indenture) which shall be deposited with the Trustee, but only upon receipt by the Trustee of:

(1) An appraiser's certificate stating the fair value to the Company of such bonds or other interest-bearing obligations;

(2) If the fair value to the Company of such obligations and of all other securities made the basis of any release from the lien of this Indenture since the commencement of the then current calendar year, as shown by certificates filed pursuant to subparagraph (1) or (2) of this paragraph b) or pursuant to

subparagraph (ii) or (iii) of paragraph a) of this subdivision
3., or pursuant to subdivision F. of Section 7.04 hereof, is ten per cent (10%) or more of the aggregate principal amount of bonds outstanding at the time of the application then being made, an independent appraiser's certificate, stating the fair value to the Company of such obligations; provided, however, that no independent appraiser's certificate need be filed with the Trustee with respect to any such obligations if the fair value thereof to the Company, as shown by the certificate required by subparagraph (1) of this paragraph b), is less than twenty-five thousand dollars ($25,OOO) or less than one per cent (1%) of the aggregate principal amount of bonds outstanding at the time of the application then being made; and

(3) An opinion of counsel to the effect that such bonds or other interest-bearing obligations have been issued pursuant to law in whole or in part payment for the property to be released, and either (i) that such municipal corporation or other governmental subdivision possesses taxing power and that such bonds or other interest-bearing obligations are direct and general obligations of such municipal corporation or other governmental subdivision, or (ii) that the interest on and principal of such bonds or other interest-bearing obligations are payable from and secured by a valid lien on the revenues derived from the operation of that part of the property to be released which is or has been purchased by such municipal corporation or other governmental subdivision and such bonds or other interest-bearing obligations are rated by at least one nationally recognized statistical rating organization (as that term is used in Rule 15~3-l(c)(2)(vi)(F) under the Securities Exchange Act of 1934) in one of its generic rating categories which signifies investment grade (typically, the four highest rating categories, within which there may be sub-categories or gradations indicating relative standing, signifying investment grade); and/ or

c) An amount equal to the amount of net property additions not theretofore bonded, but only upon receipt by the Trustee of the certificates, instruments and opinions of the kind prescribed in, and setting forth the facts with respect to such net property additions specified in subdivisions 2., 3., 4., 6., 7.a), b) and e), and 8.a) through g), of subdivision C. of Section 3.03 hereof; and provided further that in case such net property additions are subject to a prior lien there

shall be deducted from the amount thereof, an amount equal to 10/7ths of the principal amount of the then outstanding prior lien bonds secured by such prior lien and not theretofore deducted in connection with any application under this Indenture for the authentication and delivery of bonds, the withdrawal of cash, the reduction of cash or the release of property; and/or

d) An amount equal to 10/7ths of the principal amount of prior lien bonds deposited with the Trustee or paid or purchased or reduced or ascertained by judicial determination to be invalid, and in no case theretofore bonded, but only upon receipt by the Trustee, of (1) prior lien bonds as prescribed in subdivision A.2.a) of Section 3.04 hereof or a certificate and opinion of the kind and setting forth the facts prescribed in subdivision A.2.b) of said Section 3.04, (2) a certificate of the kind and setting forth the facts prescribed in subdivision A.3. and (3) an opinion of counsel of the kind prescribed by subdivision A.4.a) of said
Section 3.04 to the extent applicable; and/or

e) An amount equal to 10/7ths of the principal amount of bonds, then or theretofore surrendered for conversion (if convertible) except into other bonds, or paid at maturity or upon redemption or purchased or otherwise surrendered to the Trustee and cancelled, and in no such case theretofore bonded or made the basis for the issue of bonds of one denomination for bonds of another denomination of the same series in exchange therefor, or for the issue of coupon bonds in exchange for registered bonds without coupons, or for the issue of registered bonds without coupons in exchange for coupon bonds or upon the transfer of registered bonds without coupons, or for the issue of bonds in substitution for bonds mutilated, destroyed, lost or stolen, pursuant to the terms hereof or of any certified resolutions or indenture supplemental hereto; and/or

f) An amount equal to 10/7ths of the principal sum secured by any lien prior to the lien hereof, which is a lien solely on the property to be released; provided that there shall be filed with the Trustee an opinion of counsel stating the principal sum secured by such lien and that such lien is a lien solely on the property to be released; and

4. An opinion of counsel to the effect that all conditions precedent provided for in this Indenture relating to the release of the property in question have been complied with and, in the case the Trustees are

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requested to release any franchise, that such release will not impair to any material extent the right of the Company to operate any of its remaining properties; and stating, in the opinion of such counsel, whether or not any portion of such property is subject to any lien prior to the lien of this Indenture, excepting permissable encumbrances, and, if so, such lien or liens shall be specified.

B. Redeemed prior lien bonds shall be deemed to have been paid and cancelled within the meaning of subdivision A.3. of this Section 7.03.

C. If the property to be released is subject to any prior hen or to any other lien prior hereto, and if the property to be released is to be simultaneously released from such lien and if the consideration for the property to be released is required by the provisions of such lien to be paid over to the trustee or other holder of such lien (as to which facts the Trustee may rely, subject to the provisions of Section 12.02 hereof, upon an opinion of counsel), the certificate of the trustee or other holder of such lien that it has received the consideration for the property to be released shall be accepted by the Trustee hereunder to the extent of such consideration so received by such other trustee or other holder (as the value of such consideration shall be specified in such certificate) in lieu of cash, obligations, certificates, bonds or net property additions required by the provisions of subdivision A.3. of this
Section 7.03 to be delivered or certified to the Trustee upon the release of said property.

SECTION 7.04. So long as the Company is not in default hereunder to the knowledge of the Trustees and there shall not have occurred and be continuing , any event of default, the Company may at any time and from time to time sell, lease, grant an interest in, surrender or otherwise dispose of any property (except prior lien bonds) constituting a part of the mortgaged property of an aggregate fair value (without deduction for any liens thereon) of not in excess of the greater of three per cent (3%) of the aggregate principal amount of the bonds at the time outstanding or one hundred thousand dollars ($100,000) in any one calendar year, as shown by engineer's certificates filed pursuant to subdivision C. of this Section 7.04, and the Trustees, without requiring compliance with any other section of this Article VII, shall release such property from the lien hereof, provided that such fair value of the property involved in any one release as shown on such engineer's certificate is less than
- . twenty-five thousand dollars ($25,000) or less than one per cent (1%) of the aggregate principal amount of bonds at the time outstanding; but only upon receipt by the Trustee of:

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A. An officers' certificate (which may be combined with the officers' certificate referred to in subdivision B. of this Section 7.04) requesting the release of the property in question;

B. An officers' certificate briefly describing the property to be released and stating in substance:

1. That the Company has sold, leased, granted an interest in, surrendered or disposed of, or contracted to sell, lease, grant an interest in, surrender or dispose of, certain property and stating the consideration, if any, received or to be received by the Company therefor, which shall be cash or purchase money obligations (as defined and subject to the limitations and conditions provided in subdivision A.3.a) of Section 7.03 hereof);

2. That the fair value of the property to be released as shown in the engineer's certificate referred to in subdivision C. of this
Section 7.04, together with the fair value, as shown by such engineer's certificates, of all other property released under the terms of this Section 7.04 during the then current calendar year, does not exceed the greater of three per cent (3%) of the aggregate principal amount of the bonds at the time outstanding or one hundred thousand dollars ($100,000); and

3. That the Company is not to the knowledge of the signers in default under this Indenture and that in the opinion of the signers all conditions precedent provided for in this Indenture relating to the release of such property have been complied with;

C. An engineer's certificate stating in the opinion of the signers the then fair value of the property to be released (without deduction for any liens on such property), and that the release thereof will not impair the security under this Indenture in contravention of the provisions of this Indenture;

D. An opinion of counsel stating that all conditions precedent provided for in this Indenture relating to the release of such property have been complied with;

E. The cash and/or purchase money obligations, if any, received by the Company upon the sale or other disposition of such property; and

F. An appraiser's certificate stating the fair value of any purchase money obligations so delivered to the Trustee.

If the property to be released is subject to any prior lien or to any other lien prior hereto and said property is to be simultaneously released from such lien, and if the consideration for the property to be released is required by the

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provisions of such lien to be paid over to the trustee or other holder of such lien (as to which facts the Trustee may rely, subject to the provisions of
Section 12.02 hereof, upon an opinion of counsel), the certificate of the trustee or the other holder of such lien that it has received the consideration for the property to be released shall be accepted by the Trustee hereunder to the extent of such consideration so received by such other trustee or other holder in lieu of cash and/or purchase money obligations required by the provisions of subdivision E. of this Section 7.04 to be delivered to the Trustee upon the release of said property.

All cash received by the Trustee pursuant to the provisions of this
Section 7.04 shall be held and dealt with by the Trustee as a part of the trust estate, and all purchase money obligations so received shall be held and dealt with as provided in Article VI hereof.

SECTION 7.05. Should any part of the trust estate be taken by the exercise of a power of eminent domain or be required to be disposed of by any public authority having jurisdiction to require such disposition (including the Securities and Exchange Commission or other regulatory body administering the Public Utility Holding Company Act of 1935), whether upon order directed against the Company or upon application of the Company in compliance with any existing law requiring such disposition, if in the condemnation proceeding or proceeding requiring or approving such disposition the fair value of such property is determined or approved by a court, or by such public authority, or by any agency thereof, having in each case (in the opinion of counsel) jurisdiction to make such determination or give such approval, the Trustees shall accept the fair value so determined or approved (without requiring any engineer's certificate or independent engineer's certificate as to such fair value) as representing the then fair value of such property. Should any municipality or public authority at any time exercise any right which it may have to purchase any part of the trust estate at a price specified in or determined in accordance with the provisions of right of purchase, the Trustees shall accept the price so specified or determined as representing the then fair value of such property. In any such case, when the Company by an officers' certificate shall so request, the Trustees shall execute and deliver a release of the property so taken or purchased or disposed of upon the conditions set forth in this Section 7.05, and shall, subject to the provisions of Section 12.02 hereof, be fully protected in so doing upon being furnished with an opinion of counsel to the effect that such property has been taken by

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the exercise of the power of eminent domain or has been disposed of under the requirements of any public authority having jurisdiction to require such disposition or has been purchased by a municipality or public authority in the exercise of a right which it shall have to purchase such property. In any such proceedings the Trustees may be represented by counsel, who may or may not be of counsel to the Company. The proceeds of all property so taken, disposed of or purchased shall be paid over either to the Trustee hereunder to be held as part of the trust estate and applied pursuant to Article VIII hereof, or, if required by the terms thereof (as to which the Trustee may rely, subject to the provisions of Section 12.02 hereof, upon an opinion of counsel), to the trustee or other holder of any prior lien or any other lien prior hereto, in which case the Company shall furnish the Trustee with the certificate of such trustee or other holder that it has received such proceeds.

SECTION 7.06. In no event shall any purchaser in good faith of any property purported to be released hereunder be bound to ascertain the authority of the Trustees to execute the release or be bound to inquire as to any facts required by the provisions hereof for the exercise of such authority, or be bound to see to the application of the purchase moneys; nor shall any purchaser or grantee of any property or rights permitted by this Article VII to be sold, granted, exchanged or otherwise disposed of, be under obligation to ascertain or inquire into the authority of the Company to make any such sale, grant, exchange or other disposition, or be bound to see to the application of any consideration paid to the Company.

SECTION 7.07. In case the trust estate shall be in the possession of a receiver or a trustee in bankruptcy lawfully appointed, or of an assignee for the benefit of creditors, the powers in and by this Article VII conferred upon the Company may be exercised by such receiver, trustee or assignee, with the approval of the Trustee, regardless of whether or not the Company is in default hereunder, and in such event a writing signed by such receiver, trustee or assignee, may be received by the Trustee in lieu of any certified resolution required by the provisions of this Article VII, and such receiver, trustee or assignee may make any certificate required by the provisions of this Article VII to be made by an officer or officers of the Company, and if the Trustees hereunder or either of them shall be in possession of the trust estate under any provision of this Indenture, then all the powers by this Article VII conferred upon the Company may be exercised by the Trustees, or that one of them in possession, as the case may be, in their, its or his discretion.

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The Trustees shall not be required under any of the provisions of this Article VII to release at the request of the Company any part of the mortgaged property from the lien hereof at any time when the Company shall be in default to the knowledge of the Trustees in the performance of any covenant or agreement in the bonds or in this Indenture contained, or when an event of default shall have occurred and be continuing, but notwithstanding any such default or event of default, the Trustees may release from the lien hereof any part of the mortgaged property, upon compliance with the conditions, other than those relating to the non-existence of a default, specified in this Article VII in respect thereof, if the Trustee in its discretion shall deem such release for the best interest of the bondholders.

SECTION 7.08. So long as the Company is not in default hereunder to the knowledge of the Trustees and there shall not have occurred and be continuing any event of default, the Company may at any time and from time to time sell, lease, surrender or otherwise dispose of any property or franchises (other than bonded property) constituting a part of the mortgaged property, or grant an interest in such property or franchises (other than bonded property), except prior lien bonds, and obtain the release of, and the Trustees shall release from the lien hereof, such property, but only upon receipt by the Trustee of (in lieu of complying with the requirements of Section 7.03 hereof):

A. An officers' certificate stating that the Company has sold, leased, granted an interest in, surrendered or disposed of, or intends to sell, lease, grant an interest in, surrender, or dispose of, certain property that is not bonded property and stating the consideration, if any, received or to be received therefor, and requesting the release thereof from the lien of this Indenture; and stating that such property has not theretofore been bonded; that such release is in the opinion of the signers desirable in the conduct of the business of the Company; and that the Company is not, to the knowledge of the signers, in default in the performance of any of the terms or covenants of this Indenture; and that in the opinion of the signers all conditions precedent provided for in this Indenture relating to the release of the property in question have been complied with;

B.1. An engineer's certificate stating, in the opinion of the signers, the then fair value of the property to be released (which property shall be described in such certificate in reasonable detail) without deduction for any liens on such property; and stating that, in the opinion of the signers, such release will not impair the security under this Indenture in contravention of the provisions of this Indenture;

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2. In the case the fair value of such property to be released and of all other property released from the lien of this Indenture since the commencement of the then current calendar year, as shown by certificates filed pursuant to Article VII hereof, is ten per cent (10%) or more of the aggregate principal amount of bonds outstanding at the time of the application then being made, an independent engineer's certificate stating in substance:

a) The then fair value, in the opinion of the signer, of the property to be released, without deduction for any lien on such property; and

b) That such release, in the opinion of the signer, will not impair the security under this Indenture in contravention of the terms of this Indenture.

provided, however, that no independent engineer's certificate need be delivered to the Trustee in the case of any release of property if the fair value thereof, as shown by the certificate filed pursuant to paragraph 1. of this subdivision B., is less than twenty-five thousand dollars ($25,000) or less than one per cent (1%) of the aggregate principal amount of bonds at the time outstanding;

C. A further engineer's certificate stating, in the opinion of the signers, that the aggregate principal amount of Bonds to be outstanding under this Indenture immediately after such release shall not exceed seventy per cent (70%) of the aggregate fair value of the then bonded property of the Company; and

D. An opinion of counsel to the effect that all conditions precedent provided for in this Indenture relating to the release of the property in question have been complied with and, in case the Trustees are requested to release any franchise, that such release .will not impair to any material extent the right of the Company to operate any of its remaining properties.

SECTION 7.09. In case the Company has sold, exchanged, dedicated or disposed of, or intends or has agreed to sell, exchange, dedicate or dispose of, or a governmental body or agency has exercised a right to order the Company to divest itself of, any property of a character excepted from the lien hereof, or the Company desires to disclaim or quitclaim title to property to which the Company does not purport to have title, the Trustees shall, from time to time, execute such instruments of disclaimer or quitclaim as may be appropriate and reasonably requested by the Company upon receipt by the Trustee of the following:

A. an officers' certificate complying with the requirements of Section 17.08 hereof and describing in reasonable detail the property to be disclaimed or quitclaimed; and

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B. an opinion of counsel complying with the requirements of Section 17.08 hereof and stating the signer's opinion that such property is not subject to the lien hereof or required to be subject thereto by any of the provisions hereof, and stating that the execution of such disclaimer or quitclaim is appropriate.

ARTICLE VIII.

APPLICATION OF MONEYS RECEIVED BY THE TRUSTEE.

SECTION 8.01. All moneys received by the Trustee hereunder (except moneys received as a part of any special trust or similar fund, the disposition of which is otherwise provided for) to be applied by it as part of the trust estate shall be held by the Trustee as a part of the trust estate and, so long as the Company is not in default hereunder to the knowledge of the Trustees and there shall not have occurred and be continuing any event of default, shall be paid over from time to time by the Trustee to or upon the order of the Chairman, Chief Executive Officer, President, Vice Chairman, Vice President, Secretary, Assistant Secretary, Treasurer or an Assistant Treasurer of the Company, or by any other officer selected by the Board of Directors either:

A. In the case of moneys deposited with the Trustee pursuant to the provisions of Section 3.05 hereof, in an amount equal to seventy per cent (70%) of the amount of net property additions not theretofore bonded; and in the case of moneys deposited with the Trustee to be applied by it as a part of the trust estate pursuant to any of the other provisions of this Indenture (except moneys referred to in subdivision E. of this Section 8.01), in an amount equal to one hundred per cent (100%) of the amount of net property additions not theretofore bonded; provided, however, that if in either case such net property additions are subject to a prior lien, there shall be deducted from the amount of such net property additions an amount equal to 10/7ths of the principal amount of the then outstanding prior lien bonds secured by such prior lien and not theretofore deducted under any of the provisions of this Indenture; but in every case above mentioned, only upon receipt by the Trustee of an officers' certificate applying for the withdrawal from the trust estate of cash in the amount therein specified, and of the certificates, instruments and opinions of the kind prescribed in, and setting forth the facts with respect to such net property additions specified in subdivisions 2., 3., 4., 6., 7.a), b) and
e), and 8.a) through g), of subdivision C. of Section 3.03 hereof, and an opinion of counsel to the effect that all conditions precedent provided for in this Indenture relating to the withdrawal of the cash in question have been complied with; or

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B. In the case of moneys deposited with the Trustee to be applied by it as a part of the trust estate pursuant to any provision of this Indenture (except moneys referred to in subdivision E. of this Section 8.01), in an amount equal to one hundred per cent (100%) of the principal amount of prior lien bonds (or, in the case of prior lien bonds, 10/7ths of the principal amount whereof has theretofore been deducted in connection with the reduction or withdrawal of cash under any provision of this Indenture, then an amount equal to 10/7ths of the principal amount of such prior lien bonds) deposited with the Trustee or paid or purchased or reduced or ascertained by judicial determination to be invalid and in no case theretofore bonded, but only upon receipt by the Trustee of 1. an officers' certificate applying for the withdrawal from the trust estate of cash in the amount therein specified, 2. prior lien bonds as prescribed in subdivision A.2.a) of Section 3.04 hereof or a certificate and opinion of the kind and setting forth the facts prescribed in subdivision A.2.b) of said
Section 3.04, 3. a certificate of the kind and setting forth the facts prescribed in subdivision A.3. and 4. an opinion of counsel of the kind prescribed by subdivision A.4.a) of said Section 3.04 to the extent applicable; or

C. In the case of moneys deposited with the Trustee pursuant to the provisions of Section 3.05 hereof in an amount equal to one hundred percent (100%) of the principal amount of bonds; and in the case of moneys deposited with the Trustee to be applied by it as a part of the trust estate pursuant to any other provision of this Indenture (except moneys referred to in subdivision E. of this Section 8.01), in an amount equal to 10/7ths of such principal amount of bonds, then or theretofore surrendered for conversion (if convertible) except into other bonds, or paid at maturity or upon redemption or purchased `or otherwise surrendered to the Trustee and canceled, and in no such case theretofore bonded or made the basis for the issue of bonds of one denomination for bonds of another denomination of the same series in exchange therefor, or for the issue of coupon bonds in exchange for registered bonds without coupons, or for the issue of registered bonds without coupons in exchange for -coupon bonds or upon the transfer of registered bonds without coupons, or for the issue of bonds in substitution for bonds mutilated, destroyed, lost or stolen, pursuant to the terms hereof or of any indenture supplemental hereto, but only upon receipt by the Trustee of 1. an officers' certificate applying for the withdrawal from the trust estate of cash in the amount therein specified, not exceeding, however, the aggregate principal amount (or 10/7ths of such principal amount, if applicable) of such bonds so surrendered, the series and principal amount of which shall be specified therein, 2. an officers' certificate stating that the Company is not, to the knowledge of the signers, in default in the performance of any of the terms or covenants of this Indenture and that in the opinion of the signers all

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conditions precedent provided for in this Indenture relating to the withdrawal of such cash have been complied with, and 3. an opinion of counsel to the effect that all conditions precedent provided for in this Indenture relating to the withdrawal of such cash have been complied with; or

D. In the case of moneys received by the Trustee pursuant to the provisions of Section 5.13 hereof as the proceeds of any insurance, in an amount equal to the cost of any replacements of property damaged or destroyed by fire, but only upon receipt by the Trustee of 1. an officers' certificate applying for the withdrawal from the trust estate of cash in the amount therein specified and showing the expenditures made or obligations incurred for replacements actually made, describing such replacements in reasonable detail, stating the cost thereof and stating that the Company is not, to the knowledge of the signers, in default in the performance of any of the terms or covenants of this Indenture and that in the opinion of the signers all conditions precedent provided for in this Indenture relating to the withdrawal of such cash have been complied with,
2. an opinion of counsel to the effect that all conditions precedent provided for in this Indenture relating to the withdrawal of such cash have been complied with, and 3. an engineer's certificate stating the fair value to the Company of such replacements, and if such replacements consist of an acquired plant or system, the fair value of which, as shown by said certificate, is not less than twenty-five thousand dollars ($25,000) and not less than one per cent (1%) of the aggregate principal amount of bonds at the time outstanding, such certificate shall be an independent engineer's certificate; or

E. In the case of moneys deposited with the Trustee pursuant to clause E. of the definition of permissible encumbrances in Article I hereof on account of judgments constituting liens, in an amount equal to the amount of any judgment lien theretofore discharged on account of which such moneys were deposited, but only upon receipt by the Trustee of 1. an opinion of counsel to the effect that such judgment lien, which shall be specified in the opinion, has been released or satisfied, and that all conditions precedent provided for in this Indenture relating to the withdrawal of such cash have been complied with, and 2. an officers' certificate stating that the Company is not, to the knowledge of the signers, in default in the performance of any of the terms or covenants of this Indenture and that in the opinion of the signers all conditions precedent provided for in this Indenture relating to the withdrawal of such cash have been complied with; or

F. In the case of moneys deposited with the Trustee pursuant to Sections 7.03 or 7.05 hereof, in an amount (subject to the limitations hereinafter stated) equal to Federal income taxes or other Federal taxes

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based on or measured by or in respect of net income or profits for a specified period resulting from a sale or other disposition of property released from the lien of the Indenture, but only if the gross proceeds from such sale or other disposition exceed Two Hundred and Fifty Thousand Dollars ($250,000) and upon receipt by the Trustee of:

1. An officers' certificate applying for the withdrawal from the trust estate of cash in the amount therein specified;

2. An officers' certificate stating, in substance:

a) that the Company has theretofore, on a date or dates specified, delivered to and deposited with the Trustee cash in connection with the release of certain specified property pursuant to Section 7.03 or Section 7.05 hereof,

b) the amount of the gross proceeds from the sale or other disposition of such property,

c) that the Company has theretofore paid Federal income taxes or other Federal taxes based on or measured by or in respect of net income or profits for a specified period, in the computation of which taxes gains or profits from the sale or other disposition of such property has been reflected,

d) the amount of such taxes so paid,

e) the amount of taxable gain or profit from the sale or other disposition of such property reflected in the computation of such taxes reduced by the amount of any loss from the sale or other disposition of mortgaged property which is allowable to offset or reduce such taxable gain or profit,

f) the rate or rates of Federal income tax or other Federal taxes imposed upon such taxable gain or profit,

g) such other facts as may be reasonably necessary to determine the amount of reimbursement to which the Company is entitled in accordance with the provisions of this subdivision F

h) the amount of reimbursement to which the Company is entitled in accordance with the provisions of this subdivision
F., and

i) that in the opinion of the signers, all conditions precedent provided for in this Indenture relating to the withdrawal of such cash have been complied with;

3. An accountant's certificate stating that the computation of the amount of reimbursement to which the Company is entitled as set forth in the accompanying officers' certificate is, in the opinion of the signers, in accordance with the provisions of this subdivision F.;

and

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4. An opinion of counsel stating that, in the opinion of the signer, all conditions precedent provided for in this Indenture relating to the withdrawal of such cash have been complied with.

The amount of cash that may be withdrawn pursuant to this subdivision F. shall be a sum determined by multiplying the amount of taxable gain or profit certified under clause e) of the officers' certificate referred to in subparagraph 2. of this subdivision F. by the rate or rates of the tax or taxes imposed upon such taxable gain or profit as certified under clause
f) of said subparagraph 2.; provided, however, that the amount of cash that may be withdrawn pursuant to this subdivision F. shall not exceed the amount of taxes certified under clause d) of said subparagraph 2. For the purposes of this subdivision F., it shall be assumed that the taxable gain or profit certified under clause e) of subparagraph 2. hereof is in addition to the income and profits of the Company from all other sources.

In the event that after the Trustee has paid over to the Company cash in reimbursement of taxes as provided in this subdivision F., it shall be determined that the reimbursement to which the Company is entitled exceeds the amount previously paid over to the Company by the Trustee by more than Fifty Thousand Dollars ($50,000), the Trustee shall, upon receipt of an officers' certificate, accountant's certificate and opinion of counsel of the kinds prescribed in, and setting forth the facts specified in, subparagraphs l., 2.,
3. and 4. of this subdivision F., pay over to the Company, from any of the funds specified in clause a) of said subparagraph 2. then held by the Trustee, the amount to which the Company is entitled less such portion of said amount as shall previously have been paid,over to it pursuant to this subdivision F.

In the event that after the Trustee has paid over to the Company cash in reimbursement of taxes as provided in this subdivision F., it shall be determined that the amount so paid over exceeds by more than Fifty Thousand Dollars ($50,000) the amount of reimbursement to which the Company is entitled, the Company covenants that it will promptly repay to the Trustee the amount of such excess. Any sums so repaid to the Trustee shall be held by it subject to disposition under this Article VIII.

Redeemed prior lien bonds shall be deemed to have been paid and canceled within the meaning of this Section 8.01.

SECTION 8.02. Any moneys in the hands of the Trustee, not theretofore paid over or requested to be paid over to the Company pursuant to the provisions of
Section 8.01 hereof, and not expressly required by this Indenture to be used

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for some other purpose, shall (so long as the Company is not in default hereunder to the knowledge of the Trustees and there shall not have occurred and be continuing any event of default), at the election and in accordance with the request of the Company evidenced by an officers' certificate, be applied by the Trustee from time to time to one or more of the following purposes:

A. To the purchase of prior lien bonds (of such issue and series as may be specified in said officers' certificate), or, at the election of the Company, to the redemption of prior lien bonds in accordance with the provisions upon which such bonds are subject to redemption; or

B. To the purchase of bonds outstanding hereunder (of such series and maturity as may be specified in said officers' certificate), or, at the election of the Company, to the redemption of such bonds in accordance with the provisions upon which such bonds are subject to redemption.

Any purchase of bonds shall be made by the Trustee in the open market, unless such purchase is, in the opinion of the Trustee, impracticable, in which case the Trustee shall advertise for written proposals to sell to it bonds of the series and maturity the purchase of which has been requested, by notice published once in an authorized New York newspaper and in an authorized Detroit newspaper; and the Trustee, to the extent of the funds then in its hands and requested by the Company to be so applied, shall purchase the bonds so offered at the lowest price or prices asked therefor, but in no event at a price in excess of the maximum price, if any, specified by the Company in its request to the Trustee, and reasonable notice shall be given by the Trustee to the holder or holders of the bonds whose proposals are accepted. Should there be two or more proposals at the same price aggregating more than the amount which the Trustee has available after having accepted all proposals at lower prices, such proposals shall, if possible under their terms, be accepted pro rata; provided that the Trustee shall have the right to reject any or all proposals in whole or in part. Purchases of prior lien bonds shall be made in the same manner and subject to the same conditions as is provided in this Section 8.02 for purchases of bonds issued hereunder.

All bonds issued hereunder purchased by or delivered to the Trustee under the provisions of this Section 8.02, together with the unmatured coupons thereto appertaining, upon receipt of the same by the Trustee shall be forthwith cancelled.

The amount, if any, by which the aggregate price (including accrued interest) paid by the Trustee upon any such purchase or redemption of bonds or prior lien bonds exceeds the aggregate principal amount of the bonds or

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prior lien bonds purchased or redeemed shall be paid by the Company to the Trustee, to be held by it as part of the trust estate, and the cost of all advertising and publishing shall be paid by the Company, or, if paid by the Trustee, shall forthwith be repaid to it by the Company upon demand.

Upon the purchase of bonds or of prior lien bonds pursuant to the provisions of this Section 8.02, the Trustee shall pay to, or upon the order of, the Chairman, Chief Executive Officer, President, Vice Chairman, Vice President, Secretary, Assistant Secretary, or the Treasurer or an Assistant Treasurer of the Company, or by any other officer selected by the Board of Directors from any moneys received by the Trustee to be applied by it as a part of the trust estate, an amount in cash equal to the amount, if any, by which the aggregate principal amount of bonds or prior lien bonds purchased exceeds the aggregate purchase price (including accrued interest) paid by the Trustee for such bonds or prior lien bonds.

SECTION 8.03. The Company may, at any time at its election (whether at or prior to the redemption date or maturity of the particular bonds), deposit cash with the Trustee for the payment or redemption of all the bonds or of any part thereof specified by the Company at the time of such deposit. No moneys so deposited by the Company shall be included in the trust estate, but shall be received by the Trustee in trust for the holders of the bonds to be so paid or redeemed and shall be paid to them, respectively, on the redemption or maturity date (or prior thereto payment of the principal, premium, if any, and interest to the maturity or redemption date may be made with the consent of the Company and the Trustee), upon the presentation and surrender of their bonds, together, in the case of redemption, with all unmatured coupons appertaining thereto; provided, however, that upon surrender by the Company from time to time to the Trustee for cancellation prior to such redemption or maturity date, of any of the bonds, with all unmatured coupons appertaining thereto, against which such deposit shall have been made, the Company shall be entitled to receive from the Trustee the cash held in respect of such bonds so surrendered.

Any moneys deposited with the Trustee by the Company for the payment or redemption of bonds and coupons and remaining unclaimed by the bearers or registered owners of the bonds or the bearers of the coupons for two years after the respective date or dates of maturity or redemption of the bonds and coupons with respect to which such deposits shall have been made, shall, upon

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the written request of the Company therefor, be repaid by the Trustee to the Company upon its written receipt therefor; provided, however, that the Trustee, before being required to make any such payment to the Company, may at the expense of the Company cause a notice, stating that such moneys remain unclaimed as aforesaid and that after a date stated therein they will be returned to the Company, to be published once in an authorized New York newspaper and in an authorized Detroit newspaper; but the Trustee shall be under no duty to cause such notice to be published.

SECTION 8.04. Any cash held by the Trustee, under any of the provisions of this Indenture, shall at the request of the Company, evidenced by an officers' certificate, to the extent permitted by law, be invested or reinvested by the Trustee in any bonds or other obligations of the United States of America designated by the Company in such officers' certificate; provided that cash held by the Trustee for the payment or redemption of any bonds or prior lien bonds or for other disbursement on a fixed future date shall not be invested in such bonds or other obligations which shall mature after the maturity or redemption date of the bonds so to be paid or redeemed or after said fixed future date, as the case may be; and provided further, that the Trustee shall not be required to make any such investment after it has cancelled and discharged the lien of this Indenture in accordance with the provisions of Article XVI hereof; and provided further, that the Trustee shall not be required to make any such investment with respect to any cash held to pay matured bonds or coupons or to pay the redemption price for bonds which have been called for redemption. So long as the Company is not in default hereunder to the knowledge of the Trustees and there shall not have occurred and be continuing any event of default, any interest on such bonds or other obligations which may be received by the Trustee shall be forthwith paid to the Company, except that if any such bonds or other obligations shall have been purchased by the Trustee at an amount in excess of the principal amount thereof, all interest received upon such bonds or other obligations shall be retained by the Trustee until the amount of such interest so received and retained shall be equal to the amount of such excess thus paid by the Trustee. Such bonds or other obligations shall be held by the Trustee as a part of the trust estate, or in trust for the holders of the particular bonds and coupons for the redemption or payment of which the cash expended shall have been deposited, as the case may be; but upon a like request of the Company, or at any time without request of the Company when the Trustee in its discretion shall deem such action advisable, the Trustee shall sell all or any designated

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part of the same, but the Trustee shall be under no obligation to make any such sale unless requested by the Company. The proceeds of any such sale shall be held by the Trustee subject to the same provisions hereof as the cash used by it to purchase the bonds or other obligations so sold. In case the net proceeds (excluding any interest received by the Company and including any interest received and retained by the Trustee) realized upon any sale shall amount to less than the amount invested by the Trustee in the purchase of the bonds or other obligations so sold, the Trustee shall within five days after such sale notify the Company in writing thereof and within five days thereafter the Company shall pay to the Trustee the amount of the difference between such purchase price and such net proceeds, and the amounts so paid shall be held by the Trustee in like manner and subject to the same conditions as the proceeds realized upon such sale.

Whenever the Company, upon any application for which provision is made in this Indenture in respect of the withdrawal of cash held by the Trustee, shall become entitled to the payment to it by the Trustee of any moneys theretofore deposited with, or then held by, the Trustee under this Indenture, the Company shall accept bonds or other obligations held by the Trustee as part of the trust estate pursuant to the provisions of this Section 8.04, to the extent that such bonds or other obligations shall be tendered to it by the Trustee in lieu of cash, and such bonds or other obligations shall be accepted in lieu of such cash at the cost thereof to the trust estate, less the amount of any interest thereon received and retained by the Trustee.

SECTION 8.05. The Trustee shall,' if so requested in writing by the Chairman, Chief Executive Officer, President, Vice Chairman or a Vice President or any other officer selected by the Board of Directors and by the Treasurer or any Assistant Treasurer of the Company or any other officer selected by the Board of Directors, consent to the release of any cash received or held by a trustee or other holder under any prior lien as required or permitted by the provisions of Article VII hereof upon receipt by the Trustee of A. a certificate of the trustee under such prior lien that all the conditions for the release of such cash under such prior lien have been complied with, B. an officers' certificate stating that such cash was not received by the trustee of such prior lien in connection with the release of, or in substitution for, property theretofore bonded hereunder or that such cash is being released upon the same basis on which cash could be released under this Article VIII, and that all conditions precedent provided for in this Indenture relating to the release of such cash have been complied

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with, and C. an opinion of counsel stating that all conditions precedent provided for in this Indenture relating to the release of such cash have been complied with. Subject to the provisions of Section 12.02 hereof, such certificates and opinion shall be full authority for the Trustee hereunder for consenting to such release.

SECTION 8.06. In case the trust estate shall be in the possession of a receiver or of a trustee in bankruptcy lawfully appointed, or of an assignee for the benefit of creditors, the powers in and by this Article VIII conferred upon the Company may be exercised by such receiver, trustee or assignee, with the approval of the Trustee, regardless of whether or not the Company is in default hereunder, and in such event a writing, signed by such receiver, trustee or assignee, may be received by the Trustee in lieu of any officers' certificate required by the provisions of this Article VIII, and such receiver, trustee or assignee may make any certificate required by the provisions of this Article VIII to be made by an officer or officers of the Company, and if the Trustees or either of them shall be in possession of the trust estate under any provision of this Indenture, then all the powers by this Article VIII conferred upon the Company may be exercised by the Trustees or that one of them in possession in their, its or his discretion.

ARTICLE IX.

REMEDIES.

SECTION 9.01. In case any one or. more of the following events (in this Indenture termed "events of default") shall happen and be continuing, that is to say:

A. Default shall be made in the due and punctual payment of any installment of interest on any of the bonds issued hereunder or in the due and punctual payment or satisfaction of any sinking fund obligation, when and as such interest installment or sinking fund obligation, as the case may be, shall become due and payable as expressed in such bonds or in this Indenture or in any indenture supplemental hereto, and such default shall continue for a period of sixty days;

B. Default shall be made in the due and punctual payment of the principal of any of the bonds issued hereunder when and as the same shall become due and payable as therein and herein expressed or by declaration or otherwise (except to the extent provided in subdivision D. hereof) as herein provided;

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C. Default shall be made in the due and punctual payment of any installment of interest on any prior lien bonds when and as the same shall become due and payable as therein and in the prior lien securing the same expressed, and such default shall continue for the period of grace, if any, specified in said prior lien after written notice shall have been given to the Company by the Trustee or to the Company and the Trustee by not less than twenty-five per cent (25%) of the bondholders, specifying such default and requiring the same to be remedied and stating that such notice is a "Notice of Default" hereunder;

D. Default shall be made in the due and punctual payment of any installment of any fund required to be applied to the purchase or redemption of any of the bonds issued hereunder for a period of sixty days after the same shall have become overdue and payable;

E. Default shall be made in the due and punctual payment of the principal of any prior lien bonds, when and as the same shall become due and payable either at maturity thereof or by declaration or otherwise, under the provisions thereof or of the prior lien securing the same after written notice shall have been given to the Company by the Trustee or to the Company and the Trustee by not less than twenty-five per cent (25%) of the bondholders, specifying such default and requiring the same' to be remedied and stating that such notice is a "Notice of Default" hereunder;

F. Default shall be made in the performance or observance of any other of the covenants, agreements or conditions to be kept, observed and performed by the Company contained in this Indenture or in any indenture supplemental hereto, or in any of the bonds issued hereunder, or in any prior lien or prior lien bonds, and such default shall continue for a period of ninety days after written notice shall have been given to the Company by the Trustee or to the Company and the Trustee by not less than twenty-five per cent (25%) of the bondholders, specifying such default and requiring the same to be remedied and stating that such notice is a "Notice of Default" hereunder;

G. The Company shall become insolvent or shall admit in writing its inability to pay its debts generally as they become due or shall file a petition in bankruptcy or shall make an assignment for the benefit of its creditors or shall consent to the appointment of a receiver of itself or of the whole or any substantial part of the trust estate; or, on a petition in bankruptcy filed against it, be adjudicated bankrupt, or an order, judgment or decree shall be entered by any court of competent jurisdiction appointing, without its consent, a receiver of it or of the whole or any substantial part of the trust estate and such adjudication, order, judgment or decree shall not have been vacated or set aside or stayed within forty-five days after the entry thereof; or the Company shall file a petition or answer seeking reorganization under any bankruptcy or insolvency law;

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or a court of competent jurisdiction shall enter an order, judgment or decree approving a petition proposing that a plan of reorganization of the Company be effected, or if under the provisions of any law for the relief or aid of debtors any court of competent jurisdiction shall assume custody, control or supervision of the Company or of the whole or any substantial part of the trust estate, and such order, judgment or decree or such custody, control or supervision as the case may be, shall not be vacated or set aside or otherwise terminated or stayed within forty-five days after the entry thereof; or

H. The Company shall have failed to renew or extend its corporate existence upon or prior to expiration thereof under the provisions of its articles of incorporation or of law;

then and in each and every such case either the Trustee or not less than twenty-five per cent (25%) of the bondholders may declare the principal of all bonds issued hereunder and then outstanding, together with all accrued and unpaid interest thereon, if not already due, to be due and payable immediately; and upon any such declaration the same shall become and be due and payable immediately, anything in this Indenture or in any of the bonds contained to the contrary notwithstanding. Any such declaration by the Trustee may be made by notice in writing by the Trustee to the Company, and any such declaration by not less than twenty-five per cent (25%) of the bondholders may be made by notice in writing by such bondholders to the Company and to the Trustee.

SECTION 9.02. In case any one or more of the events of default enumerated in Section 9.01 hereof shall happen and shall be continuing, then and in each and every such case the Trustees or either of them, personally or by their attorneys or agents-

A. May, do the extent permitted by law, enter into and upon and take possession of all the trust estate and each and every part thereof, and exclude the Company, its successors or assigns, and its or their agents, servants and employees wholly therefrom, and have, hold, use, operate, manage and control the same and each and every part thereof and, in the name of the Company or otherwise as they shall deem best, conduct the business thereof and exercise the franchises pertaining thereto and all the rights and powers of the Company, and use all of the then existing property, materials, supplies, stores and other assets for that purpose, and, at the expense of the trust estate, from time to time, maintain, restore, insure and keep insured the properties, plants, equipment and apparatus

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provided or required for use in connection with such business, and likewise, from time to time, at the expense of the trust estate, make all such necessary or proper repairs, renewals and replacements, and all such useful alterations, additions, betterments and improvements as to them shall seem judicious, and collect and receive all tolls, earnings, income, rents, issues, profits and revenues of the same and of every part thereof, and after deducting therefrom the expenses of operation and all expenses incurred hereunder and all other proper outlays herein authorized and all payments which may be made for taxes, assessments and other prior liens and charges upon the trust estate or any part thereof, as well as just and reasonable compensation for their own services and for the services of such attorneys, agents and assistants as they may in the exercise of their discretion employ for any of the purposes aforesaid, the Trustee shall apply the rest and residue of the moneys received by the Trustees or either of them as follows:

1. In case the principal of none of the bonds issued hereunder shall have become due, to the payment of the interest in default, in order of the maturity of the installments of such interest, with, to the extent permitted by law, interest on the overdue installments thereof at the same rates, respectively, as were borne by the bonds on which such interest shall be in default; such payments to be made ratably to the parties entitled thereto, without discrimination or preference.

2. In case the principal of any of the bonds issued hereunder shall have become due, by declaration or otherwise, first to the payment of the interest in default, in the order of the maturity of the installments thereof, with, to the extent permitted by law, interest on the overdue installments thereof at the same rates, respectively, as were borne by the bonds on which such interest shall be in default, and next to the payment of the principal of all bonds then due, issued hereunder; such payments to be made ratably to the parties entitled thereto without discrimination or preference.

In case all of such payments and payment of whatever may be payable for any other purpose required by any provision of this Indenture shall have been made in full, and no suit to foreclose or enforce this Indenture shall have been begun or sale made as hereinafter provided, and upon compliance with all other provisions of this Indenture as to which the Company shall be in default, the Trustees, after making such provision as to them may seem advisable for the payment of the next maturing installment of interest to fall due upon the bonds issued hereunder and then outstanding, shall restore the possession of the trust estate (other than any cash or securities at the time required to be held by the Trustee hereunder) to the Company or whosoever shall be entitled thereto.

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B. May, to the extent permitted by law, with or without entry, sell, subject to the then prior liens, if any, existing thereon or free from such of said liens as the Trustee, in its discretion, may elect to discharge, to the highest and best bidder all and singular the trust estate and the entire right, title, interest, claim and demand of the Company therein and thereto, and the right of redemption thereof, at public auction, at such place, at such time and upon such terms as the Trustee may fix and briefly specify in the notice of sale to be given as herein provided, or as may be required by law.

C. May proceed to protect and enforce their rights and the rights of the bondholders under this Indenture by such suit or suits in equity or at law, whether for the specific performance of any covenant or agreement contained herein or in any indenture supplemental hereto, or in aid of the execution of any power herein granted, or for the foreclosure of the lien of this Indenture, or for the enforcement of any other appropriate legal or equitable remedy, as the Trustees, being advised by counsel, shall deem most effectual to perform, protect and enforce any of their duties or rights hereunder.

SECTION 9.03. In case the Trustees shall proceed by suit or suits at law or in equity after default as above provided, the Trustees shall be entitled to have the trust estate sold by judicial sale under the order, judgment or decree of a court or courts of competent jurisdiction, for or toward the satisfaction of the principal and interest then due or owing on the bonds issued hereunder then outstanding, and for the enforcement of the rights, liens and securities of the Trustees and the bondholders, and shall be entitled as a matter of right, pending such suit or proceedings, to the appointment of a receiver of all the franchises and properties and of the rents, earnings, revenues, issues, profits and income of the Company with such powers as the court making such appointment may confer, whether the trust estate shall or shall not be adequate and sufficient to pay and satisfy the bonds then outstanding; but notwithstanding the appointment of any receiver, the Trustee shall be entitled as pledgee to continue to retain possession and control of any securities and cash at the time held by the Trustee.

SECTION 9.04. In the event of any sale, whether made under the power of sale herein granted or by virtue of judicial proceedings, the whole of the trust estate (including securities, if any, then held thereunder by the Trustee), shall be sold in one parcel and as an entirety, unless such sale as an entirety, in the judgment of the Trustee, shall be impracticable by reason of some statute or other cause, or unless a majority of the bondholders shall in writing request

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the Trustee to cause the trust estate to be sold in parcels, in which case the sale shall be made in such parcels and in such order as may be specified in such request, but if not so specified, or if no such request is made, as the Trustee in its discretion shall deem most expedient in the interest of the bondholders, the Company, for itself, its successors and assigns, and for all persons and corporations hereafter claiming through or under it or them or who may at any time hereafter become holders of liens junior to the lien of this Indenture, hereby expressly waives and releases all right to have the trust estate or any part thereof marshalled upon any sale, foreclosure, or other enforcement hereof, and the Trustees, or any court in which the foreclosure of this Indenture or the administration of the trusts hereby created is sought, shall have the right as aforesaid to sell the entire trust estate as a whole in a single parcel.

SECTION 9.05. Notice of any sale pursuant to any provisions of this Indenture shall state the time and place when and where the sale is to be made, shall contain a brief general description of the property to be sold and shall briefly state the terms of the sale, and shall be sufficiently given if published once in each week for four successive calendar weeks prior to such sale in an authorized New York newspaper and in an authorized Detroit newspaper, unless otherwise provided by law.

SECTION 9.06. The Trustees may adjourn from time to time any sale to be made by them under the provisions of this Indenture, by announcement at the time and place appointed for such sale or for such adjourned sale or sales; and without further notice or publication (unless otherwise required by law), they may make such sale at the time and place to which the same may be adjourned.

SECTION 9.07. The receipt or receipts of the Trustee for the purchase money paid at any such sale, shall be a sufficient discharge therefor to any purchaser of the property or any part thereof sold as aforesaid; and no such purchaser, or his representatives, grantees or assigns, after paying such purchase money and receiving such receipt, shall be bound to see to the application of such purchase money upon or for any trust or purpose of this Indenture, or in any manner whatsoever be answerable for any loss, misapplication or non-application of any such purchase money or any part thereof, or be bound to inquire as to the authorization, necessity, expediency or regularity of any such sale.

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SECTION 9.08. Upon any sale as aforesaid, any purchaser, for the purpose of making settlement or payment for the property purchased, shall be entitled to use and apply any bonds issued hereunder and then outstanding, and any matured and unpaid interest coupons appertaining thereto, by presenting the same so that there may be credited as paid thereon the sums payable out of the net proceeds of such sale to the holder of such bonds and coupons as his ratable share of such net proceeds, after allowing for the proportion of the total purchase price required to be paid in cash for the cost and expenses of the sale, compensation and other charges; and thereupon such purchaser shall be credited, on account of such purchase price payable by him, with the portion of such net proceeds that shall be applicable to the payment of, and that shall have been credited upon, the bonds and coupons so presented; and at any such sale any bondholder or the Trustees or either of them may bid for and purchase such property, and make payment on account thereof as aforesaid, and upon compliance with the terms of sale, may hold, retain and dispose of such property without further accountability therefor.

SECTION 9.09. Upon the completion of any sale or sales under or by virtue of this Indenture, the Trustees shall execute and deliver to the purchaser a good and sufficient deed or other instruments conveying, assigning and transferring the property sold. The Trustees are hereby irrevocably appointed the true and lawful attorneys of the Company, in its name and stead, to make all necessary conveyances, assignments and transfers of property thus sold; and for that purpose they may execute all necessary deeds and instruments of conveyance, assignment and transfer, and may substitute one or more persons with like power; the Company hereby ratifying and confirming all that its said attorneys, or such substitute or substitutes, shall lawfully do by virtue hereof. Nevertheless, the Company, if so requested by the Trustees, shall ratify and confirm any such sale or sales by executing and delivering to the Trustees or to such purchaser all such instruments as may be necessary or in the judgment of the Trustees proper for that purpose and as may be designated in such request.

SECTION 9.10. Any such sale or sales made under or by virtue of this Indenture, whether under the power of sale herein granted or by virtue of judicial proceedings, shall operate to divest all right, title, interest, claim and demand whatsoever, either at law or in equity, of the Company, in and to the premises sold, and shall be a perpetual bar both at law and in equity, against the Company, its successors and assigns, and against any and all persons claiming or to claim the premises sold or any part thereof from, through or under the Company, or its successors or assigns.

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SECTION 9.11. The purchase money, proceeds and avails of any sale, whether made under the power of sale herein granted or pursuant to judicial proceedings, shall be paid to the Trustee and, together with any other sums which then may be held by the Trustee under any provision of this Indenture as part of the trust estate or the proceeds thereof, shall be applied by it as follows:

First. To the payment of the costs and expenses of such sale, including reasonable compensation to the Trustees, their agents, attorneys and counsel, and of all necessary or proper expenses, liabilities and advances made or incurred without negligence or bad faith by the Trustees under this Indenture, and to the payment of all taxes, assessments or liens superior to the lien of this Indenture, except any taxes, assessments or other superior liens subject to which such sale shall have been made.

Second. To the payment of the whole amount then owing or unpaid upon the bonds issued hereunder and then outstanding for principal and interest, with interest on overdue principal and, to the extent permitted by law, overdue installments of interest at the same rates, respectively, as were borne by the bonds whereof the principal or installments of interest may be overdue, and, in case such proceeds shall be insufficient to pay in full the whole amount so due and unpaid upon the bonds, then to the payment of such principal and interest, without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any series over any other series ratably according to the aggregate of such principal and the accrued and unpaid interest. Such payments shall be made on the date fixed therefor by the Trustee, upon presentation of the bonds and coupons and stamping thereon the amount paid if such bonds and coupons be only partly paid, and upon surrender and cancellation thereof if fully paid.

Third. To the payment of the surplus, if any, to the Company, its successors or assigns, or to whosoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct.

SECTION 9.12. In case of any sale made under the power of sale herein granted or pursuant to judicial proceedings, the principal of all the bonds issued hereunder, if not previously due, thereupon shall become due and payable, anything in said bonds or in this Indenture contained to the contrary notwithstanding.

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SECTION 9.13. The Company covenants that A. in case default shall be made in the payment of any interest on any bond or bonds at any time outstanding and secured by this Indenture and such default shall continue for a period of thirty days; or B. in case default shall be made in the payment of the principal of any such bonds when the same shall have become payable, whether at the maturity of said bonds, or by a declaration as authorized by this Indenture, or upon a sale as set forth in Section 9.12 hereof, or otherwise, then, upon demand of the Trustee, the Company will pay to the Trustees, for the benefit of the holders of the bonds and coupons issued hereunder and then outstanding, the whole amount then due and payable on all such bonds and coupons then outstanding for interest or principal, or both, as the case may be, with interest upon the overdue principal and overdue installments of interest at the same rates, respectively, as were borne by the bonds whereof the principal or installments of interest shall be overdue; and, in case the Company shall fail to pay the same forthwith upon such demand, the Trustees, in their own names and as trustees of an express trust, shall be entitled to recover judgment against the Company and any other obligor upon the bonds for the whole amount so due and unpaid.

The Trustees shall be entitled to recover judgment as aforesaid, either before or after or during the pendency of any proceedings for the enforcement of the lien of this Indenture, and the right of the Trustees to recover such judgment shall not be affected. by any entry or sale hereunder, or by the exercise of any other right, power or remedy for the enforcement of the provisions of this Indenture or the foreclosure of the lien thereof, and in the case of a sale of the trust estate, and of the application of the proceeds of sale to the payment of the indebtedness hereby secured, the Trustees in their own names and as trustees of an express trust, shall be entitled to enforce payment of, and to receive all amounts then remaining due and unpaid upon, any and all of the bonds and coupons issued hereunder then outstanding, for the benefit of the holders thereof, and shall be entitled to recover judgment for any portion of the indebtedness remaining unpaid, with interest, as aforesaid. No recovery of any such judgment nor attachment nor levy of execution thereunder upon the trust estate or any part thereof, or upon any other property, shall in any manner or to any extent affect the lien of this Indenture upon the trust estate or any part thereof, or any lien, rights, powers or remedies of the Trustees or of the holders of the bonds issued hereunder, but such lien, rights, powers and remedies shall continue unimpaired as before.

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Any moneys collected by the Trustees under this Section 9.13 shall be paid to the Trustee and applied by it toward payment of the amounts then due and unpaid upon such bonds and coupons in respect whereof such moneys shall have been collected, ratably and without any preference or priority of any kind, according to the amounts due and payable upon such bonds and coupons, respectively, at the date fixed by the Trustee for the distribution of such moneys, upon presentation of the bonds and coupons and stamping such payment thereon, if partly paid, and upon surrender and cancellation thereof, if fully paid.

SECTION 9.14. Subject to the provisions of Section 12.02 hereof, the Trustees shall have power to institute and to maintain such suits and proceedings as the Trustee may be advised by counsel shall be necessary or expedient to prevent any impairment of the security hereunder by any acts of the Company, or of others, in violation of this Indenture, or which are unlawful, or as the Trustee may be advised shall be necessary or expedient to preserve and to protect its interests and the interests of the bondholders in respect of the trust estate, and in respect of the income, earnings, issues and profits arising therefrom; including power to institute and to maintain suits or proceedings to restrain the enforcement of, or compliance with, or the observance of, any legislative or other governmental enactment, rule or order which the Trustee may believe to be unconstitutional or otherwise invalid, if the enforcement of, compliance with, or observance of, such enactment, rule or order would impair the security hereunder or be prejudicial to the interests of the bondholders or of the Trustees.

SECTION 9.15. The Company will not at any time insist upon or plead, or in any manner whatever claim or take the benefit or advantage of any stay or extension law now or at any time hereafter in force; nor will it claim, take or insist on any benefit or advantage from any law now or at any time hereafter in force providing for the valuation or appraisement of the trust estate or any part thereof prior to any sale or sales thereof to be made pursuant to any provisions herein contained or to the decree, judgment or order of any court of competent jurisdiction; nor after any such sale or sales will it claim or exercise any right under or conferred by any law now or at any time hereafter in force, to redeem the property sold or any part thereof; and it hereby expressly waives and relinquishes all benefit and advantage of any and all such stay, extension, valuation, appraisement and redemption law or laws; and it hereby covenants that it will not hinder, delay or impede the execution of any

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power herein granted and delegated to the Trustees, but that it will suffer and permit the execution of every such power as though no such law or laws had been made or enacted.

SECTION 9.16. At any time hereafter before full payment of the bonds issued hereunder, and whenever it shall deem it expedient for the better protection or security of the bonds (although none of the events of default shall have occurred), the Company, with the consent of the Trustees, may surrender and deliver to the Trustees full possession of the whole or any part of the trust estate, for any period fixed or indefinite. In such event, the Trustees shall enter into and upon the trust estate so surrendered and delivered, and shall take and receive possession thereof for such period, fixed or indefinite, as aforesaid, without prejudice, however, to their right at any time subsequently, when entitled thereto by any provision hereof, to insist upon maintaining and to maintain such possession beyond the expiration of any such prescribed period and the Trustees, from the time of such entry, shall work, maintain, use, manage, control and employ the trust estate, so surrendered and delivered, in accordance with the provisions of this Indenture, and shall receive and apply the income and revenues thereof as provided in subdivision A. of Section 9.02 hereof. Upon application of the Trustees and with the consent of the Company, if none of the events of default shall have happened and then be continuing, and without such consent if one or more of the events of default shall have happened and then be continuing, a receiver may be appointed to take possession of, and to operate, maintain and manage the trust estate or any part thereof, and the Company shall transfer and deliver to such receiver possession of the trust estate, wheresoever the same may be situated; but notwithstanding the appointment of any receiver, the Trustee shall be entitled as pledgee to continue to retain the possession and control of any cash or securities at the time held by the Trustee under this Indenture. In every case, when a receiver of the whole or any part of the trust estate shall be appointed under this Section 9.16 or otherwise, the net income and profits of the trust estate shall be paid over to, and shall be received by, the Trustees for the benefit of the holders of the bonds issued hereunder.

SECTION 9.17. Subject to the provisions of Section 12.01 hereof, a majority of the bondholders shall have the right, by an instrument in writing executed and delivered to the Trustee, to direct the time, method and place of conducting any proceeding for any remedy open to the Trustees and of exercising any power or trust conferred upon the Trustees under this Indenture.

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SECTION 9.18. No holder of any bond or coupon issued hereunder shall have the right to institute any suit, action or proceeding in equity or at law for the foreclosure of this Indenture, or for the execution of any trust or power hereof, or for the appointment of a receiver, or for the enforcement of any other remedy under or upon this Indenture, unless such holder previously shall have given to the Trustee written notice of some existing default and of the continuance thereof, as hereinbefore provided; nor unless, also, twenty-five per cent (25%) of the bondholders shall have requested the Trustees in writing after the right to exercise such powers, or right of action, as the case may be, shall have accrued, and shall have afforded to them a reasonable opportunity, either to proceed to exercise the powers hereinbefore granted, or to institute such action, suit or proceedings in their own names; nor unless, also, such holder or holders shall have offered to the Trustees security and indemnity satisfactory to them against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustees shall have refused or neglected to comply with such request within a period of ninety days after receipt of such request and offer of security and indemnity; and, subject to the provisions of Section 12.02 hereof, such notification, request and offer of indemnity are hereby declared, in every such case, at the option of the Trustees, to be conditions precedent to the execution of the powers and trusts of this Indenture and to any action or cause of action for foreclosure or for the appointment of a receiver, or for any other remedy hereunder; it being understood and intended that no one or more holders of bonds or coupons issued hereunder shall have any right in any manner whatever hereunder or under the bonds or coupons by his or their action to affect, disturb. or prejudice the lien of this Indenture or to enforce any right hereunder, except in the manner herein provided, and that all proceedings hereunder, at law or in equity shall be instituted, had and maintained in the manner herein provided and for the ratable benefit of all holders of such outstanding bonds and coupons. Nothing herein contained shall, however, affect or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, each of the bonds to the respective holders thereof at the time and place in the bonds and coupons expressed, or to affect or impair the right of any bondholder, which is also absolute and unconditional, to institute suit for the enforcement of any such payment.

Anything to the contrary notwithstanding contained in this Section 9.18, the parties to this Indenture and the bondholders agree that the court may in its discretion require, in any suit for the enforcement of any right or remedy under

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this Indenture, or in any suit against the Trustees or either of them for any action taken or omitted by them, it or him, as Trustees, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, that the provisions of this paragraph shall not apply to any suit instituted, directly or through an agent or agents, by the Trustees or either of them, to any suit instituted by any bondholder, or group of bondholders, holding in the aggregate more than ten per cent (10%) in principal amount of the bonds outstanding or to any suit instituted by any bondholder for the enforcement of the payment of the principal or of interest on his bonds at and after the maturity of such principal or interest as expressed in such bonds.

SECTION 9.19. The foregoing provisions of this Article IX are subject to condition that if, at any time after an event of default and before any sale of the trust estate shall have been made, all arrears of principal and interest, with interest upon all overdue principal and overdue installments of interest at the same rates, respectively, as were borne by the bonds of which the principal or installments of interest may be overdue, together with the reasonable charges and expenses of the Trustees, their agents, attorneys and counsel, and all other sums payable by the Company hereunder, except the principal of, and interest accrued since the next preceding interest date on, the bonds due and payable solely by virtue of a declaration made under Section 9.01 hereof, shall either be paid by the Company or be collected and paid out of the trust estate, and all other defaults, if any, which shall have occurred, shall have been remedied or cured, to the reasonable satisfaction of the Trustee--then and in every such case the Trustees, upon the written request of a majority of the bondholders, shall waive any such default and its consequences and rescind any declaration previously made under Section 9.01 hereof that the bonds issued hereunder be and become due and payable before the maturity thereof; but no such waiver or rescission shall extend to or affect any subsequent default or impair or exhaust any right or power consequent thereon.

In case the Trustees shall have proceeded to enforce any right under this Indenture by foreclosure, entry or otherwise, and such proceedings shall have been discontinued or abandoned because of such waiver or for any other reason, or shall have been determined adversely to the Trustees, then and in every such case, the Company and the Trustees shall severally and respectively

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be restored to their former positions and rights hereunder in respect of the trustee estate, and all rights, remedies and powers of the Trustees shall continue as though no such proceedings had been taken.

No delay or omission of the Trustees, or of any holder of bonds issued hereunder, to exercise any right or power accruing upon or after any default continuing as aforesaid, shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy given hereunder to the Trustees or to the bondholders, subject to the provisions of Section 9.18 hereof, may be exercised from time to time and as often as may be deemed expedient by the Trustees or by the bondholders.

Except as herein expressly provided to the contrary, no remedy herein conferred upon or reserved to the Trustees or the holders of bonds issued hereunder, is intended to be exclusive of any other remedy or remedies; but each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute.

SECTION 9.20. The Trustee shall be entitled and empowered either in its own name or as trustee of an express trust, or as attorney-in-fact for the holders of the bonds and the holders of the coupons, or in any one or more such capacities, to file such proof of debt, amendment of proof of debt, claim, petition or other document as may be necessary or advisable in order to have the claims of the Trustees and of the holders of bonds and of the coupons allowed in any equity receivership, insolvency, bankruptcy, liquidation, readjustment, reorganization or other similar proceedings relative to the Company or any other obligor upon the bonds, or its or their creditors or property. The Trustee is hereby irrevocably appointed (and the successive respective holders of the bonds and of the coupons by taking and holding the same shall be conclusively deemed to have so appointed the Trustee) the true and lawful attorney-in-fact of the respective holders of the bonds and coupons, with authority to make or file in the respective names of the holders of the bonds and/or coupons, or on behalf of all the holders of the bonds and/or coupons as a class (subject to deduction from any such claim of the amounts of any claims filed by any of the holders of the bonds and/or coupons themselves), any proof of debt, amendment of proof of debt, claim, petition or other documents in any such proceedings and to receive payment of any sums

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becoming distributable on account thereof, and to execute any other papers and documents and do and perform any and all acts and things for and on behalf of such holders of the bonds and/or coupons, as may be necessary or advisable in the opinion of the Trustee in order to have the respective claims of the Trustees and/or the holders of the bonds and coupons against the Company and/or its property allowed in any such proceeding, and to receive payment of or on account of such claims; provided, however, that nothing herein contained shall be deemed to authorize or empower the Trustee to consent to or accept or adopt, on behalf of any holder of the bonds or coupons, any plan of reorganization or readjustment of the Company affecting the bonds or coupons.

SECTION 9.21. All rights, remedies and powers provided by this Article IX may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law in the premises, and all the provisions of this Article IX are intended to be subject to all applicable mandatory provisions of law that may be controlling in the premises and to be limited to the extent necessary so that they will not render this Indenture invalid, unenforceable or not entitled to be recorded or filed under the provisions of any applicable law.

ARTICLE X.

CONCERNING THE BONDHOLDERS.

SECTION 10.01. As to all coupon bonds registered as to principal and as to all registered bonds without coupons, the person in whose name each such bond shall be registered shall for all purposes of this Indenture be deemed and regarded as the absolute owner thereof, and payment of or on account of the principal of such bond and of or on account of the interest on any such registered bond without coupons, shall be made only to or upon the order of such registered owner thereof, but such registration may be changed as herein provided. All such payments shall be valid and effectual to satisfy and discharge the liability of the Company upon such bonds to the extent of the sum or sums so paid. The Company and the Trustees may deem and treat the bearer of any bond issued hereunder which shall not at the time be registered, and the bearer of any coupon for interest on any bond, whether such bond be registered or not, as the absolute owner of such bond or coupon for the purpose of receiving payment thereof and for all other purposes whatsover, and the Company and the Trustees shall not be affected by any notice to the contrary.

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SECTION 10.02. Any request, declaration or other instrument, which this Indenture may require or permit to be signed and executed by the bondholders, may be in any number of instruments of similar tenor, and shall be signed or executed by such bondholders in person or by attorney appointed in writing. Proof of the execution of any such request, declaration or other instrument, or of the writing appointing any such attorney, or of the holding by any person of the bonds or coupons appertaining thereto, shall be sufficient (subject, insofar as the Trustee is concerned, to the provisions of Section 12.02 hereof) for any purpose of this Indenture (except as otherwise herein expressly provided) if made in the manner provided in Section 14.10 hereof.

SECTION 10.03. Neither the Trustees nor the Company shall be bound to recognize any person as a bondholder unless and until, if required, his bond is submitted for inspection and his title thereto satisfactorily established if disputed. Any action taken by the Trustees or by the Company pursuant to this Indenture upon the request of authority or consent of any person who, at the time of making such request or giving such authority or consent, is the holder or registered owner of any bond issued hereunder, shall be conclusive and binding upon all future holders or registered owners of the same bond and bonds issued in exchange or substitution therefor.

SECTION 10.04. All rights of action under this Indenture may be enforced by the Trustees without the possession of any of the bonds or coupons issued hereunder or the production thereof at any trial or other proceedings relative thereto.

ARTICLE XI.

IMMUNITIES OF OFFICERS, DIRECTORS, INCORPORATORS,
SUBSCRIBERS AND STOCKHOLDERS.

SECTION 11.Ol. No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any bond or coupon issued hereunder, or because of the creation of any indebtedness hereby secured, shall be had against any incorporator, or against any past, present or future subscriber to the capital stock, stockholder, officer or director of the Company, as such, or of any predecessor or successor corporation either directly or through the Company or any such predecessor or successor corporation, by the enforcement of any assessment or penalty, or because of any representation

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arising from the capitalization of the Company or of any such predecessor or successor corporation, or by any legal or equitable proceeding by virtue of any constitution, statute or law or otherwise; it being expressly agreed and understood that this Indenture and the obligations issued hereunder are solely corporate obligations and that no personal liability whatever, under any circumstances or conditions, shall attach to or be incurred by the incorporators, subscribers to the capital stock, stockholders, officers or directors, past, present or future, of the Company or of any predecessor or successor corporation, or any of them, because of the incurring of the indebtedness hereby authorized, or under or by reason of any of the obligations, covenants or agreements contained in this Indenture or in any of the bonds or coupons issued hereunder, or implied therefrom; and that any and all personal liability of every name and nature, and any and all rights and claims against every such incorporator, subscribers to the capital stock, stockholder, officer or director, whether arising at common law or in equity, or created by statute or constitution, are hereby expressly released and waived by the Trustees and by each of the bondholders as a condition of, and as part of the consideration for, the execution of this Indenture and the issue of the bonds and coupons issued hereunder.

ARTICLE XII.

THE TRUSTEES.

SECTION 12.01. The Trustees, for themselves and their respective successors, accept the trusts created by this Indenture upon the terms and conditions hereof, including the following to all of which the parties hereto and the holders from time to time of the bonds agree:

A. The Trustees shall be entitled to reasonable compensation for all services rendered by them hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), and such compensation, as well as the reasonable compensation of their counsel, and all other reasonable expenses incurred by the Trustees hereunder, and all taxes which may have been assessed against the Trustees as such or against any funds on deposit with them hereunder which the Trustees may be required or permitted by law to deduct from such deposit and to pay, the Company agrees to pay promptly on demand from time to time as such services shall be rendered and as such expenses shall be incurred. In default of such payment by the Company, the Trustees shall have a lien therefor on the property subject to the lien of this Indenture and the proceeds thereof prior to the lien of

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the bonds and coupons and a lien therefor on any moneys held by the Trustees hereunder prior to any rights in such moneys of the holders of the bonds and of the coupons. The Company also agrees to indemnify the Trustees for, and to hold them harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustees, arising out of or in connection with the acceptance or administration of this trust, as well as the costs and expenses of defending against any claim of liability in the premises.

B. The Trustees may execute any of the trusts or powers hereof and perform any duty hereunder either directly or by or through agents or attorneys.

C. The Trustees shall not be responsible in any manner whatsoever for the correctness of the recitals herein or in the bonds (except as to the Trustee for its certificate of authentication thereon) or in the coupons contained, all of which are made by the Company solely; and the Trustees shall not be responsible or accountable in any manner whatsoever for or with respect to the validity or execution or sufficiency of this Indenture, or of any indenture supplemental hereto, or of the bonds or coupons, or for the value of the property subject to the lien of this Indenture or any part thereof, or for the title of the Company thereto, or for the security afforded thereby and hereby, or for the validity of any securities at any time held hereunder, and the Trustees make no representation with respect thereto. The Trustees shall not be accountable for the use or application by the Company of any bonds authenticated and delivered hereunder or of the proceeds of such bonds, or for the use or application of any moneys paid over in accordance with any provision of this Indenture.

D. The Trustees, subject to the provisions of Section 12.02 hereof, shall be under no obligation to exercise any of the trusts or powers hereof at the request, order or direction of any of the bondholders, pursuant to the provisions of this Indenture, unless such bondholders shall have offered to the Trustees security or indemnity satisfactory to them against the costs, expenses and liabilities to be incurred therein or thereby.

E. The Trustees may consult with counsel, and, to the extent permitted by Section 12.02 hereof, the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by them hereunder in good faith and in accordance with the opinion of such counsel.

F. The Trustees, to the extent permitted by Section 12.02 hereof, may rely upon the certificate of the Secretary or one of the Assistant Secretaries of the Company, under its corporate seal, as to the adoption of any resolution by its Board or stockholders.

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G. Any action taken by the Trustees pursuant to any provision hereof at the request or with the consent of any person who at the time is the holder of any bond shall be conclusive and binding in respect of such bond upon all future holders thereof, whether or not such bond shall have noted thereon the fact that such request or consent had been made or given.

H. The Trustees shall not be personally liable in case of entry by them, or either of them, upon the mortgaged and pledged property for debts contracted or liability or damages incurred in the management or operation of said property.

I. The Trustees, to the extent permitted by Section 12.02 hereof, may rely, and shall be protected in acting upon, any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, coupon or other paper or document believed by them to be genuine and to have been signed or presented by the proper party or parties.

J. All moneys received by the Trustee under or pursuant to any provision of this Indenture (including any moneys received by it as paying agent) shall constitute trust funds for the purposes for which they were paid or are held, but need not be segregated in any manner from any other moneys and may be deposited by the Trustee, under such conditions as may be prescribed by law, in its general banking department.

SECTION 12.02. None of the provisions of this Indenture shall be construed as relieving either of the Trustees from liability for its or his own negligent action, its or his own negligent failure to act, or its or his own wilful misconduct, except that, anything in this Indenture contained to the contrary notwithstanding:

A. Unless and until an event of default shall have happened which at the time is continuing,

1. neither of the Trustees shall be liable except for the performance of such duties as are specifically set out in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustees, whose duties and obligations shall be determined solely by the express provisions of this Indenture; and

2. the Trustees may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, in the absence of bad faith on the part of the Trustees, upon certificates and opinions conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which, by the provisions of this Indenture, are specifically required to be furnished to the Trustees, the Trustees shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture;

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B. The Trustee shall not be liable to any holder of bonds or coupons or to any other person for any error of judgment made in good faith by a responsible officer or officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and the Individual Trustee shall not be liable to any holder of bonds or coupons or to any other person for any error of judgment made in good faith, unless it be proved that he was negligent in ascertaining the pertinent facts; and

C. The Trustees shall not be liable to any holder of bonds or coupons or to any other person with respect to any action taken or omitted to be taken by them in good faith, in accordance with the direction of the holders of a majority of the bonds at the time outstanding under this Indenture, relating to the time, method and place of conducting any proceeding for any remedy available to them or exercising any trust or power conferred upon them by this Indenture.

If an event of default shall have happened, then, so long as the same shall be subsisting, each of the Trustees shall exercise such of the rights and powers vested in them respectively by this Indenture, and shall 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.

Notwithstanding any provisions of this Indenture authorizing the Trustees conclusively to rely upon any certificates or opinions, the Trustees may, but to the extent permitted by this Section 12.02 need not, require any further evidence or make any further investigation as to the facts or matters stated therein which they may, in good faith, deem reasonable in the circumstances; and the Trustees shall, if requested in writing so to do by the holders of not less than a majority in principal amount of the bonds then outstanding hereunder, require such further evidence or make such further investigation, provided, however, that, if the payment within a reasonable time to the Trustees of the cost, expenses and liabilities likely to be incurred by them in making such investigation is not reasonably assured to the Trustees by the security afforded to them by the terms of this Indenture, the Trustees may require reasonable indemnity against such expense or liability as a condition to so proceeding.

If the Trustees shall determine or shall be requested, as aforesaid, to make such further investigation, they shall be entitled to examine the books, records and premises of the Company; and unless satisfied, with or without such

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investigation, of the truth and accuracy of the matters stated in such certificates or opinions, they shall be under no obligation to grant any application or take or permit any action hereunder. The reasonable expense of every such examination shall be paid by the Company, or, if paid by the Trustees, shall be repaid by the Company, upon demand, with interest at the rate of five per cent (5%) per annum, and until such repayment shall be secured by a lien on the property which is subject to the lien of this Indenture and the proceeds thereof prior to the lien of the bonds and coupons.

No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

SECTION 12.03. The Trustees shall give to the bondholders, in the manner and to the extent provided in subdivision C. of Section 12.10, notice of the happening of all defaults known to them within ninety days after the occurrence thereof, or promptly after such default becomes known to them if they learn of such default after said ninety-day period, but in the case of any default of the character specified in subdivision F. of Section 9.01 hereof, no such notice shall be given until at least sixty days after the occurrence thereof; provided, that, except in the case of a default resulting from the failure to make any payment of principal of or interest on the bonds, or in the payment of any sinking or purchase fund installment, the Trustees may withhold such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or responsible officers, of the Trustee in good faith determine that the withholding of such notice is in the interests of the bondholders. For the purposes of this Section 12.03, the term "default" shall mean any event which is, or after notice or lapse of time or both would become, an event of default.

Nothing herein contained shall require the Trustees to give any notice of any default which has been cured.

SECTION 12.04. If the Trustee or the Individual Trustee has or shall acquire any conflicting interest as defined in this Section 12.04, it or he shall, within ninety days after ascertaining that it or he has such conflicting interest, either eliminate such conflicting interest or resign, such resignation to become

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effective upon the appointment of a successor and such successor's acceptance of such appointment, and the Company shall take prompt steps to have a successor appointed in the manner provided in Section 12.06 hereof. For the purposes of this Section 12.04 the Trustee or the Individual Trustee shall be deemed to have a conflicting interest if:

A. the Trustee or the Individual Trustee is trustee under another indenture under which any other securities, or certificates of interest or participation in other securities, of the Company are outstanding, unless such other indenture is a collateral trust indenture under which the only collateral consists of bonds issued and outstanding under this Indenture, provided, however, that there shall be excluded from the operation of this subdivision A. of Section 12.04 any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding, if the Company shall have sustained the burden of proving, on application to the Securities and Exchange Commission and after opportunity for hearing thereon, that trusteeship under this Indenture and under such other indenture is not so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee or the Individual Trustee, as the case may be, from acting as such under one of such indentures;

B. the Trustee or any of its directors or executive officers or the Individual Trustee is an obligor upon the bonds issued under this Indenture or an underwriter for the Company;

C. the Trustee or the Individual Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with the Company or an underwriter for the Company;

D. the Trustee any of its directors or executive officers or the Individual Trustee is a director, officer, partner, employee, appointee, or representative of the Company or of an underwriter (other than the Trustee or the Individual Trustee) for the Company who is currently engaged in the business of underwriting, except that 1. one individual may be a director and/or an executive officer of the Trustee and also a director and/or an executive officer of the Company, but may not be at the same time an executive officer of both the Trustee and of the Company, and 2. if and so long as the number of directors of the Trustee in office is more than nine, one additional individual may be a director and/or an executive officer of the Trustee and a director of the Company, and 3. the Trustee or the Individual Trustee may be designated by the Company or by any underwriter for the Company, to act in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent, or

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depositary, or in any other similar capacity, or, subject to the provisions of subdivision A. of this Section 12.04, to act as trustee, whether under an indenture or otherwise;

E. ten per cent (10%) or more of the voting securities of the Trustee is beneficially owned either by the Company or by any director, partner or executive officer of the Company or twenty per cent (20%) or more of such voting securities is beneficially owned, collectively, by any two or more of such persons; or ten per cent (10%) or more of the voting securities of the Trustee is beneficially owned either by an underwriter for the Company or by any director, partner or executive officer of any such underwriter, or is beneficially owned, collectively, by any two or more such persons;

F. the Trustee or the Individual Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default as hereinafter in this Section 12.04 defined, 1. five per cent (5%) or more of the voting securities, or ten per cent (10%) or more of any other class of security, of the Company, not including bonds issued under this Indenture and securities issued under any other indenture of the Company under which the Trustee or the Individual Trustee is also trustee, or 2. ten per cent (10%) or more of any class of security of any underwriter for the Company;

G. the Trustee or the Individual Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default as hereinafter in this Section 12.04 defined, five per cent (5%) or more of the voting securities of any person who, to the knowledge of the Trustee or the Individual Trustee owns ten per cent (10%) or more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with, the Company;

H. the Trustee or the Individual Trustee is the beneficial owner of, or holds as collateral security for an obligation which is in default as hereinafter in this Section 12.04 defined, ten per cent (10%) or more of any class of security of any person who, to the knowledge of the Trustee or the Individual Trustee owns fifty per cent (50%) or more of the voting securities of the Company; or

I. the Trustee or the Individual Trustee owns, on May 15 in any calendar year, in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of twenty-five per cent (25%) or more of the voting securities, or of any class of security, of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under subdivision F., G. or H. of this Section 12.04. As to any of such securities of which the Trustee or the

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Individual Trustee acquired ownership through becoming executor, administrator or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply, for a period of not more than two years from the date of such acquisition, to the extent that such securities included in such estate do not exceed twenty-five per cent (25%) of such voting securities or twenty-five per cent (25%) of any such class of security. Promptly after May 15 in each calendar year, the Trustee and the Individual Trustee shall make a check of its and his holdings of such securities in any of the above-mentioned capacities; as of such May 15. If the Company fails to make payment in full of principal or interest upon the bonds outstanding under this Indenture when and as the same becomes due and payable, and such failure continues for thirty days thereafter, the Trustee and the Individual Trustee shall make a prompt check of its and his holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such thirty-day period, and after such date, notwithstanding the foregoing provisions of this subdivision I., all such securities so held by the Trustee or the Individual Trustee, with sole or joint control over such securities vested in it or him, shall, but only so long as such failure shall continue, be considered as though beneficially owned by the Trustee or the Individual Trustee, for the purposes of subdivisions F., G. and H. of this Section 12.04.

In the event that any person shall at any time become an obligor upon any of the bonds, so long as such person shall continue to be such obligor the provisions of the foregoing subdivisions A. to I., inclusive, of this Section 12.04 shall be applicable to the Trustee and the Individual Trustee and such obligor with the same effect as if the name of such obligor were substituted for that of the Company in said provisions.

The specification of percentages in subdivisions E. to I., inclusive, of this Section 12.04 shall not be construed as indicating that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purposes of subdivision C. or G. of this Section 12.04.

For the purposes of subdivisions F., G., H. and I. of this Section 12.04, 1. the terms "security" and "securities" shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an obligation to repay moneys lent to a person by one or more banks, trust companies, or banking firms, or any certificate of interest or participation in any such note or evidence of

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indebtedness; 2. an obligation shall be deemed to be in default when a default in payment of principal shall have continued for thirty days or more, and shall not have been cured; and 3. the Trustee or the Individual Trustee shall not be deemed the owner or holder of a) any security which it or he holds as collateral security (as trustee or otherwise) for an obligation which is not in default as defined in clause 2. above, or b) any security which it or he holds as collateral security under this Indenture, irrespective of any default hereunder, or c) any security which it or he holds as agent for collection, or as a custodian, escrow agent or depositary, or in any similar representative capacity.

For the purposes of this Section 12.04, the term "underwriter," when used with reference to the Company or any other obligor upon any of the bonds, means every person, who, within three years prior to the time as of which the determination is made, has purchased from the Company of such obligor with a view to, or has sold for the Company or such obligor in connection with, the distribution of any security of the Company or such obligor outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission.

For the purposes of this Section 12.04, the term "person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.

For the purposes of this Section 12.04, the percentages of voting securities and other securities referred to in subdivisions E. to I., inclusive, shall be calculated in accordance with the following provisions:

(1) A specified percentage of the voting securities of a person means such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person.

(2) A specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding.

1 4 0

(3) The term "amount," when used in regard to securities, means the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares, and the number of units if relating to any other kind of security.

(4) The term "outstanding" means issued and not held by or for the account of the issuer. The following securities shall not be deemed outstanding within the meaning of this definition:

(i) Securities of an issuer held in a sinking fund relating to securities of the issuer of the same class;

(ii) Securities of an issuer held in a sinking fund relating to another class of securities of the issuer, if the obligation evidenced by such other class of securities is not in default as to principal or in interest or otherwise;

(iii) Securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise; and

(iv) Securities held in escrow if placed in escrow by the issuer thereof.

Provided, however, that any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof.

(5) A security shall be deemed to be of the same class as another security if both securities confer upon the holder or holders thereof substantially the same rights and privileges; provided, however, that, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series different classes; and provided, further, that, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture.

SECTION 12.05. If the Trustee shall at any time cease to be a bank or trust company in good standing organized and doing business under the laws of the United States or of any State and having its principal office in the Borough of Manhattan, The City of New York, New York, or in Detroit, Michigan, or in any other city in the United States of America approved by a certified resolution and having a combined capital and surplus of not less than Five Million Dollars ($5,000,000), which is authorized under the laws of the

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jurisdiction of incorporation to exercise corporate trust powers and is subject to supervision or examination by Federal or State authority, then the Trustee shall resign within thirty days thereafter, such resignation to become effective upon the appointment of a successor Trustee and such successor's acceptance of such appointment. If the Trustee publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, the combined capital and surplus of the Trustee shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If the Trustee shall fail or refuse to resign within said period, or if the Trustee or the Individual Trustee has or shall acquire any conflicting interest of the character specified in Section 12.04 and shall fail or refuse either to eliminate such conflicting interest or to resign within the period in said Section 12.04 provided in respect of such resignation, then A. the Trustee or the Individual Trustee, as the case may be, shall, within ten days after the expiration of said period, transmit notice of such failure or refusal to the bondholders in the manner and to the extent provided in subdivision C. of Section 12.10 hereof; and B. any bondholder, who has been the bona fide holder of a bond for at least six months, may, subject to the provisions of Section 9.18 hereof, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee or the Individual Trustee, as the case may be, and the appointment of a successor, if the Trustee or the Individual Trustee, as the case may be, fails, after written request therefor by such bondholder, to comply with the provisions of said Section 12.04.

SECTION 12.06. The Trustee and any successor to the Trustee may resign and be discharged from the trust created by this Indenture by giving notice thereof in writing to the Company specifying the date when such resignation shall take effect, and by giving notice thereof to the bondholders, in the manner and to the extent provided in subdivision C. of Section 12.10 hereof, and by publishing such notice at least once in an authorized New York newspaper and in an authorized Detroit newspaper. Subject to the provisions of Sections 12.04 and 12.05 hereof, such resignation shall take effect on the date specified in such notice unless previously a successor Trustee shall have been appointed as hereinafter provided, in which event such resignation shall take effect upon the appointment of such successor Trustee. The Individual Trustee and any successor to the Individual Trustee may resign at any time and be discharged from the trusts hereby created by giving the Trustee and the Company notice in writing of such resignation, specifying a date when such resignation shall

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take effect. Such resignation shall, subject to the provisions of Sections 12.04 and 12.05 hereof, take effect on the day specified in such notice unless previously a successor trustee shall have been appointed as hereinafter provided, in which event such resignation shall take effect immediately upon the appointment of such a successor trustee.

Either of the Trustees or any successor trustee may be removed at any time by the holders of a majority in principal amount of the bonds issued hereunder and at the time outstanding, upon payment to the trustee so removed of all moneys then due to it or him hereunder, by an instrument or concurrent instruments in writing, signed in duplicate by such holders. One copy shall be filed with the Company and the other with the trustee so removed.

The Individual Trustee and any successor to the Individual Trustee may be removed at any time by an instrument in writing signed in duplicate by the Trustee, one copy of which shall be filed with the Company and the other delivered to the Individual Trustee so removed.

In case at any time either of the Trustees or any successor trustee shall resign, die, be dissolved or be removed or otherwise shall become disqualified to act or incapable of acting, or in case control of the Trustee or of any successor trustee, or of its officers shall be taken over by any public officer or officers, a successor trustee may be appointed by the holders of a majority in principal amount of the bonds issued hereunder and at the time outstanding by an instrument or concurrent instruments in writing signed in duplicate by such holders, and filed, one copy with the retiring trustee and the other with the successor trustee, notification thereof being given to the Company by such successor trustee; but until a successor trustee shall be so appointed by the bondholders as herein authorized, the Company, by an instrument in writing, executed by order of its Board of Directors, shall in any such case appoint a successor to the Trustee and the Trustee shall, by an instrument in writing in any such case, appoint a successor to the Individual Trustee. Every such successor to the Trustee so appointed by the bondholders, by a court of competent jurisdiction or by the Company shall be a bank or trust company in good standing organized and doing business under the laws of the United States or of any State, having its principal office in the Borough of Manhattan, The City of New York, New York, or in Detroit, Michigan, or in any other city in the United States of America approved by a certified resolution and A. which shall be a corporation having a combined capital and surplus of not less

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than Five Million Dollars ($5,000,000), B. which shall be authorized under the laws of the jurisdiction of incorporation to exercise corporate trust powers, and C. which shall be subject to supervision or examination by a Federal or State authority. If such successor Trustee publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, the combined capital and surplus of such successor Trustee shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Every such successor trustee appointed by the bondholders or by the Trustee in succession to the Individual Trustee shall always be an individual, a citizen of the United States of America, unless otherwise required by law.

Anything hereinabove to the contrary notwithstanding, in case at any time the Individual Trustee, or any successor thereto, shall die, become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of the Trustees hereunder shall vest in and be exercised by the Trustee, without the appointment of a successor Individual Trustee.

If in a proper case no appointment of a successor to the Trustee or of a successor to the Individual Trustee shall be made pursuant to the foregoing provisions of this Article XII within thirty days after a vacancy shall have occurred in the office of trustee, the holder of any bond or the retiring Trustee or Individual Trustee may apply to any court (State or Federal) having jurisdiction to appoint a successor trustee, and such court may thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a successor to the Trustee or to the Individual Trustee, as the case may be.

SECTION 12.07. Any successor trustee appointed hereunder shall execute, acknowledge and deliver to its or his predecessor trustee and also to the Company, an instrument in writing accepting such appointment hereunder, and thereupon such successor trustee, without any further act, deed or conveyance, shall become fully vested with all the estates, authority, rights, trusts, powers, duties and obligations of its or his predecessor trustee and be entitled to the immediate delivery by such predecessor trustee of any part of the trust estate in the hands or under the control of such predecessor trustee and all the estate, right, title and interest of such predecessor trustee in the trust estate shall wholly cease and determine; but, on the written request of the Company or the successor trustee, such retiring trustee shall, upon the

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payment of its charges, execute, acknowledge and deliver an appropriate instrument in writing transferring to such successor trustee upon the trusts herein expressed, all the estates, properties, rights, powers and trusts of the predecessor trustee so ceasing to act (but may retain and reserve its lien upon the trust estate for its reasonable compensation and expenses, if any thereof remain unpaid), and shall duly assign, transfer and deliver all property and moneys held by such trustee to the successor trustee, it being understood that all securities, cash and other pledged property the custody of which is given to the Trustee, shall always be in its custody or in that of its proper successor in trust. Should any deed, conveyance or instrument in writing from the Company be required by the successor trustee for more fully and certainly vesting in, and confirming to, such successor trustee such estates, rights, powers and duties, any and all such deeds, conveyances and instruments in writing shall be executed, acknowledged and delivered by the Company to the successor trustee upon the latter's request. The Company shall promptly give notice of the appointment of any successor trustee to the bondholders in the manner and to the extent provided in subdivision C. of Section 12.10 hereof and by publishing such notice at least once in an authorized New York newspaper and in an authorized Detroit newspaper.

SECTION 12.08. Any corporation into which the Trustee or any successor to the Trustee may be merged or converted or with which it or any successor trustee may be consolidated, or any corporation resulting from any merger or conversion or consolidation to which the Trustee or any successor to the Trustee may be a party, shall be the successor of the Trustee under this Indenture, without the execution or filing of any instrument or the performance of any further act on the part of the parties hereto.

In case any of the bonds to be issued hereunder shall have been authenticated but not delivered, any successor to the Trustee may adopt the certificate of authentication of the Trustee or of any successor to it, and deliver the same as so authenticated; and in case any of the bonds shall not have been authenticated, any successor to the Trustee may authenticate such bonds in its own name; and in all such cases such certificate shall have the full force which it is anywhere in the bonds or in this indenture provided that the certificate of the Trustee shall have.

SECTION 12.09. A. If the Trustee or the Individual Trustee, as the case may be, in its or his individual capacity shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company (other than in a

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relationship of the nature specified in subdivision F. of this Section 12.09) within four months prior to a default, as defined in subdivision E. of this
Section 12.09, or subsequent to such a default, then, unless and until such default shall be cured, the Trustee or the Individual Trustee, as the case may be, shall set apart and hold in a special account for the benefit of the Trustee or the Individual Trustee, as the case may be, in their individual capacities, and of the indenture security holders, as defined in subdivision E of this
Section 12.09:

1. an amount equal to any and all reductions in the amount due and owing to the Trustee or the Individual Trustee, as the case may be, upon any claim as such creditor in respect of principal or interest, effected after the beginning of such four months' period and valid as against the Company and its other creditors except any such reduction resulting from the receipt or disposition of any property described in paragraph 2. of this subdivision A., or from the exercise of any right of setoff which the Trustee or the Individual Trustee, as the case may be, could have exercised if a petition in bankruptcy had been filed by. or against the Company upon the date of such default; and

2. all property received by the Trustee or the Individual Trustee, as the case may be, in respect of any claim as such creditor, either as security therefor or in satisfaction or composition thereof or otherwise, after the beginning of such four months' period or an amount equal to the proceeds of any such property, if disposed of, subject, however, to the rights, if any, of the Company and its other creditors in such property or such proceeds.

B. Nothing contained in this Section 12.09 shall affect the right of the Trustee or the Individual Trustee, as the case may be:

1. to retain for its or his own account a) payments made on account of any such claim described in subdivision A. of this Section 12.09 by any person, other than the Company, who is liable thereon, and
b) the proceeds of the bona fide sale of any such claim by the Trustee or the Individual Trustee, as the case may be, to a third person, and
c) distributions made in cash, securities or other property in respect of claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Bankruptcy Act or applicable State law;

2. to realize, for its or his own account, upon any property held by the Trustee or the Individual Trustee, as the case may be, as security for any such claim, if such property was so held prior to the beginning of such four months' period;

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3. to realize, for its or his own account, but only to the extent of the claim hereinafter mentioned, upon any property held by the Trustee or the Individual Trustee, as the case may be, as security for any such claim, if such claim was created after the beginning of such four months' period and such property was received as security therefore simultaneously with the creation thereof, and if the Trustee or the Individual Trustee, as the case may be, shall sustain the burden of proving that at the time such property was so received the Trustee or the Individual Trustee, as the case may be, had no reasonable cause to believe that a default, as defined in subdivision E. of this Section 12.09, would occur within four months; or

4. to receive payment on any claim referred to in paragraphs
2. or 3. of this subdivision B. against the release of any property held as security for any such claim as provided in such paragraphs 2. or 3., as the case may be, to the extent of the fair value of such property.

For the purposes of paragraphs 2., 3. and 4. of this subdivision B., property substituted after the beginning of such four months' period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any such claim referred to in paragraphs 2.,
3. and 4. of this subdivision B. is created in renewal of or in substitution for or for the purpose of repaying or refunding any preexisting claim of the Trustee or the Individual Trustee, as the case may be, as such creditor, such claim shall have the same status as such preexisting claim of the Trustee or the Individual Trustee, as the case may be.

C. If the Trustee or the Individual Trustee, as the case may be, shall be required to account, as in this Section 12.09 provided, the funds and property held in such special account and the proceeds thereof shall be apportioned between the Trustee or the Individual Trustee and the indenture security holders in such manner that the Trustee or the Individual Trustee, as the case may be, and the indenture security holders realize, as a result of payments from such special account and payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Bankruptcy Act or applicable State law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee or the Individual Trustee, as the case may be, anything on account of the receipt by the Trustee or the Individual Trustee, as the case may be, from the Company of the funds and property in such special account and before crediting to the respective claims of the Trustee or the Individual Trustee, as the case may be, and the indenture security holders dividends on

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claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the Bankruptcy Act or applicable State law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this subdivision C. with respect to any claim the term "dividends" shall include any distribution with respect to such claim in bankruptcy or receivership or in proceedings for reorganization pursuant to the Bankruptcy Act or applicable State law, whether such distribution is made in cash, securities, or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership, or proceeding for reorganization is pending shall have jurisdiction 1. to apportion between the Trustee or the Individual Trustee, as the case may be, and the indenture security holders in accordance with the provisions of this subdivision C., the funds and property held in such special account and the proceeds thereof, or 2. in lieu of such apportionment, in whole or in part, to give to the provisions of this subdivision C. due consideration in determining the fairness of the distributions to be made to the Trustee or the Individual Trustee, as the case may be, and the indenture security holders with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this subdivision C. as a mathematical formula.

D. In case the Trustee or the Individual Trustee, as the case may be, shall have resigned or been removed after the beginning of such four months' period, it or he shall nevertheless be subject to the provisions of this Section 12.09 as though such resignation or removal had not occurred. If the Trustee or the Individual Trustee, as the case may be, shall have resigned or been removed prior to the beginning of such four months' period, it or he shall nevertheless be subject to the provisions of this Section 12.09, if and only if the receipt of property or reduction of claim which would have given rise to the obligation to account, if the Trustee or the Individual Trustee, as the case may be, had continued as such Trustee or Individual Trustee, occurred after the beginning of such four months' period and within four months after such resignation or removal.

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E. As used in this Section 12.09 the term "default" means any failure to make payment in full of principal or interest, when and as the same becomes due and payable, upon the bonds outstanding under any indenture which has been qualified under the Trust Indenture Act of 1939, and under which the Trustee or the Individual Trustee is also a trustee and the Company is obligor.

As used in this Section 12.09 the term "indenture security holders" means all holders of securities outstanding under any such indenture under which any default exists.

In the event that any person shall at any time become an obligor upon any of the indenture securities, so long as such person shall continue to be such obligor the provisions of this Section 12.09, in addition to being applicable to the Trustee, the Individual Trustee and the Company, shall be applicable to the Trustee, the Individual Trustee and such obligor with the same effect as if the name of such obligor were substituted for the Company in this
Section 12.09.

F. Neither the Trustee nor the Individual Trustee shall be required to account, as provided in this Section 12.09, if the creditor. relationship arises from:

1. the ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee or the Individual Trustee, as the case may be;

2. advances authorized by a receivership or bankruptcy court of competent jurisdiction, or by the terms and provisions of this Indenture, for the purpose of preserving the property subject to the lien hereof or of discharging tax liens or other prior liens or encumbrances on the trust estate, if notice of such advance and of the circumstances surrounding the making thereof is given to the indenture security holders, as defined in subdivision E. of this Section 12.09, at the time and in the manner provided in this Indenture;

3. disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depository, or other similar capacity;

4. an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction, as defined in this Section 12.09;

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5. the ownership of stock or of the other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company or any other obligor upon the bonds issued under this Indenture; or

6. the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations, which fall within the classification of self-liquidating paper, as defined in this Section 12.09.

The word "security" or "securities," as used in this subdivision F., shall have the meaning assigned to the said term in the Securities Act of 1933, as in effect on the date of this Indenture.

The term "cash transaction," as used in this subdivision F. means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand.

The term "self-liquidating paper," as used in this subdivision F., means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the obligor for the purpose of financing the purchase, processing, manufacture, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of or a lien upon the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares and merchandise previously constituting the security, provided the security is received by the Trustee or the Individual Trustee simultaneously with the creation of the creditor relationship with the obligor arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.

SECTION 12.10. A. The Trustee shall, so long as any bonds are outstanding hereunder, transmit to the bondholders, as hereinafter provided, within sixty days after February 1 of each year beginning with the year 1945, a brief report as of such February 1 with respect to:

1. the eligibility of the Trustees under Section 12.05 hereof, and their qualification under Section 12.05 hereof, or in lieu thereof, if to the best of their knowledge they have continued to be eligible and qualified under such sections, a written statement to such effect;

2. the character and amount of any advances (and if they elect so to state, the circumstances surrounding the making thereof) made by them respectively as Trustees hereunder which remain unpaid on the date of such report, and for the reimbursement of which they or either of

them

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claim or may claim a lien or charge, prior to that of the bonds, on the trust estate or on property or funds held or collected by them respectively, as Trustees, if such advances so remaining unpaid aggregate more than one-half of one per cent (1/2 of 1%) of the principal amount of the bonds outstanding on such date;

3. the amount, interest rate and maturity date of all other indebtedness owing to them, respectively, in their individual capacities, on the date of such report, by the Company and by any other obligor upon the bonds, with a brief description of any property held as collateral security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in paragraphs
2., 3., 4. or 6. of subdivision F. of Section 12.09 hereof;

4. the property and funds physically in the possession of the Trustee and the Individual Trustee, respectively, in such capacities on the date of such report, or of a depository for them respectively;

5. any release, or release and substitution, of property subject to the lien of this Indenture (and the consideration therefor, if any) which they have not previously reported; provided, however, that to the extent that the aggregate value as shown by the release papers of any or all of such released properties does not exceed an amount equal to one percent (1%) of the principal amount of bonds then outstanding, the report need only indicate the number of such releases, the total value of property released as shown by the release papers, the aggregate amount of cash received and the aggregate value of property received in substitution therefor as shown by the release papers;

6. any additional issue of bonds hereunder which they have not previously reported; and

7. any action taken by the Trustees or either of them in the performance of their duties under this Indenture which they have not previously reported and which in their opinion materially affects the bonds or the trust estate, except action in respect of a default, notice of which has been or is to be withheld by the Trustees in accordance with Section 12.03 hereof.

B. The Trustees shall, so long as any bonds shall be outstanding hereunder, also transmit to the bondholders, as hereinafter provided, within the times hereinafter specified, a brief report with respect to:

1. the release, or release and substitution, of property subject to the lien of this Indenture (and the consideration therefor, if any) unless the fair value of such property, as set forth in the engineer's certificate required in connection with any release or substitution hereunder, is less than ten per cent (10%) of the principal amount of the bonds outstanding at the time of such release, or such release and substitution, such report to be SO transmitted within ninety days after such time; and

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2. the character and amount of any advances (and if they elect so to state, the circumstances surrounding the making thereof) made by them, respectively, as such Trustees, since the date of the last report transmitted pursuant to the provisions of subdivision A. of this
Section 12.10 (or if no such report has been so transmitted, since March 1, 1944) for the reimbursement of which they or either of them claim or may claim a lien or charge prior to that of the bonds, on the trust estate or on property or funds held or collected by the Trustees, as such, and which they had not previously reported pursuant to this paragraph, if such advances remaining unpaid at any time aggregate more than ten per cent (10%) of the principal amount of bonds outstanding at such time, such report to be so transmitted within ninety days after such time.

C. All reports required by this Section 12.10, and all other reports or notices which are required by any other provision of this Indenture to be transmitted in accordance with the provisions of this Section 12.10, shall be transmitted by mail:

1. to all registered owners of bonds, as the names and addresses of such owners appear upon the registration books of the Company;

2. to such holders of bonds as have, within the two years preceding such transmission, filed their names and addresses with the Trustee for that purpose; and

3. except in the case of reports pursuant to subdivision B. of this Section 12.10, to all holders of bonds whose names and addresses are preserved at the time by the Trustee pursuant to subdivision A. of
Section 12.11 hereof.

D. The Trustees shall, at the time of the transmission to the bondholders of any report or notice pursuant to this Section 12.10, file a copy thereof with each stock exchange, if any, upon which the bonds are listed and with the Securities and Exchange Commission. Upon the listing of the bonds or any series thereof upon any stock exchange the Company shall so advise the Trustee.

SECTION 12.11. A. The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of bonds 1. contained in the most recent list, if any, furnished to it as provided in subdivision E. of Section 5.17 hereof, 2. received by it in the capacity of paying agent hereunder, and 3. filed with it within the two immediately preceding years by holders of bonds for the purpose of receiving reports pursuant to the provisions of paragraph 2. of subsection C. of Section 12.10 hereof.

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The Trustee may a) destroy any list furnished to it as provided in subdivision E. of Section 5.17 hereof upon receipt of a new list so furnished,
b) destroy any information received by it as paying agent upon delivering to itself as Trustee, not earlier than forty-five days after an interest payment date of the bonds, a list containing the names and addresses of the holders of bonds obtained from such information since the delivery of the next previous list, if any, c) destroy any list delivered to itself as Trustee which was compiled from information received by it as paying agent upon the receipt of a new list so delivered, and d) destroy any information filed with it by holders of bonds for the purpose of receiving reports pursuant to the provisions of paragraph 2. of subsection C. of Section 12.10 hereof, but not until two years after such information has been filed with it.

B. Within five business days after receipt by the Trustee of a written application by any three or more bondholders stating that the applicants desire to communicate with other bondholders with respect to their rights under this Indenture or under the bonds, and accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, and by reasonable proof that each such applicant has owned a bond or bonds for a period of at least six months preceding such application, the Trustee shall, at its election, either 1. afford to such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subdivision A. of this
Section 12.11, or 2. inform such applicants as to the approximate number of bondholders whose names and addresses appear in the information preserved at the time by the Trustee in accordance with the provisions of subdivision A. of this
Section 12.11, and as to the approximate cost of mailing to the bondholders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford to such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to all bondholders whose names and addresses appear in the information preserved at the time by the Trustee in accordance with the provisions of subdivision A. of this Section 12.11, copies of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and the payment, or provision for the payment, of the reasonable expenses of such mailing, unless within five days after such tender, the Trustee shall mail to such applicants, and file with the Securities and Exchange Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary

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to the best interests of the bondholders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Securities and Exchange Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, said Commission shall find, after notice and opportunity for a hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such bondholders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application.

Within five business days after receipt by the Trustee of the written application from bondholders desiring to communicate with other bondholders, hereinabove referred to, the Trustee shall notify the Company in writing of the receipt of such application and shall furnish the Company with a copy thereof, and shall advise the Company what action the Trustee has taken or proposes to take with respect to said application. In case the Trustee shall file with the Securities and Exchange Commission a written statement as hereinabove provided, the Trustee shall, within five days after the filing of such statement, notify the Company in writing of such filing and furnish the Company with a copy of such statement, and shall advise the Company promptly of any notice or other communications received from the Securities and Exchange Commission relating to said statement.

The Trustee shall not be liable or accountable to the Company or to any bondholder by reason of the disclosure of any such information as to the names and addresses of the bondholders in accordance with the provisions of this
Section 12.11, regardless of the source from which such information was derived, nor by reason of the mailing of any material pursuant to a request made under this Section 12.11.

SECTION 12.12. Subject to the provisions of Sections 12.04, 12.09 and 12.10 hereof, the Trustee and the Individual Trustee may each acquire and hold bonds and coupons and otherwise deal with the Company in the same manner and to the same extent and with like effect as though they were not Trustees hereunder.

SECTION 12.13. The Trustees may comply with any rule, regulation or order of the Securities and Exchange Commission made pursuant to the terms and

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provisions of the Trust Indenture Act of 1939 and shall be fully protected in so doing in good faith notwithstanding that such rule, regulation or order may thereafter be amended or rescinded or determined by judicial or other authority to be invalid for any reason, but nothing herein contained shall require the Trustees to take any action or omit to take any action in accordance with such rule, regulation or order, except as in this Indenture otherwise required.

SECTION 12.14. All the estate, right, title and interest in and to the trust estate by the provisions of this Indenture or of any indenture supplemental hereto conveyed or assigned or transferred to the Trustees, is conveyed, assigned and transferred to them as joint tenants and not as tenants in common.

Any notice, request, or other writing by or on behalf of the Company or any of the bondholders, delivered solely to the Trustee, shall be deemed to have been delivered to both of the Trustees hereunder as effectually as if delivered to each of them.

All cash collected by, or payable to, the Trustees or either of them shall be paid to, and deposited with, and all bonds and other obligations or securities shall be held by the Trustee, except as otherwise required by law. Any moneys at any time coming into the hands of the Individual Trustee shall be at once paid over to the Trustee.

Whenever any moneys, bonds, or other obligations or securities are, under any provision of this Indenture paid or delivered to, or deposited with, the Trustee, title to the same shall be deemed to be vested in both Trustees hereunder, but nothing in this Section 12.14 contained shall be deemed to affect or impair any power or right conferred by any provision of this Indenture upon the Trustee to apply, disburse or otherwise act or deal with respect to any moneys, bonds or other obligations or securities received or held by it as aforesaid. So long as the bonds, obligations or other securities subject to the lien of this Indenture shall remain so subject, any instrument to be executed under the mortgage or other instrument securing the same by the holders of such bonds, obligations or other securities may be executed by, and any action to be taken thereunder may be taken by, the Trustee.

Any request in writing by the Trustee to the Individual Trustee shall, subject to the provisions of Section 12.02 hereof, be a sufficient warrant for the Individual Trustee to take such action as may be requested.

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The Individual Trustee or any successor, so far as permitted by law, may at any time delegate to the Trustee or any successor the right to exercise any and all power, discretionary or otherwise, conferred by any of the provisions of this Indenture.

Said Robert T. Kirchner (successor to Ralph E. Morton) has been joined as Individual Trustee in order to comply with any legal requirements respecting trustees under deeds of trust of property in any state in which the mortgaged property or part thereof is or may in the future be situate, and shall as such Individual Trustee possess such powers, and such powers only, as may be necessary to comply with such requirements. If by reason of the repeal of such requirements, or for any other reason, it shall not be necessary in the opinion of counsel (which opinion shall be filed with the Trustee), that one of the Trustees hereunder be an individual, and the Company shall file with the Trustee a written request for the removal of the Individual Trustee, said Robert T. Kirchner (successor to Ralph E. Morton) or any successor, shall forthwith cease to be a trustee hereunder, and all powers of the Individual Trustee and all his right, title or interest in and to the trust estate shall forthwith terminate; and, unless and until there shall be appointed a new trustee as successor to the Individual Trustee, all the right, title and powers of the Trustees shall devolve upon the Trustee and its successors alone.

Subject to the provisions of the following paragraph, in the event that it may be necessary for the Trustee to enforce any of the provisions of this Indenture in any state by court proceedings or in any other manner, the Trustee may, by writing, authorize the Individual Trustee in his name as trustee to take such action or institute such proceedings as may be appropriate under the provisions of the Indenture, without joining the Trustee as a party thereto, and in such event the Individual Trustee shall be vested with all the rights, powers and duties of the Trustee hereunder, and may enforce the same in his name as Individual Trustee in the manner provided in this Indenture, without joinder of the Trustee in any action or proceeding so taken.

Any and all rights, powers, duties and obligations by any provisions of this Indenture conferred or imposed upon the Trustees may be exercised and performed by the Trustee alone without reference to the Individual Trustee insofar as permitted by law, and the Individual Trustee hereby irrevocably constitutes and appoints the Trustee his true and lawful attorney in fact with full power and authority, insofar as permitted by law, either in the name and

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on behalf of the Trustee alone, or of the Trustees jointly, to exercise any and all rights or powers conferred upon the Individual Trustee alone, or upon the Trustees jointly, by any of the provisions of this Indenture, but subject to the duties and obligations hereby imposed upon the Individual Trustee, with full power of substitution and revocation, hereby ratifying and confirming all and singular the acts and things lawfully done by the Trustee or any substitute by virtue of this power of attorney. Any and all rights, powers, duties and obligations by any provisions of this Indenture or imposed upon the Trustees or the Trustee which may not be exercised and performed by the Trustee alone, or by the Individual Trustee and the Trustee jointly, may and shall be exercised and performed by the Individual Trustee alone, to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or unqualified to perform such act or acts, without reference to the Trustee.

SECTION 12.15. At any time or times, for the purpose of conforming to any legal requirements, restrictions or conditions in any state in which any part of the trust estate may be located, or if the Trustee shall be advised by counsel that it is necessary or prudent in the interest of the bondholders so to do, the Company and the Trustee shall have the power to appoint, and upon the request of the Trustee the Company shall for such purpose join with the Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, another corporation or one or more persons approved by the Trustee either to act as co-trustee or co-trustees of all or any part of the trust estate jointly with the Trustee, or to act as separate trustee or trustees of any part of the same, and in any case with all such powers, rights and duties not inconsistent herewith, as may be specified in the instrument or instruments of appointment, and for such term, as may be specified in the instrument or instruments of appointment, such powers, rights and duties in whole or in part to be exercised either jointly with the Trustees or separately, as such instrument or instruments may prescribe. In the event that the Company shall not have joined in the execution of such instrument or instruments within ten days after the receipt of a written request from the Trustee so to do, the Trustee alone shall have power to effect such appointment. With respect to such powers as are conferred by every such instrument or instruments of appointment, any co-trustee or co-trustees or separate trustee or trustees so appointed shall be subject to all obligations which are imposed upon the Trustees by this Indenture or by law.

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Every separate trustee, every co-trustee and every successor trustee, other than any trustee which may be appointed as successor to Citibank, N.A. (successor to City Bank Farmers Trust Company) or its successor in the trust hereunder, or as successor to Robert T. Kirchner (successor to Ralph E. Morton) or his successor in the trust hereunder, shall, to the extent permitted by law, be appointed subject to the following provisions and conditions, namely:

A. The bonds shall be authenticated and delivered, and all powers, duties, obligations and rights, conferred upon the Trustee in respect of the custody of all bonds and other securities and of all cash pledged or deposited hereunder shall be exercised solely by Citibank, N.A. (successor to City Bank Farmers Trust Company) or its successors in the trust hereunder, except that if for any reason any prior lien bonds or other securities shall be deposited with a co-trustee, such prior lien bonds or other securities shall be held and disposed of by such co-trustee pursuant to the written instructions of the Trustee, and all powers, rights, duties, immunities and obligations by this Indenture conferred upon the Trustee or Trustees, whether so expressed or not, unless otherwise provided in the instrument appointing such co-trustee, may be exercised, performed or enjoyed by such co-trustee upon written instructions from the Trustee, and any securities required by this Indenture to be deposited with the Trustee may be deposited with such co-trustee to be held, disposed of, cancelled and/or released by such co-trustee only upon written instructions from the Trustee;

B. The Company and the Trustee, at any time by an instrument in writing executed by them jointly, may remove any trustee or co-trustee appointed under this Section 12.15, and may likewise and in like manner appoint a successor to such trustee or co-trustee so removed, anything herein contained to the contrary notwithstanding. In the event that the Company shall not have joined in the execution of such instrument within ten days after the receipt of a written request from the Trustee so to do, the Trustee alone shall have power to effect such removal and to make such appointment, as the case may be. In the event that the Trustee alone shall have appointed a separate trustee or trustees or co-trustee or co-trustees as above provided, it may at any time, by an instrument in writing, remove any such separate trustee or co-trustee, the successor to any such trustee or co-trustee so removed to be appointed by the Company and the Trustee, or by the Trustee alone, as hereinbefore in this Section 12.15 provided;

C. Any notice, request or other writing, by or on behalf of the holders of the bonds, delivered to the Trustee, or its successor in the trust then acting, shall be deemed to have been delivered to all of the then trustees

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or co-trustees as effectually as if delivered to each of them. Every instrument appointing any trustee or trustees other than a successor to the Trustee or the Individual Trustee shall refer to this indenture and the conditions in this Article XII expressed, and upon the acceptance in writing by such trustee or trustees or co-trustee or co-trustees, he, they or it shall be vested with the estates or property specified in such instrument, either jointly with the Trustee and/or the Individual Trustee, or separately, as may be provided therein, subject to all the trusts, conditions and provisions of this Indenture; and every such instrument shall be filed with the Trustee. Any separate trustee or trustees or any co-trustee or co-trustees, so far as permitted by law, may delegate to the Trustee the right to exercise any power, discretionary or otherwise, conferred by any of the provisions of this Indenture. Any separate trustee or trustees or co-trustee or co-trustees, or a successor to any of them, may resign at any time by delivering a written resignation to the Trustee. In case any separate trustee or trustees or co-trustee or co-trustees, or a successor to any of them, shall die, become incapable of acting, resign, or be removed, all the estate, property, rights, powers, trusts, duties and obligations of said separate trustee or co-trustee, so far as permitted by law, shall vest in and be exercised by, the Trustee and/or the Individual Trustee, without the appointment of a new trustee as successor to such separate trustee or co-trustee. Any request in writing by the Trustee to any separate trustee or trustees or co-trustee or co-trustees or the successor in trust of any of them shall be a sufficient warrant for such trustee or trustees to take such action as may be so requested. Any moneys at any time coming into the hands of any such trustee shall at once be paid over to the Trustee; and

D. The provisions of Sections 12.02, 12.03, 12.04, 12.09 and 12.10 hereof shall apply to any such co-trustee or separate trustee.

SECTION 12.16. Notwithstanding any other provisions hereof, the Company, by instrument executed by order of its Board of Directors and duly acknowledged by its proper officers, may, if no event of default has occurred and is continuing, within the period beginning January 1, 1998, and ending December 31, 1998, and the comparable period in each succeeding decade, appoint any corporation eligible under the provisions of Section 12.05 hereof and qualified under
Section 12.04 hereof, and doing business in the United States of America, as Trustee in succession to the Trustee as of the date of such appointment and the corporation so appointed Trustee shall thereupon become successor Trustee hereunder until a new Trustee shall be appointed by the bondholders as authorized herein.

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ARTICLE XIII.

CONSOLIDATION, MERGER, CONVEYANCE AND LEASE.

SECTION 13.01. Nothing in this Indenture shall prevent any consolidation of the Company with, or merger of the Company into, any corporation having corporate authority to acquire the trust estate, or substantially all the trust estate, as an entirety, or any conveyance, transfer or lease, subject to the lien of this Indenture, of all or substantially all of the trust estate as an entirety to any corporation lawfully entitled to acquire or lease or operate the same; provided, however, and the Company covenants and agrees, that such consolidation, merger, conveyance, transfer or lease shall be upon such terms, as fully to preserve and in no respect to impair the lien or security of this Indenture, or any of the rights or powers of the Trustees or the bondholders hereunder; and provided, further, that any such lease shall be made expressly subject to immediate termination by the Company or by the Trustees at any time during the continuance of an event of default, and also by the purchaser of the property so leased at any sale thereof hereunder, whether such sale be made under the power of sale hereby conferred or under judicial proceedings; and provided, further, that, upon any such consolidation, merger, conveyance or transfer, or upon any such lease the term of which extends beyond the date of maturity of any of the bonds secured hereby, the due and punctual payment of the principal and interest of all said bonds according to their tenor and the due and punctual performance and observance of all the covenants and conditions of this Indenture to be kept or performed by the Company shall be expressly assumed by an instrument in writing executed and delivered to the Trustees by the corporation formed by such consolidation or into which such merger shall have been made, or acquiring all or substantially all the trust estate as an entirety, as aforesaid, or by the lessee under any such lease the term of which extends beyond the date of maturity of any of the bonds secured hereby, and provided further that the Company shall have delivered to the Trustee an officers' certificate and an opinion of counsel, each of which shall state that such consolidation, merger, conveyance, transfer or lease and the supplemental indenture referred to in Section 13.02 comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

SECTION 13.02. In case the Company, as permitted by Section 13.01 hereof, shall be consolidated with or merged into any other corporation or shall convey or transfer, subject to the lien of this Indenture, all or substantially all

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the trust estate as an entirety, the successor corporation formed by such consolidation, or into which the Company shall have been merged, or which shall have received a conveyance or transfer as aforesaid - upon executing with the Trustees and causing to be recorded an indenture whereby such successor corporation shall assume and agree to pay, duly and punctually, the principal of and interest on the bonds issued hereunder in accordance with the provisions of said bonds, and coupons and this Indenture, and shall agree to perform and fulfill all the covenants and conditions of this Indenture to be kept or performed by the Company - shall succeed to and be substituted for the Company with the same effect as if it had been named herein, and shall have and may exercise under this Indenture the same powers and rights as the Company, and (without limiting or impairing by the enumeration of the same the scope and intent of the foregoing general powers and rights) such successor corporation thereafter may cause to be executed, authenticated and delivered, either in its own name or in the name of Michigan Consolidated Gas Company, as its name is now or shall then exist, in respect of property of the character defined in Article I hereof as property additions, such bonds as could or might have been executed, issued and delivered by the Company had it acquired such property of such character by purchase on or after the date of such consolidation, merger, conveyance, transfer or lease, and had such consolidation, merger, conveyance or transfer not occurred, and upon the order of such successor corporation in lieu of the Company, and subject to all the terms, conditions and restrictions in this Indenture prescribed, concerning the authentication and delivery of bonds, the Trustee shall authenticate and deliver any bonds delivered to it for authentication which shall have been previously signed by the proper officers of the Company, and such bonds as the successor corporation shall thereafter, in accordance with the provisions of this Indenture, cause to be executed and delivered to the Trustee for such purpose, and such successor corporation shall also have and may exercise in respect of the property of such character, and subject to all the terms, conditions and restrictions in this Indenture prescribed applicable thereto, whether as to withdrawal of cash, release of property, or otherwise, the same powers and rights which the Company might or could exercise had it acquired the property of such character by purchase on or after the date of such consolidation, merger, conveyance or transfer, and had such consolidation, merger, conveyance or transfer not occurred. All the bonds so issued or delivered by such successor corporation shall in all respects have the same legal right and security as the bonds theretofore issued or delivered in accordance

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with the terms of this Indenture as though all of said bonds had been authenticated and delivered at the date of the execution hereof. As a condition precedent to the execution by such successor corporation and the authentication and delivery by the Trustee of any such additional bonds or the withdrawal of cash or release of property, under any of the provisions of this Indenture, on the basis of property of the character defined in this Indenture as property additions acquired, made or constructed by the successor corporation, the indenture with the Trustees to be executed and caused to be recorded by the successor corporation as in this Section provided, or a subsequent indenture, shall contain a conveyance or transfer and mortgage in terms sufficient to subject such property to the lien hereof.

SECTION 13.03. In case the Company, as permitted by Section 13.01 hereof, shall be consolidated with or merged into any other corporation, or shall convey, transfer or lease, subject to the lien of this Indenture, all or substantially all the trust estate as an entirety as aforesaid, neither this Indenture nor the indenture with the Trustees to be executed and caused to be recorded by the successor corporation as in Section 13.02 hereof provided shall, unless such indenture shall otherwise provide, become or be required to become or be a lien upon any of the properties or franchises then owned or thereafter acquired by the successor corporation (by purchase, consolidation, merger, donation, construction, erection or in any other way) except A. those acquired by it from the Company, and improvements, extensions and additions thereto and renewals and replacements thereof, B. the property made and used by the successor corporation as the basis under any of the provisions of this Indenture for the authentication and delivery of additional bonds or the withdrawal of cash or the reduction of cash to be deposited with the Trustee or the release of property, and C. such franchises, repairs and additional property as may be acquired, made or constructed by the successor corporation 1. to maintain, renew and preserve the franchises covered by this Indenture, or 2. to maintain the property mortgaged and intended to be mortgaged hereunder as an operating system or systems in good repair, working order and condition, or 3. in rebuilding or renewal of property subject to the lien hereof damaged or destroyed, or 4. in replacement of or substitution for machinery, apparatus, equipment, frames, towers, poles, wire, pipe, tools, implements or furniture, or any other fixtures or personalty, subject to the lien hereof, which shall have become old, inadequate, obsolete, worn out, unfit, unadapted, unserviceable, undesirable or unnecessary for use in the operation of the property mortgaged and intended to be mortgaged hereunder.

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ARTICLE XIV.

MEETINGS OF BONDHOLDERS.

SECTION 14.01. Modifications and alterations of this Indenture and/or of any indenture supplemental hereto and/or of the rights and obligations of the Company and/or of the holders of the bonds and coupons may be made, and compliance with this Indenture or any such supplemental indenture may be waived, as hereinafter provided in this Article XIV.

SECTION 14.02. The Trustee may at any time call a meeting of the bondholders and it shall call such a meeting on written request of the holders of not less than a majority in principal amount of the bonds outstanding hereunder at the time of such request. The Company, pursuant to a certified resolution of its Board of Directors, may also call a meeting of the bondholders at any time. In each such case the purpose or purposes of such meeting shall be set forth in reasonable detail. In the event of the Trustee's failing for ten days to call a meeting after being thereunto requested by the bondholders as above set forth, holders of outstanding bonds in the amount above specified in this Section 14.02 or the Company, pursuant to certified resolution of its Board of Directors, may call such meeting. Every such meeting called by and at the instance of the Trustee shall be held in Detroit, Michigan, or the Borough of Manhattan, The City of New York, New York, or with the written approval of the Company, at any other place in the United States of America, and notice thereof, stating the place and time thereof and in general terms the business to be submitted, shall be mailed by the Trustee not less than thirty days before such meeting A. to all holders of bonds the names and addresses of whom are then preserved as required by this Indenture, and B. to the Company addressed to it at the address of its principal executive offices (or at such other address as may be designated by the Company from time to time), and, unless all bonds outstanding hereunder are at the time registered as to principal, shall be published by the Trustee once preceding the meeting, in an authorized New York newspaper, the publication to be not less than twenty days prior to the date of such meeting; provided, however, that the mailing of such notice to any bondholders shall in no case be a condition precedent to the validity of any action taken at such meeting, and provided further, however, that if all bonds then outstanding shall be registered, no notice need be given except by mail in accordance with subdivision C. of Section 12.10 hereof. If such meeting is called by or at the instance either of the Company or of the bondholders, it shall be held at such place in the United States of America as may be specified

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in the notice calling such meeting and notice thereof shall be sufficient for all purposes hereof if given by newpaper publication as aforesaid stating the place and time of the meeting and in general terms the business to be submitted. Any meeting of bondholders shall be valid without notice if the holders of all bonds then outstanding hereunder are present in person or by proxy and if the Company and the Trustee are present by duly authorized representatives, or if notice is waived in writing before or after the meeting by the Company, the holders of all bonds outstanding hereunder and by the Trustee, or by such of them as are not present in person or by proxy.

Anything in this Article XIV notwithstanding, the Trustee may, and upon request of a majority of the bondholders shall, and the Company in case the meeting is called by it may, fix a day not exceeding ninety days preceding the date for which the meeting is called as a record date for the determination of owners of coupon bonds registered as to principal and owners of registered bonds without coupons entitled to notice of and to vote at such meeting and any adjournment thereof and only such registered owners who shall have been such registered owners on the date so fixed, and who are entitled to vote such registered bonds at the meeting, shall be entitled to receive notice of such meeting, and (except as to bonds exchanged for bonds payable to bearer as to which a certificate is in effect pursuant to Section 14.03 hereof) the coupon bonds registered as to principal on such record date and the registered bonds without coupons may be voted at such meeting and any adjournment thereof only by the owners, and their proxies, who shall have been registered owners of such bonds on such record date, notwithstanding any transfer of any such bonds on the books of the Company after such date. If any coupon bonds registered as to principal on such record date or any registered bonds without coupons shall thereafter be transferred to bearer or exchanged for coupon bonds, as the case may be, a suitable notation may be made upon such bonds at the time of their transfer from such registered owner's name or at the time of such exchange, as the case may be, to record the fact that the registered owner of such bonds on said record date and his proxies shall be the only persons entitled to vote such bonds at the meeting. If any coupon bonds on such record date are thereafter registered as to principal and before any certificate as provided in Section 14.03 has been issued with respect to such bonds, the first registered owner in whose name such bonds are registered as to principal shall be deemed to have been a registered owner of such bonds on the record date for the purposes of this Article XIV, except as to his right to receive notice of such meeting.

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SECTION 14.03. Officers and nominees of the Trustee and of the Company or their or its nominees may attend such meeting, but shall not as such be entitled to vote thereat. Attendance by bondholders may be in person or by proxy and, unless specifically prohibited by law, any such proxy shall remain in effect unless specifically revoked and shall be binding on any future holder of the bonds represented by such proxy, unless specifically revoked by any such future holder before being voted. In order that the holder of any bond payable to bearer and his proxy may attend and vote without producing his bond, the Trustee, with respect to any such meeting, may make and from time to time vary such regulations as it shall think fit for deposit of bonds with, or the stamping of bonds by, A. any banks, bankers or trust or insurance companies having a capital of not less than five hundred thousand dollars ($500,OOO) or B. any trustee of any pension, welfare, hospitalization or similar fund or funds having an aggregate corpus in excess of five million dollars ($5,000,000), or C. the United States of America, any Territory thereof, the District of Columbia, any State of the United States, any municipality in any State of the United States or any public instrumentality of the United States, any State or Territory, or D. by any other person or corporation satisfactory to the Trustee, and for the issue to the persons depositing the same of certificates by such depositaries entitling the holders thereof to be present and vote at any such meeting and to appoint proxies to represent them and vote for them at any such meeting as if the persons so present and voting, either personally or by proxy, were the actual bearers of the bonds in respect of which such certificates shall have been issued and any regulations so made shall be binding and effective. A bondholder in any of the foregoing categories may sign such certificate in his own behalf. In lieu of or in addition to providing for such deposit, the Trustee may, in its discretion, permit such institutions to issue certificates stating that bonds were exhibited to them, which certificates shall entitle the holders thereof to vote at any meeting only if the bonds with respect to which they are issued are not produced at the meeting by any other person and are not at the time of meeting registered in the name of any other person. Each such certificate shall state the date on which the bond or bonds in respect of which such certificate shall have been issued were deposited with or submitted to such institution and the series, maturities and serial numbers of such bonds. In the event that two or more such certificates shall be issued with respect to any bond or bonds, the certificate bearing the latest date shall be recognized and be deemed to supersede any certificate or certificates previously issued with respect to such bond or bonds. If any such meeting shall have been

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called under the provisions of Section 14.02, by bondholders or by the Company, and the Trustee shall fail to make regulations as above authorized, then regulations to like effect for such deposit, stamping or exhibition of bonds and the issue of certificates by 1. any bank, banker or trust or insurance company organized under the laws of the United States of America or of any State thereof, having a capital of not less than five hundred thousand dollars ($500,000), or 2. any trustee of any pension, welfare, hospitalization, or similar fund or funds having an aggregate corpus in excess of five million dollars ($5,000,000), or 3. by the United States of America, any Territory thereof, the District of Columbia, any State of the United States, any municipality in any State of the United States or any public instrumentality of the United States, any State or Territory shall be similarly binding and effective for all purposes hereof if adopted or approved by the bondholders calling such meeting or by the Board of Directors of the Company, if such meeting shall have been called by the Company, provided that in either such case copies of such regulations shall be filed with the Trustee. A bondholder in any of the foregoing categories may sign such a certificate in his own behalf.

SECTION 14.04. Subject to the restrictions specified in Sections 14.03 and 14.07 hereof, any registered holder of bonds outstanding hereunder and any holder of a certificate (not superseded) provided for in Section 14.03 hereof, shall be entitled in person or by proxy to attend and vote at such meeting as holder of the bonds registered or certified in the name of such holder without producing such bonds. All others seeking to attend or vote at such meeting in person or by proxy must, if required by an authorized representative of the Trustee or the Company or by any other bondholder, produce the bonds claimed to be owned or represented at such meeting, and everyone seeking to attend or vote shall, if required as aforesaid, produce such further proof of bond ownership or personal identity as shall be satisfactory to the authorized representative of the Trustee, or if none be present then to the inspectors of votes hereinafter provided for. Proxies shall be witnessed or in the alternative may A. have the signature guaranteed by a bank or trust company or a registered dealer in securities, B. be acknowledged before a notary public or other officer authorized to take acknowledgements, or C. have their genuineness otherwise established to the satisfaction of the inspectors of votes. All proxies and certificates presented at any meeting shall be delivered to said inspectors of votes and filed with the Trustee.

SECTION 14.05. Persons named by the Trustee if it is represented at the meeting shall act as temporary Chairman and Secretary, respectively, of the

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meeting, but if the Trustee shall not be represented or shall fail to nominate such persons or if any person so nominated shall not be present, the bondholders and proxies present shall by a majority vote, irrespective of the amount of their holdings, elect another person or other persons from those present to act as temporary Chairman and/or Secretary. A permanent Chairman and a permanent Secretary of such meeting shall be elected from those present by the bondholders and proxies present by a majority vote of bonds represented. The Trustee, if represented at the meeting, shall appoint two inspectors of votes who shall decide as to the right of anyone to vote and shall count all votes cast at such meeting, except votes on the election of a Chairman and Secretary, both temporary and permanent, as aforesaid and who shall make and file with the permanent Secretary of the meeting their verified written report in duplicate of all such votes so cast at said meeting. If the Trustee shall not be represented at the meeting or shall fail to nominate such inspectors of votes or if either inspector of votes fails to attend the meeting, the vacancy shall be filled by appointment by the permanent Chairman of the meeting.

SECTION 14.06. The holders of:

A. not less than sixty per cent (60%) in principal amount of the bonds outstanding hereunder when such meeting is held or

B. if the action proposed at said meeting solely adversely affects the rights of the holders of one or more, but less than all, series of bonds then outstanding, then at least sixty per cent (60%) in principal amount of those bonds then outstanding so to be adversely affected

(excluding in any case bonds disqualified from voting by reason of the Company's interest therein) must be present at such meeting in person or by proxy in order to constitute a quorum for the transaction of business, less than a quorum, however, having power to adjourn; provided, however, that if such meeting is adjourned by less than a quorum for more than thirty days, notice thereof shall be mailed as soon as practicable by the Trustee if such meeting shall have been called by the Trustee 1. to the Company addressed to it at the address of its principal executive offices (or at such other address as may be designated by the Company in writing from time to time), and 2. to all holders of bonds then outstanding hereunder, the names and addresses of whom are then preserved by the Trustee as required by the provisions of subdivision A. of Section 12.11 hereof, and, unless all bonds outstanding hereunder are at the time of such mailing registered as to principal, shall be published at least once

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in each thirty day period of such adjournment in an authorized New York newspaper, provided, however, that if all bonds then outstanding shall be registered, no notice need be given except by mail in accordance with subdivision C. of Section 12.10 hereof. Notwithstanding the foregoing, if a meeting is first adjourned by less than a quorum for less than thirty days and is again adjourned, no such notice need be mailed or published during the period of the first adjournment but such notice shall be mailed as soon as practicable by the Trustee after the second adjournment and, unless all bonds outstanding hereunder are at the time of such mailing registered as to principal, shall be published as aforesaid at least once in each thirty day period of the second adjournment and of any subsequent adjournments. The failure to mail such notice to any such bondholder as aforesaid shall in no case affect the validity of any action taken at any meeting held pursuant to such adjournment. If such meeting shall have been called, under the provisions of Section 14.02 of this Article, by bondholders or by the Company, notice of such adjournment shall be given by the permanent Chairman and permanent Secretary of the meeting in the newspaper and for the number of times above specified in this Section and shall be sufficient if so given.

SECTION 14.07. Subject to the provisions of Section 9.18 hereof, any modification or alteration of this Indenture (including any indenture supplemental hereto) and/or the rights and obligations of the Company and/ or the rights of the holders of bonds and/or coupons issued hereunder in any particular may be made, and compliance with this Indenture or any indenture supplemental hereto may be waived, at a meeting of bondholders duly convened and held in accordance with the provisions of this Article, but only by resolution duly adopted by the affirmative vote, in person or by proxy, of the holders of sixty per cent (60%) or more in principal amount of the bonds outstanding hereunder, provided that, if the rights of one or more, but less than all, series of bonds then outstanding are to be adversely affected by action taken at such meeting, only by affirmative vote of the holders of at least sixty per cent (60%) in principal amount of those bonds so to be adversely affected and outstanding hereunder, when such meeting is held, and in every case approved by resolution of the Board of Directors of the Company as hereinafter specified; provided, however, that no such modification or alteration shall, without the consent of the holder of any bond issued hereunder affected thereby, A. permit the extension of the time or times of payment of the principal of or the interest or premium, if any, on any bond, or a reduction in the rate of interest thereon, or otherwise affect the terms of payment of the

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principal of or interest or premium, if any, on any bond, which shall always be unconditional, or affect the right of any bondholder to institute suit for the enforcement of any such payment on or after the respective due dates expressed in such bond or in the coupons pertaining thereto, or B. otherwise than as permitted by this Indenture, permit the creation by the Company of any mortgage lien ranking prior to or on a parity with the lien of this Indenture or of any indenture supplemental hereto, with respect to any of the property covered thereby, or give to any bond or bonds secured by this Indenture any preference over any other bond or bonds so secured, or deprive any bondholder of the security afforded by the lien of this Indenture, or C. permit the reduction of the percentage required by the provisions of this Section for the taking of any action under this Section with respect to any bond outstanding hereunder.

SECTION 14.08. A record in duplicate of the proceedings of each meeting of bondholders shall be prepared by the permanent Secretary of the meeting and shall have attached thereto the original reports of the inspectors of votes, and affidavits by one or more persons having knowledge of the facts showing a copy of the notice of the meeting and a copy of the notice of adjournment thereof, if required under the provisions of Section 14.06 hereof, and showing that said notices were mailed and published as provided in Section 14.02 hereof and, in a proper case, as provided in Section 14.06 hereof. Such record shall be signed and verified by the affidavits of the permanent Chairman and the permanent Secretary of the meeting, and one duplicate thereof shall be delivered to the Company and the other to the Trustee for preservation by the Trustee. Any record so signed and verified shall be proof of the matters therein stated, and if such record shall also be signed and verified by the affidavit of a duly authorized representative of the Trustee, such meeting shall be deemed conclusively to have been duly convened and held and such record shall be conclusive, and any resolution or proceeding stated in such record to have been adopted or taken, shall be deemed conclusively to have been duly adopted or taken by such meeting. A true copy of any resolution adopted by such meeting shall be mailed by the Trustee to all holders of bonds outstanding hereunder, the names and addresses of whom are then preserved by the Trustee pursuant to the provisions of this Indenture, and proof of such mailing by the affidavit of some person having knowledge of the fact shall be filed with the Trustee, but failure to mail copies of such resolution as aforesaid shall not affect the validity thereof. No such resolution shall be binding until and unless such resolution is approved by resolution of the Board of Directors of the Company. It shall be the duty of the Company to file a copy of any such resolution of

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approval with the Trustee, but if such resolution is adopted and a certified resolution filed with the Trustee, the resolution so adopted by such meeting shall (to the extent permitted by law) be deemed conclusively to be binding upon the Company, the Trustee and the holders of all bonds and coupons issued hereunder, at the expiration of sixty days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such resolution, or annulling the action taken thereby in a legal action or equitable proceeding for such purposes commenced within such sixty day period; provided, however, that no such resolution of the bondholders, or resolution, shall in any manner change or modify or be so construed as to change or modify any of the rights, immunities, or obligations of the Trustees without their written assent thereto.

SECTION 14.09. Bonds authenticated and delivered after the date of any bondholders' meeting may bear a notation in form approved by the Trustee as to the action taken at meetings of bondholders theretofore held, and upon demand of the holder of any bond outstanding at the date of any such meeting and presentation of his bond for the purpose at the principal office of the Trustee, the Company shall cause suitable notation to be made on such bond by endorsement or otherwise as to any action taken at any meeting of bondholders theretofore held. If the Company or the Trustee shall so determine, new bonds so modified as in the opinion of the Trustee and the Board of Directors of the Company to conform to such bondholders' resolution shall be prepared, authenticated and delivered, and upon demand of the holder of any bond then outstanding and affected thereby shall be exchanged without cost to such bondholders for bonds then outstanding hereunder upon surrender of such bonds with all unmatured coupons, if any, appertaining thereto. The Company or the Trustee may require bonds outstanding to be presented for notation or exchange as aforesaid if either shall see fit to do so. Instruments supplemental to this Indenture embodying any modification or alteration of this Indenture (including any indenture supplemental hereto) made at any bondholders' meeting and approved, by resolution of the Board of Directors of the Company, as aforesaid, may be executed by the Trustee and the Company and upon demand of the Trustee, or if so specified in any resolution adopted by any such bondholders' meeting, shall be executed by the Company and the Trustee.

Any instrument supplemental to this Indenture executed pursuant to the provisions of this Section, shall comply with all applicable provisions of the

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Trust Indenture Act of 1939, as amended and in force on the date of the execution of such supplemental indenture.

SECTION 14.10. A. Anything in this Article contained to the contrary notwithstanding, the Trustee may, at the option of the Company, receive the written consent (in any number of instruments of similar tenor executed by bondholders or by their attorneys appointed in writing) of the holders of sixty per cent (60%) or more in principal amount of the bonds outstanding hereunder, provided, that, if the rights of one or more, but less than all, series of bonds then outstanding are to be adversely affected by action taken pursuant to such consent, then by consent of the holders of at least sixty per cent (60%) in principal amount of those bonds so to be adversely affected and outstanding hereunder (in all cases, at the time the last such needed consent is delivered to the Trustee) in lieu of the holding of a meeting pursuant to this Article and in lieu of all action at such a meeting and with the same force and effect as a resolution duly adopted in accordance with the provisions of Section 14.07.

B. Instruments of consent shall be witnessed or in the alternative may 1. have the signature guaranteed by a bank or trust company or a registered dealer in securities, 2. be acknowledged before a notary public or other officer authorized to take acknowledgments, or 3. have their genuineness otherwise established to the satisfaction of the Trustee.

The amount of bonds payable to bearer, and the series and serial numbers thereof, held by a person executing an instrument of consent (or whose attorney has executed an instrument of consent in his behalf), and the date of his holding the same, may be proved, either by exhibiting the bonds themselves to the Trustee or by a certificate executed a) by any bank, banker or trust or insurance company organized under the laws of the United States of America or of any State thereof, having a capital of not less than five hundred thousand dollars ($500,000), b) by any trustee of any pension, welfare, hospitalization or similar fund having an aggregate corpus in excess of five million dollars ($5,000,000), c) by the United States of America, any Territory thereof, the District of Columbia, any State of the United States, any municipality in any State of the United States or any public instrumentality of the United States, any State or Territory, or d) by any other person or corporation satisfactory to the Trustee. A bondholder in any of the foregoing categories may sign a certificate in his own behalf.

Each such certificate shall be dated and shall state in effect that as of the date thereof, a coupon bond or bonds bearing a specified serial number or

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numbers was deposited with or exhibited to the signer of such certificate. The holding by the person named in any such certificate of any bond specified therein shall be presumed to continue unless (1) any certificate bearing a later date issued in respect of the same bond shall be produced, (2) the bond specified in such certificate (or any bond or bonds issued in exchange or substitution for such bond) shall be produced by another holder, or (3) the bond specified in such certificate shall be registered as to principal in the name of another holder or shall have been surrendered in exchange for a fully registered bond registered in the name of another holder. The Trustee may, in its discretion, require further proof in cases where it deems further proof desirable. The ownership of registered bonds shall be proved by the registry records.

The fact and date of execution of any such instrument or writing and the authority of any person executing the same and the amount and numbers of unregistered bonds held by any person executing any such instrument or writing as a bondholder may also be proved in any other manner which the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section; and

C. Until such time as the Trustee shall receive the written consent of the necessary per cent in principal amount of the bonds required by the provisions of subsection A. above for action contemplated by such consent, any holder of a bond, the serial number of which is shown by the evidence to be included in the bonds the holders of which have consented to such action, may, by filing written notice with the Trustee at its principal office and upon proof of holding as provided in subsection B. above, revoke such consent so far as it concerns such bond. Except as aforesaid, any such consent shall be conclusive and binding upon such holder and upon all future holders of such bond (and any bond issued in lieu thereof or exchanged therefor), irrespective of whether or not any notation of such consent is made upon such bond, and in any event any action taken by the holders of the percentage in aggregate principal amount of the bonds specified in subsection A. above in connection with such action shall, subject to the provisions of the last sentence of Section 14.08 hereof, be conclusively binding upon the Company, the Trustees and holders of all the bonds.

ARTICLE XV.
SUPPLEMENTAL INDENTURES.

SECTION 15.01. In addition to any supplemental indenture otherwise authorized by this Indenture, the Company, when authorized by resolution of

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its Board of Directors, and the Trustees, from time to time and at any time, subject to the conditions, provisions and restrictions in this Indenture contained, may enter into an indenture or indentures supplemental hereto and which thereafter shall form a part hereof, for any one or more or all of the following purposes:

A. To close the Indenture against the issue of additional bonds or to add to the conditions, limitations and restrictions on the authorized amount, terms, provisions, purposes of issue, authentication and delivery of bonds specified in Articles II and III hereof other conditions, limitations and restrictions thereafter to be observed.

B. To add to the covenants and agreements of the Company in this Indenture contained, other covenants and agreements thereafter to be observed, which the Board of Directors of the Company shall consider to be for the protection of the trust estate and of the holders of bonds, although the freedom of action of the Company may be materially restricted thereby, and/or to surrender any right or power herein reserved to, or conferred upon, the Company or to or upon any successor corporation.

C. To correct the description of any property hereby conveyed or pledged or intended so to be, or to convey, transfer and assign to the Trustees, and to subject to or confirm the lien of this Indenture, with the same force and effect as though included in the granting clauses hereof, additional properties and franchises hereafter acquired by the Company through consolidation or merger, or by purchase or otherwise.

D. To evidence the succession of another corporation to the Company, or successive successions, and the assumption by such successor corporation of the covenants, agreements and obligations of the Company under this Indenture.

E. For any other purpose not inconsistent with the terms of this Indenture, or for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective or inconsistent provision contained herein or in any supplemental indenture hereto or to make other provisions with respect to matters or questions arising under this Indenture provided that such other provisions shall not adversely affect the bondholders.

F. For the appointment of a separate trustee or a co-trustee to act under this Indenture and/or under any indenture supplemental hereto.

G. To provide for any form of Book Entry Bonds.

H. To modify any of the provisions of this Indenture for the purpose of relieving the Company from any of the obligations, conditions or

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restrictions herein contained; provided that no such modification shall be or become operative or effective, or in any manner impair any of the rights of the bondholders or of the Trustees, while any bonds of any series established prior to the execution of such supplemental indenture shall remain outstanding; and provided, further, that such supplemental indenture shall be specifically referred to in the text of all bonds of any series established after the execution of such supplemental indenture; and provided, also, that the Trustees may in their uncontrolled discretion decline to enter into any such supplemental indenture which, in their opinion, may not afford adequate protection to the Trustees when the same shall become operative.

No supplemental indenture entered into pursuant to the terms of this Indenture shall eliminate, nor contain any provision in contravention of, any provision of this Indenture which is required to be included in an indenture to be qualified under the Trust Indenture Act of 1939 by any provisions of Sections 310 to 317, inclusive, of or Section 318(a) of said Act.

SECTION 15.02. The Trustees are hereby authorized to join with the Company in the execution of any such supplemental indenture, to make the further agreements and stipulations which may be therein contained, and to accept the conveyance, transfer and assignment of any such property. Subject to the provisions of subparagraph H. of Section 15.01 hereof, any such supplemental indenture, other than those provided for in subparagraphs C., D. and E. of
Section 15.01 hereof, may be applicable in respect of all bonds issued and to be issued hereunder or in respect of the bonds of one or more particular series thereof, or for a limited or unlimited period of time, or otherwise, in the discretion of the Company. Every such supplemental indenture shall be in form approved by counsel.

SECTION 15.03. The Trustees are hereby authorized to join with the Company in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture, and to make the further agreements and stipulations which may be therein contained. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Subject to the provisions of Section 12.02 hereof, the Trustees may receive an opinion of counsel as conclusive evidence that any such supplemental indenture is authorized or permitted by the terms of this Indenture and that it is proper for the Trustees under the provisions of this Article XV to join in the execution thereof. Subject to the provisions of Section

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12.02 hereof, the Trustees shall not be under any responsibility or liability to the Company or to any holder of any bond, or to anyone whomsoever, for any act or thing which it may do or decline to do in good faith in pursuance of the provisions of this Article XV.

SECTION 15.04. Any supplemental indenture executed in accordance with any of the provisions of this Article XV shall thereafter form a part of this Indenture; and all the terms and conditions contained in any such supplemental indenture as to any provision authorized to be contained therein shall be, and be deemed to be, part of the terms and conditions of this Indenture for any and all purposes, and, if deemed necessary or desirable by the Trustee, any of such terms or conditions may be set forth in reasonable and customary manner in the bonds of the particular series to which such supplemental indenture shall apply.

In case of the execution and delivery of any supplemental indenture, express reference may be made thereto in the text of the bonds of any series issued thereafter, if deemed necessary or desirable by the Trustee.

ARTICLE XVI.

DEFEASANCE.

SECTION 16.01. If, when the bonds issued hereunder shall have become due and payable, at maturity or otherwise, or when notice of redemption has been given as herein provided, or when the Trustee has been irrevocably authorized by the Company to give or complete such notice of redemption, the Company, its successors or assigns, shall pay or cause to be paid the whole amount of the principal and interest (and premium, if any) due on all the bonds and coupons issued hereunder then outstanding, or shall provide for such payment by depositing (whether at or prior to the maturity or redemption date of such bonds) with the Trustee the entire amount due and to become due and payable thereon for principal and interest (and premium, if any), or if all bonds outstanding hereunder together with all unmatured coupons thereto appertaining shall be surrendered to the Trustee for cancellation, and in each case the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then and in that case the trust estate shall revert to the Company, and the entire estate, right, title and interest of the Trustees and of the bondholders shall thereupon cease, determine and become void; and

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in that case also, the Trustees, on demand of the Company, at its cost and expense, shall pay to the Company or upon its written order, all moneys (other than moneys deposited as hereinbefore in this Section 16.01 hereof provided) then held by the Trustees under this Indenture, and shall cancel and discharge the lien of this Indenture, and execute and deliver to the Company such deeds or other instruments in writing as the Company shall reasonably request to satisfy the lien hereof and to reconvey to the Company the estate and title hereby conveyed, and assign and deliver to the Company any property then held by the Trustees under this Indenture; but the Trustees shall take any such action only upon the receipt by the Trustee of an officers' certificate and an opinion of counsel, each stating in substance that in the opinion of the respective signers all conditions precedent provided for in this Indenture relating to such payment, delivery, satisfaction and reconveyance have been complied with; otherwise this Indenture shall be, continue and remain in full force and effect.

SECTION 16.02. All sums which may become due and payable for principal (and premium, if any) upon any bond hereunder shall be paid to the bearer of such bond, unless registered, and if registered, to the registered owner thereof, but in no event shall the Company or the Trustee be required to make such payment except upon the surrender of such bond in negotiable form, or assigned in blank, accompanied by all unmatured coupons, if any, thereunto belonging. In case any bond registrable as to both principal and interest shall be issued hereunder, as permitted by the provisions hereof, interest thereon shall be paid only to the registered owner thereof. The interest on coupon bonds shall be payable only on the presentation and surrender of the several coupons for such interest as they respectively mature. All bonds and coupons as and when paid shall be forthwith cancelled by the Trustee and delivered to or upon the order of the Company.

SECTION 16.03. In the event that any bond hereunder shall not be presented for payment when the principal thereof becomes due, either at maturity or otherwise or at the date fixed for the redemption thereof, or in the event that any coupon appertaining to any such bond shall not be presented for payment at the due date thereof, and the Company shall have on deposit with the Trustee in trust for the purpose, on the date when such bond or coupon is so due, funds sufficient to pay the principal of such bond (and premium, if any), together with all interest due thereon to the date of maturity of such bond or to the date fixed for the redemption thereof, or to pay such coupon, as the case

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may be, for the use and benefit of the holder thereof, then interest on said bond or on said matured coupon, and all liability of the Company to the holder of said bond for the payment of the principal thereof and interest thereon (and premium, if any), or to the holder of said matured coupon for the payment thereof and interest thereon, as the case may be, shall forthwith cease, determine and be completely discharged; and thereupon it shall be the duty of the Trustee, subject to the provisions of Section 8.03 hereof, to hold the funds so deposited for the benefit of the holder of such bond or matured coupon, as the case may be, who shall thereafter be restricted exclusively to said funds for any claim of whatsoever nature on the part of such holder on said bond or any coupons appertaining thereto, or on said matured coupon, and shall no longer be entitled to any lien or benefit of this Indenture.

SECTION 16.04. Bonds issued hereunder, pledged or sold or otherwise issued by the Company, upon being released from pledge, or upon being repurchased or otherwise, acquired by the Company (except when acquired by call for redemption pursuant to the provisions of the bonds or of this Indenture), may again be sold, pledged, or otherwise issued, reissued or disposed of by the Company as often as it may repossess or acquire the same, and thereupon shall continue to be entitled to the security of this Indenture as upon their original issue.

SECTION 16.05. Except as otherwise specified as to any particular series of bonds, bonds and interest obligations for the payment of which and bonds for the redemption of which either:

A. moneys in the necessary amount or

B. 1. direct obligations of the government of the United States of America or 2. obligations guaranteed by the government of the United States of America or 3. securities backed by obligations of the government of the United States of America as collateral under an arrangement by which the interest and principal payments on the collateral generally flow immediately through to the holders of such securities, which, in the case of l., 2. and 3. hereof, are not subject to redemption prior to maturity by anyone other than the holder and the principal of and the interest on which when due, and without any regard to reinvestment thereof, will, as evidenced by the certificate of an independent accountant delivered to the Trustee, provide moneys which, together with the moneys, if any, deposited with or held by the Trustee, shall be sufficient to pay when due the principal of, premium, if any, and interest due and to become due on said bonds or portions thereof on the redemption date or maturity date thereof, as the case may be,

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shall have been set apart by or deposited with the Trustee, with irrevocable direction so to apply the same, subject to the provisions of Section 8.03 hereof (with or without any additional right given to the holders to surrender their bonds or obtain therefrom payment therefor prior to the redemption date) shall for all purposes under this Indenture including satisfying the lien of this Indenture be deemed to have been paid (hereinafter sometimes referred to as a "Section 16.05 Defeasance") provided that in the case of redemption the notice requisite to the validity of such redemptions shall have been given or arrangements shall have been made insuring to the satisfaction of the Trustee that the same will be given; and provided further that the Trustee has received an opinion of counsel to the effect that a) such Section 16.05 Defeasance does not require registration on behalf of the moneys, obligations or securities deposited, by the Company or by the Trustee under the Investment Company Act of 1940, b) such Section 16.05 Defeasance does not violate any applicable laws and
c) such Section 16.05 Defeasance will not result in a taxable event with respect to the holders of the Bonds the payment of which is being provided for. The provisions of this Section 16.05 relate solely to the Section 16.05 Defeasances and do not affect the cancellation and discharge of the lien of this Indenture pursuant solely through the provisions of Sections 16.01 through 16.04 hereof.

ARTICLE XVII.

MISCELLANEOUS PROVISIONS.

SECTION 17.01. All of the covenants, stipulations, promises and agreements of this Indenture contained by or in behalf of the Company shall bind its successors and assigns, whether so expressed or not.

SECTION 17.02. Except as otherwise expressly provided herein, nothing in this Indenture, expressed or implied, is intended or shall be construed to confer upon or give to any person, firm or corporation, other than the parties hereto and the holders from time to time of the bonds issued under this Indenture, any security, rights, remedies or claims, legal or equitable, under or by reason of this Indenture, or under or by reason of any covenant, condition or provision herein contained; and this Indenture and all the covenants, conditions and provisions herein contained are and shall be held to be for the sole and exclusive benefit of the parties hereto and the holders from time to time of the bonds and coupons issued hereunder.

178

SECTION 17.03, Nothing in this Indenture or in any bond issued or to be issued hereunder, expressed or implied, is intended, or shall be construed to prevent any bond issued hereunder from having any independent security or guaranty or the benefit of any covenants, agreements or rights contained in any agreement (including any supplemental indenture) outside this Indenture, concerning which a notation may or may not be endorsed thereon, and the references herein or in the bonds to the equal security hereunder of all bonds issued hereunder shall not be deemed applicable to any independent security, guaranty, covenants, agreements or rights.

SECTION 17.04. The same officer or officers of the Company, or the same engineer or counsel or other person, as the case may be, need not certify to all the matters required to be certified under the provisions of any Article or
Section hereof, but different officers, engineers, counsel or other persons may certify to different facts respectively.

SECTION 17.05. In order not to prevent or delay the destruction of cancelled bonds or coupons issued hereunder, the Trustee and the Company may adopt such method of destruction thereof and for keeping a record of or for evidencing the rights and powers hereunder of the Company and the duties of the Trustee, in respect thereof, as they may from time to time determine upon, in lieu of the physical deposit by the Company of any such cancelled bonds or coupons, when permitted, or for the holding or retention by the Trustee, or the delivery by the Trustee to the Company, of any such cancelled bonds or coupons.

SECTION 17.06. Nothing in this Indenture shall be construed or is intended to prescribe or affect the methods and practices of the Company in keeping its books and accounts, or to limit the power of the Company to fix and determine the price or consideration at which the bonds authenticated and delivered hereunder may be sold or otherwise disposed of. Any and all said bonds may be sold or otherwise disposed of upon such terms and for such consideration as the Company may deem fit, subject to any provisions of law in respect thereof.

SECTION 17.07. Upon any application by the Company to the Trustees or either of them to take any action under any of the provisions of this Indenture, the Company shall furnish to them, it or him, an officers' certificate and opinion of counsel, each stating that all conditions precedent provided for in this Indenture (including any covenants compliance with which constitutes a

179

condition precedent) have been complied with, except that in the case of any such application as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application, no additional certificate or opinion need be furnished.

SECTION 17.08. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include A. a statement that the person making such certificate or opinion has read such covenant or condition; B. a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; C. a statement that, in the opinion of 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 D. a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

SECTION 17.09. If any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture which is required to be included in an indenture to be qualified under the Trust Indenture Act of 1939 by any of Sections 310 to 317, inclusive, of said Act, such required provision shall control.

SECTION 17.10. This Indenture shall be governed by the laws of the State of New York except as to the lien of property which lien shall be governed by the laws of the state in which such property is situated.

PART III

THE TRUSTEES

The Trustees shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Twenty-ninth Supplemental Indenture or the due execution hereof by the Company, or for or in respect of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company.

Except as herein otherwise provided, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustees by reason of this Twenty-ninth Supplemental Indenture other than as set forth in the

180

Indenture, subject to the restatement provided for in Part II hereof, and this Twenty-ninth Supplemental Indenture is executed and accepted on behalf of the Trustees, subject to all the terms and conditions set forth in the Indenture, subject to the restatement provided for in Part II hereof, as fully to all intents as if the same were herein set forth at length.

PART IV

MISCELLANEOUS PROVISIONS

Except insofar as herein otherwise expressly provided, all the provisions, terms and conditions of the Indenture, subject to the restatement provided for in Part II hereof, shall be deemed to be incorporated in, and made a part of, this Twenty-ninth Supplemental Indenture; and the Indenture supplemented by the Supplemental Indenture dated as of March 1, 1944, by the Second Supplemental Indenture dated as of March 1, 1947, by the Third Supplemental Indenture dated as of March 1, 1948, by the Fourth Supplemental Indenture dated as of November 1, 1950, by the Fifth Supplemental Indenture dated as of August 1, 195 1, by the Sixth Supplemental Indenture dated as of January 15, 1954, by the Seventh Supplemental Indenture dated as of November 15, 1955, by the Eighth Supplemental Indenture dated December 2, 1955, by the Ninth Supplemental Indenture dated December 5, 1956, by the Tenth Supplemental Indenture dated as of June 15, 1957, by the Eleventh Supplemental Indenture dated as of May 15, 1961, by the Twelfth Supplemental Indenture dated January 15, 1962, by the Thirteenth Supplemental Indenture dated as of March 15, 1963, by the Fourteenth Supplemental Indenture dated as of May 15, 1964, by the Fifteenth Supplemental Indenture dated as of May 15, 1966, by the Sixteenth Supplemental Indenture dated as of May 15, 1967, by the Seventeenth Supplemental Indenture dated as of September 1, 1968, by the Eighteenth Supplemental Indenture dated as of November 15, 1968, by the Nineteenth Supplemental Indenture dated as of June 1, 1970, by the Twentieth Supplemental Indenture dated as of July 1, 1972, by the Twenty-first Supplemental Indenture dated as of July 1, 1973, by the Twenty-second Supplemental Indenture dated as of July 15, 1974, by the Twenty-third Supplemental Indenture dated as of April 15, 1975, by the Twenty-fourth Supplemental Indenture dated as of September 15, 1976, by the Twenty-fifth Supplemental Indenture dated as of November 15, 1977, by the Twenty-sixth Supplemental Indenture dated as of November 15, 1981, by the Twenty-

181

seventh Supplemental Indenture dated as of February 15, 1983, by the Twenty-eighth Supplemental Indenture dated as of February 1, 1987, and by this Twenty-ninth Supplemental Indenture is in all respects ratified and confirmed; and the Indenture and said Supplemental Indentures shall be read, taken and construed as one and the same instrument.

Nothing in this Twenty-ninth Supplemental Indenture is intended, or shall be construed, to give to any person or corporation, other than the parties hereto and the holders of bonds issued and to be issued under and secured by the Indenture, any legal or equitable right, remedy or claim under or in respect of this Twenty-ninth Supplemental Indenture, or under any covenant, condition or provision herein contained, all the covenants, conditions and provisions of this Twenty-ninth Supplemental Indenture being intended to be, and being, for the sole and exclusive benefit of the parties hereto and of the holders of bonds issued and to be issued under the Indenture and secured thereby.

All covenants, promises and agreements in this Twenty-ninth Supplemental Indenture contained by or on behalf of the Company shall bind its successors and assigns whether so expressed or not.

This Twenty-ninth Supplemental Indenture may be executed in any number of counterparts, and each of such counterparts when so executed shall be deemed to be an original; but all such counterparts shall together constitute but one and the same instrument.

182

IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused this Twenty-ninth Supplemental Indenture to be executed by its President or one of its Vice Presidents and its corporate seal to be hereunto affixed, duly attested by its Secretary or an Assistant Secretary, and Citibank, N.A., as Trustee as aforesaid, has caused the same to be executed by one of its Vice Presidents or one of its Assistant Vice Presidents and its corporate seal to be hereunto affixed, duly attested by one of its Senior Trust Officers, and Robert T. Kirchner, as Individual Trustee as aforesaid, has hereunto affixed his signature, on the respective dates of their acknowledgments hereinafter set forth, as of the date and year first above written.

MICHIGAN CONSOLIDATED GAS COMPANY

BY      PETER L. VERARDI                    Attest:
  --------------------------------
  Peter L. Verardi, Vice President                    SUSAN K. MCNISH
        500 Griswold Street                 ------------------------------------
         Detroit, Michigan                  Susan K. McNish, Assistant Secretary
                                                    500 Griswold Street
                                                     Detroit, Michigan

CITIBANK, N.A., as Trustee,

BY      R. T. KIRCHNER                       Attest:
  -------------------------------
  R. T. Kirchner, Vice President                          E. GIBBONS
         120 Wall Street                     -----------------------------------
        New York, New York                     E. Gibbons, Senior Trust Officer
                                                       120 Wall Street
                                                      New York, New York

       ROBERT T. KIRCHNER
-------------------------------
       Robert T. Kirchner
        65-24 79th Place
    Middle Village, New York

Signed, sealed, acknowledged and delivered by MICHIGAN CONSOLIDATED GAS COMPANY, CITIBANK. N.A. and ROBERT T. KIRCHNER, in the presence of:

STEPHEN B. SHAW
S. B. Shaw

PAM C. REBUCCI
Pam C. Rebucci

183

The foregoing instrument was acknowledged before me this 27th day of July, 1989, by P. L. Verardi, Vice President and Treasurer of MICHIGAN CONSOLIDATED GAS COMPANY, a Michigan corporation, on behalf of the corporation; by R. T. Kirchner, Vice President, of Citibank, N.A., a national banking association, on behalf of the corporation, as Trustee as in said instrument described and by Robert T. Kirchner, as Individual Trustee as in said instrument described.

ENZO L. CARBOCCI

Enzo L. Carbocci Notary Public, State of New York No. 43-5605595 Qualified in Richmond County Certificate Filed in New York County Term Expires March 30, 1990

My Commission expires:

This instrument drafted by:

Susan K. McNish, Assistant Secretary and Senior Attorney Michigan Consolidated Gas Company 500 Griswold Street Detroit, Michigan.

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SCHEDULE A
FIRST

The following described real estate located in the
State of Michigan:

ALPENA COUNTY

                              The following described lands in Alpena Township
                        (Township 3l North, Range 8 East):

PHELPS-COLLINS                  (1) A 0.50 acre parcel abutting the South
GATE STATION            right-of-way line of M-32 in the Northwest quarter (NW
                        1/4) of Section 30 described as: Commencing at the North
                        quarter corner of said Section 30, thence North
                        89(degrees)53'30" West along the North section line
                        264.00 feet to the Northwest corner of a parcel
                        described in Liber 258, Page 650, Alpena County Register
                        of Deeds Office, thence South Ol(degrees)20'30" East
                        62.75 feet to the South right-of-way line of M-32 (per
                        Liber 78, Page 116 and subsequent Certificate of
                        Surveys) to the point of beginning, thence South
                        Ol(degrees)20'30" East 208.0 feet, thence South
                        89(degrees)55'28" West 104.00 feet, thence North
                        Ol(degrees)20'30" West 208.00 feet, thence North
                        89(degrees)55'28" East along said South right-of-way
                        line 104.00 feet to the point of beginning.

                                ROSCOMMON COUNTY

                              The following described lands in Richfield
                        Township (Township 23 North, Range 1 West):

ST. HELEN'S                   (2) The East 25 feet of the South 58 feet of the
REGULATOR STATION      West 1/2 of the Southwest l/4 of the Southwest 1/4 of the
                       Southwest l/4, Section 27.

                                  WAYNE COUNTY

                              The following described lands in the City of
                       Hamtramck:

HAMTRAMCK OFFICE             (3) Lots 15 and 16, Block 4, D.W. Simons' Highland
PARKING                Subdivision, as recorded in Liber 11, Page 46 of Plats,
                       Wayne County Records.


HAMTRAMCK OFFICE             (4) Lot 50, Block 4, D.W. Simons' Highland
                       Subdivision, as recorded in Liber 11, Page 46 of Plats,
                       Wayne County Records.

COLUMBUS FIELD

ST. CLAIR COUNTY

(Additional Interests)

(5) That portion of the following lands described as all gas and oil formations and strata therein down to the top of the Clinton formation,

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together with the full right and power to use said formations and strata for the purpose of storing natural gas therein; withdrawing natural gas therefrom; restoring natural gas therein and drilling wells thereto, including fluid disposal wells, and conducting other operations necessary or incidental thereto, together with easements and rights-of-way over and upon the surface of said lands for the purpose of carrying on such operations, not including oil, gas or other minerals, said lands being located and described as follows:

Columbus Township, St. Clair County (T5N, R15E)

That part of the Southeast quarter of SECTION 22 described as beginning at a point on the East line of
Section 22, 690.6 feet South l(degree)00'50" West from the East one-quarter post of Section 22, thence South l(degree)00'50" West 328.8 feet along the East line of
Section 22, thence South 89(degrees)50'25" West 1344.58 feet to the West line of the East half of the Southeast quarter of Section 22 as fenced, thence North 1(degree)17'15" East 328.84 feet along the West line of the East half of the Southeast quarter of Section 22 as fenced, thence North 89(degrees)50'25" East 1343.01 feet to point of beginning; ALSO the West 60 acres of the East half of the Northeast quarter of SECTION 26.

EDMORE FIELD
MONTCALM COUNTY
(Additional Interests)

(6) That portion of the following lands described as the Michigan Stray formation therein and any other natural gas strata therein down to and including the Marshall formation therein, together with the full right and power to use said strata for the purpose of storing natural gas therein; withdrawing natural gas therefrom; restoring natural gas therein and drilling wells thereto, together with easements and rights-of-way over and upon the surface of said lands for the purpose of carrying on such operations, said lands being located and described as follows:

Home Township, Montcalm County (T12N, R6W)

The North half of the Southeast quarter of the Northeast quarter of SECTION 14; ALSO commencing at the East quarter post of SECTION 15, thence West 40 rods, thence North 20 rods, thence East 40 rods, thence South 20 rods to point of beginning; ALSO commencing 40 rods West of the East quarter post of SECTION 15, thence West to one-eighth line, thence North

186

20 rods, thence West 40 rods, thence South 20 rods, thence East 40 rods to point of beginning; ALSO the Southwest quarter of the Southwest quarter of SECTION 17, EXCEPT the South 20 rods thereof; ALSO a parcel of land 20 rods North and South by 40 rods East and West in the Southeast corner of the Southwest quarter of the Southwest quarter of SECTION 17; ALSO the Southeast quarter of SECTION 18, EXCEPT 1 acre in square form in the Southeast corner thereof; and EXCEPT a parcel beginning 208.7 feet West of the Southeast corner of said Southeast quarter, thence West 214 feet, thence North 208.7 feet, thence East 214 feet, thence South 208.7 feet to point of beginning; and EXCEPT beginning 1664 feet West of the Southeast corner of the said Southeast quarter, thence North 208 feet, thence West 208 feet, thence South 208 feet, thence East 208 feet to point of beginning; ALSO a parcel of land described as commencing 854 feet West of the Southeast corner of SECTION 19, thence West 155 feet, thence North 175 feet, thence East 155 feet, thence South 175 feet to point of beginning; ALSO the Southwest quarter of the Northeast quarter and the East 25 acres of the Southeast quarter of the Northwest quarter of SECTION 20; ALSO the South half of the Northwest quarter of the Northwest quarter and the North 381 feet of the West 1815 feet of the South half of the Northwest quarter of SECTION 20; ALSO the Northeast quarter of the Northeast quarter of the Southeast quarter of SECTION 21, EXCEPT a parcel commencing in the Northeast corner thereof, thence South 100 feet, thence West 183 feet, thence North 100 feet, thence East 183 feet to point of beginning; ALSO the East half of the West two-thirds of the Southeast quarter of the Southwest quarter of the Southwest quarter of SECTION 22; ALSO the East half of the Southeast quarter, ALSO the South half of the Southeast quarter of the Northeast quarter, SECTION 23; ALSO the East 430 feet of the Southwest quarter of the Southwest quarter of SECTION 24; ALSO a parcel of land 18 rods East and West by 26 2/3 rods North and South in the Southeast corner of the Northeast quarter of the Southeast quarter of SECTION 25; ALSO that part of the Northeast quarter of the Northwest quarter of SECTION 30 lying West and South of Wright's Creek; ALSO the West one-quarter of the West half of the Northwest quarter of the Northeast quarter of SECTION 35; ALSO the East half of the Northwest quarter of the Northeast quarter, ALSO the North half of the Northeast quarter of the Northeast quarter, of SECTION 35.

Richland Township, Montcalm County (T12N, R5W)

A parcel of land described as commencing 50 rods North of the one-quarter post on the East side of
SECTION 7, thence North 20 rods to the line of

187

School District No. 7, thence West 16 rods, thence South 20 rods, thence East 16 rods to point of beginning, being a portion of the Southeast quarter of the Northeast quarter; ALSO that part of the Northeast quarter of the Southwest quarter lying South of the old Pere Marquette Railway right-of-way, ALSO the Southwest quarter of the Southwest quarter, ALSO the West half of the Southeast quarter of the Southwest quarter, ALSO the Northwest quarter of the Southwest quarter, ALSO that part of the Northwest quarter of the Southeast quarter lying South of the old Pere Marquette Railway right-of-way, of SECTION 30.

NEW HAVEN FIELD

GRATIOT & MONTCALM COUNTIES
(Additional Interests)

(7) That portion of the following lands described as the Michigan Stray formation therein and any other dry natural gas strata therein down to and including the Marshall formation therein together with the full right and power to use said strata for the purpose of storing dry natural gas therein, withdrawing dry natural gas therefrom, restoring dry natural gas therein and drilling wells thereto, together with easements and rights-of-way over and upon the surface of said lands for the purpose of carrying on such operations, excepting, however, minerals other than dry natural gas, said lands being located and described as follows:

Sumner Township, Gratiot County (TllN, R4W)

The Southwest quarter of the Northwest quarter of
SECTION 29; ALSO a parcel of land described as commencing at the West quarter corner of SECTION 29, thence South 20 rods, thence East 18 rods, thence North 1 rod 17 links, thence East 9 rods 5 links, thence North 18 rods 8 links to the one-quarter line, thence West to point of beginning.

Crystal Township, Montcalm County (Tl0N, R5W)

The Southeast quarter of the Southwest quarter of
SECTION 2; ALSO the Northwest fractional quarter of
SECTION 11, EXCEPT the West 76 rods thereof, and EXCEPT West's East Side Park.

188

TAGGART FIELD
MECOSTA COUNTY
(Additional Interests)

(8) That portion of the following lands described as the Michigan Stray formation therein and any other dry natural gas strata therein down to and including the Marshall formation therein together with the full right and power to use said strata for the purpose of storing dry natural gas therein, withdrawing dry natural gas therefrom, restoring dry natural gas therein and drilling wells thereto, together with easements and rights-of-way over and upon the surface of said lands for the purpose of carrying on such operations, excepting, however, minerals other than dry natural gas, said lands being located and described as follows:

Hinton Township, Mecosta County (T13N, R8W)

The East half of the Northeast quarter of SECTION 21, EXCEPT beginning at the Northeast corner of said East half of Northeast quarter, thence South 10 rods, thence West 8 rods, thence North 10 rods, thence East 8 rods to the point of beginning; ALSO the Northwest quarter of the Northwest quarter, ALSO the Southeast quarter of the Northwest quarter, ALSO the Northeast quarter of the Southwest quarter, ALSO the Southwest quarter of the Northwest quarter, EXCEPT the South 331 feet of the North 993 feet thereof, of SECTION 22.

SECOND

The pipelines of the Company located in the State of Michigan, including transmission lines, lateral lines, well lines and gathering lines, together with easements and rights-of-way for constructing, maintaining, replacing and operating the same, and pipes, structures, compressors, valves, regulators, services, meters, machinery, fixtures, equipment and apparatus comprising or appurtenant to said transmission lines, lateral lines, well lines and gathering lines, described as follows:

AETNA '8' PIPELINE

(i) The 3-inch natural gas pipeline, approximately 2.22 miles long, extending from the Aetna '8' Tap Site in the Southeast quarter of Section 16, T13N, R10W, Aetna Township, Mecosta County, Michigan in a general Northwesterly direction across portions of Sections 16, 17 and 8, T13N, R10W, Aetna Township, Mecosta County, to the Aetna '8' Purchase Meter

189

Station Site in the Northwest quarter of Section 8,
Aetna Township, Mecosta County, Michigan.

BAGLEY '21'                   (ii) The 6-inch natural gas pipeline approximately
PIPELINE EXTENSION      0.54 miles long extending from the Bagley 21 Purchase
                        Meter Station Site located in the Southeast 1/4 of
                        Section 21, T.30N., R.3W., Bagley Township, Otsego
                        County, Michigan generally South through Sections 21 and
                        22 T.30N., R3W., Bagley Township, Otsego County,
                        Michigan to the Fruehauf Facility Tie-in Area located in
                        the Southwest 1/4 of Section 22, T.30N., R.3W., Bagley
                        Township, Otsego County, Michigan.

BURDELL '19'                  (iii) The 6-inch natural gas pipeline,
PIPELINE                approximately 10.62 miles long, extending from the
                        Burdell '19' Tap Site in the Northeast quarter of
                        Section 35, T20N, R9W, Sherman Township, Osceola County,
                        Michigan, in a general Westerly direction across
                        portions of Sections 35, 26, 27, 28, 21, 20 and 19,
                        T20N, R9W, Sherman Township, Osceola County, and
                        portions of Sections 24, 23, 22, 21, 20 and 19, T20N,
                        RlOW, Burdell Township, Osceola County, to the Burdell
                        '19' Purchase Meter Station Site in the Southeast
                        quarter of Section 19, Burdell Township, Osceola County,
                        Michigan.

CENTRAL CHARLTON              (iv) The 3-inch natural gas pipeline approximately
'4' PIPELINE            1.24 miles long extending from the Central Charlton 4
                        Purchase Meter Station located in the Southwest l/4 of
                        Section 9, T.30N., R.lW., Central Charlton Township,
                        Otsego County, Michigan generally North through Sections
                        4 and 9 T.30N., R.lW., Central Charlton Township, Otsego
                        County, Michigan to the Central Charlton 4 Purchase
                        Meter Station located in the Southeast l/4 of Section 4,
                        T.30N., R.1 W., Central Charlton Township, Otsego
                        County, Michigan.

CLAYTON '10'                  (v) The 8-inch natural gas pipeline approximately
PIPELINE                16.66 miles long, extending from the Marathon Oil
                        Company Processing Plant located in the West l/2 of
                        Section 27, T.22N., R.2E., West Branch Township, Ogemaw
                        County, Michigan, generally East through Sections 27, 26
                        and 25, T.22N., R.2E., West Branch Township, Ogemaw
                        County, and continuing generally East through Sections
                        30, 29, 28, 27 and part of 26, T.22N., R.3E., Churchill
                        Township, Ogemaw County, thence generally Southeasterly
                        through part of Sections 26 and 35, T.22N., R.3E.,
                        Churchill Township, Ogemaw County, thence generally
                        South through Section 35, T.22N., R.3E., Churchill
                        Township, Ogemaw County, and continuing generally South
                        through Sections 2 and part of 11, T.21N., R.3E., Mills
                        Township, Ogemaw County, thence generally Southeasterly
                        through part of Sections 11, 12, and 13, T.21N., R.3E.,
                        Mills Township, Ogenaw County, and continuing generally
                        Southeasterly through

                                      190

                        Sections 18, 17 and 20, T.21N., R.4E., Richland
                        Township, Ogemaw County, thence generally Southerly
                        through Sections 29 and 32, T.21N., R.4E., Richland
                        Township, Ogemaw County, and continuing generally
                        Southerly through Sections 3 and part of 10, T.20N.,
                        R.4E., Clayton Township, Arenac County, Michigan, to the
                        Amoco Central Production Facility located in Northwest
                        l/4 of Section 10, T.20N., R.4E., Clayton Township,
                        Arenac County, Michigan.

EAST KALKASKA '18'            (vi) The 2-inch natural gas pipeline,
PIPELINE                approximately 1.16 miles long, extending from the East
                        Kalkaska '18' Tap Site in the Southeast quarter of
                        Section 12, T27N, R8W, Kalkaska Township (West),
                        Kalkaska County, Michigan, in a general Southeasterly
                        direction across portions of Section 12, Kalkaska
                        Township (West) and Sections 7 and 18, T27N, R7W,
                        Kalkaska Township (East) to the East Kalkaska '18'
                        Purchase Meter Station Site in the Northeast quarter of
                        Section 18, Kalkaska Township (East), Kalkaska County,
                        Michigan.

FILER '33' PIPELINE           (vii) The 3-inch natural gas pipeline,
                        approximately 2.20 miles long, extending from the Filer
                        '33' Tap Site in the Northeast quarter of Section 35,
                        T21N, R17W, Filer Township (West part), Manistee
                        County, Michigan, in a general Westerly direction across
                        portions of Sections 35, 34 and 33, T2lN, R17W, Filer
                        Township (West part), Manistee County, to the Filer '33'
                        Purchase Meter Station Site in the Northeast quarter of
                        Section 33, Filer Township (West part), Manistee County,
                        Michigan.

GENERAL MOTORS-               (viii) The 4-inch natural gas pipeline,
MILFORD PIPELINE        approximately 2.00 miles long, extending from the
                        General Motors-Milford Tap Site in the Northeast quarter
                        of Section 16, T2N, R7E, Milford Township, Oakland
                        County, Michigan, in a general Westerly direction across
                        portions of Sections 16, 9, 8 and 7, T2N, R7E, Milford
                        Township, Oakland County, to the General Motors-Milford
                        Gate Station in the Southeast quarter of Section 7,
                        Milford Township, Oakland County, Michigan.

GOODWELL '17'                 (ix) The 4-inch natural gas pipeline,
PIPELINE                approximately 0.96 miles long, extending from the
                        Goodwell '17' Tap Site in the Northwest quarter of
                        Section 9, T14N, RllW, Goodwell Township, Newaygo
                        County, Michigan, in a general Southerly direction
                        across portions of Sections 9, 8 and 17, T14N, Rl1W,
                        Goodwell Township, Newaygo County, to the Goodwell '17'
                        Purchase Meter Station Site in the Northeast quarter of
                        Section 17, Goodwell Township, Newaygo County, Michigan.

                                      191

GOODWELL '26'                 (x) The 4-inch natural gas pipeline, approximately
PIPELINE                9.00 miles long, extending from the Corey Lake Purchase
                        Meter Station Site in the Southwest quarter of Section
                        11, T14N, R12W, Wilcox Township, Newaygo County,
                        Michigan, in a general Easterly direction across
                        portions of Sections 11 and 12, T14N, R12W, Wilcox
                        Township, Newaygo County, and portions of Sections 7,
                        18, 19, 20, 21, 22, 27 and 26, T14N, Rl1W, Goodwell
                        Township, Newaygo County, to the Goodwell '26' Purchase
                        Meter Station Site in the Northeast quarter of Section
                        26, Goodwell Township, Newaygo County, Michigan.

NORTHEAST FOSTER              (xi) The 6-inch natural gas pipeline,
'28' PIPELINE           approximately 3.05 miles long,  extending from the
                        Northeast Foster Tap Site in the Northeast quarter of
                        Section 36, T24N, R2E, Rose Township (West), Ogemaw
                        County, Michigan, in a general Westerly direction across
                        portions of Sections 36, 35 and 34, T24N, R2E, Rose
                        Township, Ogemaw County, and portions of Sections 33 and
                        28, T24N, R2E, Foster Township (Northeast), Ogemaw
                        County, to the Northeast Foster '28' Purchase Meter
                        Station Site in the Southeast quarter of Section 28,
                        Foster Township (Northeast), Ogemaw County, Michigan.

NORWICH '28'                  (xii) The 6-inch natural gas pipeline,
PIPELINE                approximately 0.63 miles long, extending from the
                        Norwich '29' Tap Site in the Northwest quarter of
                        Section 28, T15N, Rl1W, Norwich Township, Newaygo
                        County, Michigan, in a general Southeasterly direction
                        across portions of Section 28 to the Norwich '28'
                        Purchase Meter Station Site in the Southwest quarter of
                        Section 28, Norwich Township, Newaygo County, Michigan.

NORWICH '35'                 (xiii) The 3-inch natural gas pipeline,
PIPELINE EXTENSION      approximately 0.73 miles long, extending from the
                        Norwich,'35, Purchase Meter Station Site in the
                        Southwest quarter of Section 35, T15N, RIIW, Norwich
                        Township, Newaygo County, Michigan, in a general
                        Northeasterly direction across a portion of Section 35,
                        T15N, Rl1 W, Norwich Township, Newaygo County, to the
                        Norwich '35-A' Purchase Meter Station Site in the
                        Northwest quarter of Section 35, Norwich Township,
                        Newaygo County, Michigan.

SOUTHWEST MENTOR              (xiv) The 6-inch natural gas pipeline,
'29' PIPELINE           approximately 9.53 miles long, extending from the
                        Intermediate Tie-In Site in the Northwest quarter of
                        Section 12, T23N, R2E, Klacking Township, Ogemaw County,
                        Michigan, in a general Northerly direction across
                        portions of Sections 12 and 1, T23N, R2E, Klacking
                        Township, Ogemaw County, and Sections 36, 25, 24, 13 and
                        12, T24N, R2E, Rose Township (West), Ogemaw County,
                        also, in a general Northeasterly direction across
                        portions of Sections 7 and 6, T24N, R3E, Rose

                                      192

                        Township (East), Ogemaw County, and Sections 31, 32 and
                        29, T25N, R3E, Mentor Township (Southwest), Oscoda
                        County, to the Southwest Mentor '29' Purchase Meter
                        Station Site in the Southeast quarter of Section 29,
                        Mentor Township (Southwest), Oscoda County, Michigan.

SOUTHWEST MENTOR              (xv) The 6-inch natural gas pipeline,
'29' PIPELINE           approximately 8.83 miles long, extending from the
(PHASE II)              Southwest Mentor '29' Tap Site in the Northeast quarter
                        of Section 25, T22N, R2E, West Branch Township, Ogemaw
                        County, Michigan, in a general Northerly direction
                        across portions of Sections 25, 24, 13, 12 and 1, T22N,
                        R2E, West Branch Township, Ogemaw County, and portions
                        of Sections 36, 25, 24, 13 and 12, T23N, R2E, Klacking
                        Township, Ogemaw County, to the point of interconnection
                        with the Southwest Mentor '29' Pipeline (Phase I) in the
                        Northeast quarter of Section 12, Klacking Township,
                        Ogemaw County, Michigan.

SOUTHWEST MENTOR              (xvi) The 3-inch natural gas pipeline,
TIE-LINE                approximately 1.04 miles long, extending from the Rose
                        City Regulator Station Site in the Northeast quarter of
                        Section 7, T23N, R3E, Cumming Township, Ogemaw County,
                        Michigan, in a general Westerly direction across a
                        portion of Section 7, T23N, R3E, Cumming Township,
                        Ogemaw County, and Section 12, T23N, R2E, Klacking
                        Township, Ogemaw County, to the Intermediate Tie-In Site
                        in the Northwest quarter of Section 12, Klacking
                        Township, Ogemaw County, Michigan.

WINTERFIELD '12'              (xvii) The 3-inch natural gas pipeline,
PIPELINE                approximately 2.02 miles long, extending from the
                        Winterfield '12' Tap Site in the Southeast quarter of
                        Section 7, T20N, R5W, Summerfield Township, Clare
                        County, Michigan, in a general Northwesterly direction
                        across a portion of Section 7, T20N, R5W, Summerfield
                        Township, Clare County, and Section 12, T20N, R6W,
                        Winterfield Township, Clare County, to the Winterfield
                        '12' Purchase Meter Station Site in the Northwest
                        quarter of Section 12, Winterfield Township, Clare
                        County, Michigan.

                                     THIRD

NATURAL GAS                   All right, title and interest of the Company in
PURCHASE CONTRACTS      and under a certain Service Agreement for the purchase
                        of natural gas dated as of December 14, 1987, between
                        the Company and ANR Pipeline Company, which supersedes
                        the Service Agreement between the Company and Michigan
                        Wisconsin Pipe Line Company dated as of March 14, 1983.

RECORDING AND FILING

The Twenty-ninth Supplemental Indenture was recorded as a Real Estate Mortgage in the office of the Register of Deeds in each of the counties set forth below and filed in the office of the Michigan Department of State:

COUNTY                                                               DATE        LIBER         PAGE
------                                                               ----        -----         ----
ALCONA .....................................................        8/3/89        227        864-995
                                                                                  228           l-81
ALGER ......................................................        8/3/89         82        274-486
ALLEGAN ....................................................        8/3/89       1228          6-218
ALPENA .....................................................        8/2/89        214        149-361
ANTRIM .....................................................        8/3/89        341      1036-1248
ARENAC .....................................................        8/2/89        133        151-363
BARRY ......................................................        8/2/89        486          1-213
BAY ........................................................        8/2/89       1116        742-953
BENZIE .....................................................        8/2/89        236         96-308
CALHOUN ....................................................        8/2/89       1499       889-1000
                                                                                 1500          1-100
CHARLEVOIX .................................................        8/2/89        210        414-626
CHEBOYGAN ..................................................        8/4/89        512          1-213
CHIPPEWA ...................................................        8/2/89        529          1-213
CLARE ......................................................        8/2/89        177         53-265
CLINTON ....................................................        8/2/89        494         89-301
CRAWFORD ...................................................        8/4/89        300          1-213
DELTA ......................................................        8/2/89        333        129-341
DICKINSON ..................................................        8/2/89        170        645-857
EATON ......................................................        8/3/89        803        263-475
EMMET ......................................................        8/2/89        414        692-904
GLADWIN ....................................................        8/2/89        138        192-404
GRAND TRAVERSE .............................................        8/2/89        780        422-634
GRATIOT ....................................................        8/3/89        488    1  085-1297
HILLSDALE ..................................................        8/2/89        600        320-532
HURON ......................................................        8/2/89        527        155-367
INGHAM .....................................................        8/2/89       1768        126-338
IONIA ......................................................        8/2/89        420        327-539
IOSCO ......................................................        8/2/89        383          1-213
IRON .......................................................        8/3/89        148        564-600
                                                                                  149          1-176
ISABELLA ...................................................        8/2/89        660        133-345
JACKSON ....................................................        8/3/89       1204        523-735
KALAMAZOO ..................................................        8/4/89       1421        450-662
KALKASKA ...................................................        8/3/89        274        462-675
KENT .......................................................        8/3/89       2651       992-1204
LAKE .......................................................        8/2/89        192        619-831
LAPEER .....................................................        8/2/89        666        616-828
LEELANAU ...................................................        8/2/89        301        422-634
LENAWEE ....................................................        8/2/89       1105        664-876
LIVINGSTON .................................................        8/2/89       1357        347-559
MACOMB .....................................................        8/2/89       4695          l-213
MANISTEE ...................................................        8/4/89        521        620-832
MARQUETTE ..................................................        8/2/89        420        712-924

193

Also all right, title and interest of the Company as purchaser of natural gas under the following described contracts:

Seller                                                      Date of Contract
------                                                      ----------------
Union Oil Company of California                             January 1, 1986
Petrostar Energy                                            June 15, 1986
Bob Adams & Associates, Inc.                                November 1, 1986
Southern Michigan Oil Company, Inc.                         November 1, 1986
Empire Oil and Gas 2 Ltd.                                   November 10, 1986
Shell Western E&P Inc.                                      April 1, 1987
Petrostar Energy                                            June 22, 1987
Petrostar Energy                                            June 22, 1987
Amoco Production Company                                    July 1, 1987
Preston Oil Company and Pangbom
   Exploration                                              July 1, 1987
Shell Western E&P Inc.                                      July 1, 1987
Terra Energy Ltd.                                           July 1, 1987
Three Star Energy, Inc.                                     July 1, 1987
Marathon Oil Company                                        January 1, 1988
Tongue, Schuster & Associates, Inc.                         August 1, 1988
Jennings Petroleum Company                                  December 1, 1988
West Bay Exploration Company                                December 1, 1988

COUNTY                                                                DATE         LIBER           PAGE
------                                                                ----         -----           ----
MASON .......................................................        8/3/89        383           121-332
MECOSTA .....................................................        8/3/89        477           379-591
MENOMINEE ...................................................        8/2/89        298            10-222
MIDLAND .....................................................        8/2/89        619           530-742
MISSAUKEE ...................................................        8/2/89        257          914-1126
MONROE ......................................................        8/2/89       1087            22-234
MONTCALM ....................................................        8/3/89        635            87-299
MONTMORENCY .................................................        8/2/89         78           174-386
MUSKEGON ....................................................        8/2/89       1484           185-397
NEWAYGO .....................................................        8/2/89        348         9687-9899
OAKLAND .....................................................        8/3/89      11005          835-1047
OCEANA ......................................................        8/2/89   Document Nos.    895258-895470
OGEMAW ......................................................        8/2/89        346            98-310
OSCEOLA .....................................................        8/2/89        511           604-816
OSCODA ......................................................        8/2/89         57           158-370
OTSEGO ......................................................        8/2/89        432           444-656
OTTAWA ......................................................        8/2/89       1351             1-213
PRESQUE ISLE ................................................        8/2/89        113           391-603
ROSCOMMON ...................................................        8/2/89        553           615-827
ST. CLAIR ...................................................        8/2/89        936             1-213
SANILAC .....................................................        8/2/89        404           633-845
SHIAWASSEE ..................................................        8/2/89        671           534-746
TUSCOLA .....................................................        8/2/89        594         1080-1292
WASHTENAW ...................................................        8/2/89       2336           494-706
WAYNE .......................................................        8/2/89      24280            93-305
WEXFORD .....................................................        8/2/89        229             1-213
SECRETARY OF STATE ..........................................        8/2/89    Document No.       96733A

Exhibit 4.3

SUPPLEMENTAL INDENTURE

FROM

MICHIGAN CONSOLIDATED GAS COMPANY

CITIBANK, N.A.

TRUSTEE

Dated as of -

SUPPLEMENT TO INDENTURE

Dated as of -

Providing for

[-%][Floating Rate] Senior Notes due -

This SUPPLEMENTAL INDENTURE is made as of the - day of -, 20-, by and between MICHIGAN CONSOLIDATED GAS COMPANY, a corporation duly organized and existing under the laws of the State of Michigan (the "Company"), and CITIBANK, N.A., a national banking association incorporated and existing under and by virtue of the laws of the United States of America, as trustee (the "Trustee").

RECITALS OF THE COMPANY:

WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of June 1, 1998 (the "Original Indenture"), as amended, supplemented and modified (as so amended, supplemented and modified, the "Indenture"), providing for the issuance by the Company from time to time of its senior debt securities; and

WHEREAS, the Company desires to provide for the issuance of a series of its senior debt securities pursuant to the Indenture; and

WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Original Indenture, including Section 10.1 thereof, and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Trustee this Supplemental Indenture to the Original Indenture as permitted by
Section 2.1 and Section 3.1 of the Original Indenture in order to establish the form or terms of, and to provide for the creation and issue of, a series of its senior debt securities under the Original Indenture, which shall be known as the "[-%][Floating Rate] Senior Notes due -" (the "Senior Notes" or the "Securities"); and

WHEREAS, all things necessary to make such senior debt securities, when executed by the Company and authenticated and delivered by the Trustee or any Authenticating Agent and issued upon the terms and subject to the conditions hereinafter and in the Original Indenture set forth against payment therefor, the valid, binding and legal obligations of the Company and to make this Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE that, in order to establish the terms of a series of senior debt securities, and for and in consideration of the premises and of the covenants contained in the Original Indenture and in this Supplemental Indenture and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, it is mutually covenanted and agreed as follows:

ARTICLE I
RELATION TO INDENTURE; DEFINITIONS

SECTION 1.01.

This Supplemental Indenture constitutes an integral part of the Indenture.

SECTION 1.02.

For all purposes of this Supplemental Indenture:

(a) Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned to such terms in the Indenture;

(b) All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Supplemental Indenture; and

(c) The terms "hereof, " "herein, " "hereby, " "hereto, " "hereunder, " and "herewith" refer to this Supplemental Indenture.

ARTICLE II
THE SECURITIES

This Supplemental Indenture hereby established a series of Securities, known as and entitled "[-%][Floating Rate] Senior Notes due -." The aggregate principal amount of the Securities shall be limited to - Dollars ($-). The form of Securities is attached hereto as Appendix I.

ARTICLE III
TRANSFER OF COLLATERAL BONDS

The Company hereby issues, delivers and transfers to the Trustee in connection with the issuance of the Securities, - Dollars ($-) aggregate principal amount of a related issue of Collateral Bonds of the Company designated "First Mortgage Bonds, Collateral Series -" (the "Related Issue of Collateral Bonds" or "Collateral Bonds"), which has been fully registered in the name of the Trustee in such capacity, to be held in trust for the benefit of the Holders from time to time of the Securities, as security for any and all obligations of the Company in respect of the Securities of this series under the Indenture, this Supplemental Indenture and the Securities, including but not limited to (1) the full and prompt payment of the interest on, principal of, and premium, if any, on the Securities when and as the same shall become due and payable in accordance with the terms and provisions of the Indenture and this Supplemental Indenture and the Securities, either at the stated maturity, upon acceleration of the maturity or upon redemption of the Securities, and (2) the full and prompt payment of any interest on the Securities when and as the same shall become due and payable in accordance with the terms and provisions of the Indenture and this Supplemental Indenture and the Securities. The Trustee shall enforce all of its rights under the First Mortgage Indenture as a holder of the Related Issue of Collateral Bonds transferred to it as provided in this Article III for the benefit of the Holders of the Securities and the proceeds of the enforcement of such rights shall be applied by the Trustee to satisfy the Company's obligations under the Indenture, this Supplemental Indenture and the Securities.

The Company shall make payments of the principal of, and premium or interest on, the Collateral Bonds to the Trustee, which payments shall be applied by the Trustee to satisfaction of all obligations then due on the Securities.

The Collateral Bonds shall not be sold or transferred by the Trustee until the earlier of the Release Date or the prior retirement of the Securities through redemption, repurchase or otherwise. The "Release Date" shall be the date that all First Mortgage Bonds of the Company issued and outstanding under the First Mortgage Indenture, other than the Collateral Bond, have been retired (at, before or after the maturity thereof) through payment, redemption or otherwise provided that no default or Event of Default has occurred and, at such time, is continuing under the Indenture.

[ARTICLE IV
COVENANTS

SECTION 4.01.

The covenant set forth in Section 11.10 of the Indenture shall apply to the Securities of this series only from and after the Release Date (unless Substituted Collateral Bonds are issued to secure the Securities from and after the Release Date); provided, that, in any case, the Company may issue, assume or guarantee Indebtedness secured by a Lien not otherwise permitted under
Section 11.10 so long as it effectively secures all applicable series of Securities equally and ratably with such Indebtedness.

SECTION 4.02.

The covenant set forth in Section 11.11 of the Indenture shall apply to the Securities of this series only from and after the Release Date (unless Substituted Collateral Bonds are issued to secure the Securities from and after the Release Date).]

ARTICLE V
MISCELLANEOUS

SECTION 5.01.

The Trustee has accepted the amendment of the Indenture effected by this Supplemental Indenture and agrees to execute the trust created by the Indenture as hereby amended, but only upon the terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee, and without limiting the generality of the foregoing, the Trustee shall not be responsible in any manner whatsoever for or with respect of any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Company, or for or with respect to (a) the validity or sufficiency of this Supplemental Indenture or any of the terms or provisions hereof, (b) the proper authorization hereof by the Company by corporate action or otherwise, and (c) the due execution hereof by the Company.

SECTION 5.02.

This Supplemental Indenture shall be construed in connection with and as a part of the Indenture and shall be governed by and construed in accordance with the laws (other than the choice of law provisions) of the State of New York.

SECTION 5.03.

(a) If any provision of this Supplemental Indenture conflicts with another provision of the Indenture required to be included in indentures qualified under the Trust Indenture Act of 1939, as amended (as enacted prior to the date of this Supplemental Indenture), by any of the provisions of Section 310 to 317, inclusive, of said act, such required provision shall control.

(b) In case any one or more of the provisions contained in this Supplemental Indenture or in the Securities issued hereunder should be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected, impaired, prejudiced or disturbed thereby.

SECTION 5.04.

Whenever in this Supplemental Indenture either of the parties hereto is named or referred to, such name or reference shall be deemed to include the successors or assigns of such party, and all the covenants and agreements contained in this Supplemental Indenture by or on behalf

of the Company or by or on behalf of the Trustee shall bind and inure to the benefit of the respective successors and assigns of such parties, whether so expressed or not.

SECTION 5.05.

(a) This Supplemental Indenture may be simultaneously executed in several counterparts, and all such counterparts executed and delivered, each as an original, shall constitute but one and the same instrument.

(b) The descriptive headings of the several Articles of this Supplemental Indenture were formulated, used and inserted in this Supplemental Indenture for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused this Supplemental Indenture to be executed by its duly authorized Officer, its corporate seal to be hereunto affixed and duly attested by its [Secretary]
[Assistant Secretary], and CITIBANK, N.A., as Trustee as aforesaid, has caused this Supplemental Indenture to be executed by one of its authorized signatories, as of -, -, 20-.

MICHIGAN CONSOLIDATED GAS COMPANY

By:

Name:

Title:

ATTEST:

Secretary

CITIBANK, N.A., as Trustee

By:

Name:

Title:

ATTEST:

Authorized Officer

Appendix I

FORM OF SECURITIES

[The Form of Securities is set forth in Article II of the Original Indenture.]

I-1

EXHIBIT 4.4

SUPPLEMENTAL INDENTURE
TO
INDENTURE OF MORTGAGE AND
DEED OF TRUST
DATED AS OF MARCH 1, 1944

AS RESTATED IN
PART II OF THE TWENTY-NINTH
SUPPLEMENTAL INDENTURE DATED AS OF JULY 15, 1989
WHICH BECAME EFFECTIVE ON APRIL 1, 1994

MICHIGAN CONSOLIDATED GAS COMPANY

CITIBANK, N.A.

AND

ROBERT T. KIRCHNER

TRUSTEES

DATED AS OF -, 20-

CREATING AN ISSUE OF FIRST MORTGAGE BONDS,
DESIGNATED AS

COLLATERAL BONDS

MICHIGAN CONSOLIDATED GAS COMPANY

- SUPPLEMENTAL INDENTURE DATED AS OF -, 20- SUPPLEMENTAL TO INDENTURE OF MORTGAGE AND DEED OF TRUST DATED AS OF MARCH 1, 1944

TABLE OF CONTENTS*

                                                                                                               PAGE
ARTICLE I ESTABLISHMENT OF AN ISSUE OF FIRST MORTGAGE BONDS, DESIGNATED AND
   DISTINGUISHED AS "COLLATERAL BONDS"............................................................................4

         SECTION 1................................................................................................4
         SECTION 2................................................................................................5
         SECTION 3................................................................................................6
         SECTION 4................................................................................................6
         SECTION 5................................................................................................7

ARTICLE II ISSUE OF COLLATERAL BONDS..............................................................................7


ARTICLE III THE TRUSTEES..........................................................................................7


ARTICLE IV MISCELLANEOUS PROVISIONS...............................................................................7

* NOTE: The Table of Contents is not part of the original Indenture as executed.

THIS - SUPPLEMENTAL INDENTURE, dated as of the - day of -, 20-, between MICHIGAN CONSOLIDATED GAS COMPANY, a corporation duly organized and existing under and by virtue of the laws of the State of Michigan (hereinafter called the "Company"), having its principal place of business at 500 Griswold Street, Detroit, Michigan, and CITIBANK, N.A. (formerly First National City Bank), a national banking association incorporated and existing under and by virtue of the laws of the United States of America, having an office at 111 Wall Street in the Borough of Manhattan, The City of New York, New York, successor to CITY BANK FARMERS TRUST COMPANY (hereinafter with its predecessors as trustee called the "Mortgage Trustee"), and ROBERT T. KIRCHNER, having an office at 120 Wall Street, 13th Floor, New York, New York, successor to RALPH E. MORTON, as individual trustee (hereinafter with his predecessors as individual trustee called the "Individual Trustee"), as Trustees under the Indenture hereinafter mentioned (the Mortgage Trustee and Individual Trustee being hereinafter together referred to as the "Trustees"):

WHEREAS, the Company has heretofore executed and delivered to the Trustees an Indenture of Mortgage and Deed of Trust (the "Original Indenture"), dated as of March 1, 1944;

WHEREAS, the Company has heretofore executed and delivered to the Trustees the Twenty-ninth Supplemental Indenture, which became effective April 1, 1994, to provide for the modification and restatement of the Original Indenture as previously amended (as so amended, supplemented and modified the "Indenture"), and to secure the Company's First Mortgage Bonds, unlimited in aggregate principal amount except as therein otherwise provided, issued pursuant to the:

Thirtieth Supplemental Indenture, dated as of September 1, 1991; Thirty-first Supplemental Indenture, dated as of December 15, 1991; Thirty-second Supplemental Indenture, dated as of January 5, 1993; Thirty-third Supplemental Indenture, dated as of May 1, 1995; Thirty-fourth Supplemental Indenture, dated as of November 1, 1996; and Thirty-fifth Supplemental Indenture, dated as of June 18, 1998;

WHEREAS, at the date hereof there were outstanding First Mortgage Bonds of the Company issued under the Indenture, of - series (all the outstanding bonds of all other series having been previously retired) in the principal amounts set forth below:

                                                                              AMOUNT
                                                       AMOUNT               OUTSTANDING
DESIGNATION OF SERIES                             INITIALLY ISSUED          AS OF -/-/-
---------------------                             ----------------          -----------

and

WHEREAS, the Company desires in and by this Supplemental Indenture to establish an issue of bonds to be issued under the Indenture of the series established under the Thirty-fifth Supplemental Indenture, to designate the terms thereof, to specify the particulars necessary to describe and define the same and to specify such other provisions and agreements in respect thereof as are in the Indenture provided or permitted; and

WHEREAS, all the conditions and requirements necessary to make this Supplemental Indenture, when duly executed and delivered, a valid, binding and legal instrument in accordance with its terms and for the purposes herein expressed, have been done, performed and fulfilled, and the execution and delivery of this Supplemental Indenture in the form and with the terms hereof have been in all respects duly authorized;

NOW, THEREFORE, it is agreed by and between the Company and the Trustees as follows:

ARTICLE I
ESTABLISHMENT OF AN ISSUE OF FIRST MORTGAGE BONDS, DESIGNATED AND
DISTINGUISHED AS "COLLATERAL BONDS"

SECTION 1. There is hereby established an issue of bonds to be issued under and secured by the Indenture, to be known as "First Mortgage Bonds," designated and distinguished as "Collateral Bonds" of the Company (herein collectively sometimes called the "Collateral Bonds") of the series established under the Thirty-fifth Supplemental Indenture. The Collateral Bonds may be issued without limitation as to aggregate principal amount except as provided in the Indenture (including the Thirty-fifth Supplemental Indenture) and in this Supplemental Indenture. The Collateral Bonds shall be registered bonds without coupons and shall be dated as of the date of the authentication thereof by the Mortgage Trustee.

A separate issue of Collateral Bonds is being issued by the Company hereunder contemporaneously with the issuance of a separate series of senior debt securities of the Company designated as the Company's "[-%][Floating Rate] Senior Notes due -" (the "Senior Notes") and is being issued and delivered to Citibank, N.A., as trustee (in such capacity, together with any successor trustee(s), the "Senior Trustee") under the Indenture, dated as of June 1, 1998, as amended, supplemented and modified, governing such senior debt securities (as so amended, supplemented and modified, the "Senior Indenture"), in such capacity, as collateral for the benefit of the holders of the Senior Notes. The series of such senior debt securities collateralized by any Collateral Bonds issued hereunder shall be referred to as the "Related Notes" with respect to such Collateral Bonds.

The Collateral Bonds shall bear interest at such rate or rates and be payable on such date or dates, shall mature and be subject to mandatory or optional redemption on such date or dates and shall have such other terms and provisions not inconsistent with the Indenture as are set forth in the form of Collateral Bonds attached as Appendix I hereto (herein sometimes called the "Bond Form").

So long as there is no existing default in the payment of interest on the Collateral Bonds, all Collateral Bonds authenticated by the Trustee after the Record Date specified for any interest payment date, and prior to such interest payment date (unless the issue date hereinafter specified is after such Record Date) shall be dated the date of authentication, but shall bear interest from such interest payment date, and the person in whose name any Collateral Bond is registered at the close of business on any Record Date with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding any transfer or exchange of such Collateral Bond subsequent to the Record Date and on or prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name such Collateral Bond is registered on the Record Date for the interest payment date fixed by the Company for the payment of such defaulted interest, provided that in no case shall such Record Date be less than ten days after notice thereof shall have been mailed to all registered holders of Collateral Bonds; and provided that interest payable on a maturity date shall be payable to the person to whom the principal thereof is payable. If the issue date of any Collateral Bond is after such Record Date, such Bond shall bear interest from the issue date but payment of interest shall commence on the second interest payment date next succeeding the issue date. Any notice which is mailed as herein provided shall be conclusively presumed to have been properly and sufficiently given on the date of such mailing, whether or not the holder receives notice.

The terms "Record Date" and "Business Day" as used herein are defined in the Bond Form.

The term "issue date" as used herein with respect to Collateral Bonds of a designated interest rate and maturity shall mean the date of first authentication of Collateral Bonds of such designated interest rate and maturity.

As used in this Section 1, the term "default in the payment of interest" means failure to pay interest on the applicable interest payment date disregarding any period of grace permitted by Section 9.01 of the Indenture.

The Company shall make payments of the principal of, and premium or interest on, the Collateral Bonds to the Senior Trustee, which payments shall be applied by the Senior Trustee to satisfaction of obligations on the Related Notes in respect of such Collateral Bonds.

SECTION 2. The Collateral Bonds shall be redeemed if and to the extent the Related Notes with respect to such Collateral Bonds are redeemed, as provided in the Senior Indenture and in such Related Notes. The redemption price in respect of any Collateral Bonds (including

principal, premium, if any, and interest thereon) shall be the redemption price applicable to the Related Notes with respect to such Collateral Bonds. Any notice required to be furnished to the holders of the Collateral Bonds or the Trustees relating to the redemption of such Collateral Bonds shall be considered furnished by the delivery of appropriate notice to the holders of the Related Notes or the Senior Trustee, as the case may be, as provided in the Senior Indenture and the Related Notes with respect to such Collateral Bonds. Any redemption payment made by the Company on the Related Notes (whether for principal, premium, if any, or interest) shall be applied by the Senior Trustee as payment of the redemption price in respect of the correspondingly redeemed Collateral Bonds. In the event the Related Notes with respect to a series of Collateral Bonds are redeemed in part, an equivalent aggregate principal amount of the corresponding series of Collateral Bonds shall be so redeemed, the Senior Trustee, as holder of the Collateral Bonds as collateral for such Related Notes, shall deliver to the Mortgage Trustee for cancellation an equivalent principal amount of Collateral Bonds of the series corresponding to the Related Notes so redeemed, and the Company shall execute and the Mortgage Trustee shall authenticate and deliver, without charge, to the Senior Trustee, as holder thereof, one or more new Collateral Bonds of authorized denominations for the unredeemed balance of any Collateral Bonds surrendered for redemption in connection with the redemption of the Related Notes.

SECTION 3. The Collateral Bonds shall be registered bonds without coupons. The Mortgage Trustee shall be the registrar and paying agent for the Collateral Bonds, which duties it hereby accepts. Collateral Bonds may be issued in the denomination of $1,000 or any integral multiple thereof.

SECTION 4. The Collateral Bonds shall be exchangeable, at the option of the registered owners thereof and upon surrender thereof at the corporate trust office of the Trustee in the Borough of Manhattan, The City of New York, New York, for registered bonds of the same aggregate principal amount and other terms, but of different authorized denomination or denominations, such exchanges to be made without service charge (except for any stamp tax or other governmental charge).

Every bond so surrendered shall be accompanied by a proper transfer power duly executed by the registered owner or by duly authorized attorney transferring such bond to the Company, and the signature to such transfer power shall be guaranteed to the satisfaction of the Trustee. All bonds so surrendered shall be forthwith canceled and delivered to or upon the order of the Company. All bonds executed, authenticated and delivered in exchange for bonds so surrendered shall be valid obligations of the Company, evidencing the same debt as the bonds surrendered, and shall be secured by the same lien and be entitled to the same benefits and protection as the bonds in exchange for which they are executed, authenticated and delivered.

The Company shall not be required to make any such exchange or any registration of transfer (1) during a period of fifteen days next preceding any interest payment date, but only if there is an existing default in the payment of interest on the Collateral Bonds on which such payment is due or (2) after the bond so presented for exchange or registration of transfer, or any portion thereof, has been called for redemption and notice thereof given to the registered owner.

SECTION 5. Pending the preparation of definitive Collateral Bonds, the Company may from time to time execute, and upon its written order, the Trustee shall authenticate and deliver, in lieu of such definitive bonds and subject to the same provisions, limitations and conditions, one or more temporary bonds, in registered form, of any denomination specified in the written order of the Company for the authentication and delivery thereof, and with such omissions, insertions and variations as may be determined by the Board of Directors of the Company. Such temporary bonds shall be substantially of the tenor of the bonds to be issued as herein before recited, but such temporary bonds may, in lieu of the statement of the specific redemption prices required to be set forth in Collateral Bonds in definitive form.

If any such temporary Collateral Bonds shall at any time be so authenticated and delivered in lieu of definitive bonds, the Company shall upon request at its own expense prepare, execute and deliver to the Trustee and thereupon, upon the presentation and surrender of temporary bonds, the Trustee shall authenticate and deliver in exchange therefor, without charge to the holder, definitive bonds of the same series and other terms, if any, and for the same principal sum in the aggregate as the temporary bonds surrendered. All temporary bonds so surrendered shall be forthwith canceled by the Trustee and delivered to or upon the order of the Company. Until exchanged for definitive bonds the temporary bonds shall in all respects be entitled to the lien and security of the Indenture and all supplemental indentures.

ARTICLE II
ISSUE OF COLLATERAL BONDS

Collateral Bonds in the aggregate principal amount of $-, in respect of the Related Notes, may be executed, authenticated and delivered from time to time as permitted by the provisions of the Indenture.

ARTICLE III
THE TRUSTEES

The Trustees shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company, or for or in respect of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company.

Except as herein otherwise provided, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustees by reason of this Supplemental Indenture other than as set forth in the Indenture and this Supplemental Indenture is executed and accepted on behalf of the Trustees, subject to all the terms and conditions set forth in the Indenture, as fully to all intents as if the same were herein set forth at length.

ARTICLE IV
MISCELLANEOUS PROVISIONS

Except insofar as herein otherwise expressly provided, all the provisions, terms and conditions of the Indenture shall be deemed to be incorporated in, and made a part of, this - Supplemental Indenture and the Twenty-ninth Supplemental Indenture dated as of July 15, 1989, by the Thirtieth Supplemental Indenture dated as of September 1, 1991, by the Thirty-first

Supplemental Indenture dated as of December 15, 1991, by the Thirty-second Supplemental Indenture dated as of January 5, 1993, by the Thirty-third Supplemental Indenture dated as of May 1, 1995, by the Thirty-fourth Supplemental Indenture dated as of November 1, 1996, by the Thirty-fifth Supplemental Indenture dated as of June 18, 1998 and by this Supplemental Indenture is in all respects ratified and confirmed; and the Indenture and said Supplemental Indentures shall be read, taken and construed as one and the same instrument.

Except to the extent specifically provided therein, no provision of this Supplemental Indenture or any future supplemental indenture is intended to modify, and the parties do hereby adopt and confirm, the provisions of Section 318(c) of the Trust Indenture Act, which amend and supersede provisions of the Indenture in effect prior to November 15, 1990.

Nothing in this Supplemental Indenture is intended, or shall be construed, to give to any person or corporation, other than the parties hereto and the holders of Collateral Bonds issued and to be issued under and secured by the Indenture, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture, or under any covenant, condition or provision herein contained, all the covenants, conditions and provisions of this Supplemental Indenture being intended to be, and being, for the sole and exclusive benefit of the parties hereto and of the holders of bonds issued and to be issued under the Indenture and secured thereby.

All covenants, promises and agreements in this Supplemental Indenture contained by or on behalf of the Company shall bind its successors and assigns whether so expressed or not.

This Supplemental Indenture may be executed in any number of counterparts, and each of such counterparts when so executed shall be deemed to be an original; but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused this Supplemental Indenture to be executed by its duly authorized Officer, and its corporate seal to be hereunto affixed, duly attested by its
[Secretary][Assistant Secretary], and Citibank, N.A., as Mortgage Trustee as aforesaid, has caused the same to be executed by one of its authorized signatories and its corporate seal to be hereunto affixed, duly attested by another one of its authorized signatories, and Robert T. Kirchner, as Individual Trustee as aforesaid, has hereunto affixed his signature, on the respective dates of their acknowledgments hereinafter set forth, as of the date and year first above written.

MICHIGAN CONSOLIDATED GAS COMPANY

By                                       Attest:
      --------------------------                  ------------------------------
        Name:                                     Name:

Tile: Title:

Signed, sealed, acknowledged and
delivered by MICHIGAN CONSOLIDATED
GAS COMPANY in the presence of:

Citibank, N.A., as Mortgage Trustee,

By Attest:

Robert T. Kirchner
as Individual Trustee
111 Wall Street, 5th Floor
New York, New York

Signed, sealed, acknowledged and delivered by CITIBANK, N.A. and ROBERT T. KIRCHNER, in the presence of:

State of Michigan }
} ss.
County of Wayne }

The foregoing instrument was acknowledged before me this - day of -, by -, of MICHIGAN CONSOLIDATED GAS COMPANY, a Michigan corporation, on behalf of the corporation.

                                         Notary Public, Wayne County, Michigan
                                         My Commission Expires:

State of New York   }
                    } ss.
County of New York  }

The foregoing instrument was acknowledged before me this - day of -, -, by -, on behalf of the association, as Trustee, and Robert T. Kirchner, as Individual Trustee as in said instrument described.

Notary Public, State of New York No.

Commission Expires:

APPENDIX I

FORM OF COLLATERAL BOND

No. R-1                                                         Principal Amount

                                                                $
                                                                 -------------

MICHIGAN CONSOLIDATED GAS COMPANY
FIRST MORTGAGE BONDS, COLLATERAL SERIES __
being a series of
FIRST MORTGAGE BONDS

ORIGINAL ISSUE DATE:                                MATURITY DATE:
                     ------------                                 --------------

THE FIRST MORTGAGE BONDS, COLLATERAL SERIES    (HEREINAFTER, "COLLATERAL

BONDS"), REPRESENTED BY THIS CERTIFICATE ARE BEING ISSUED AND DELIVERED BY THE COMPANY TO CITIBANK, N.A., AS TRUSTEE (IN SUCH CAPACITY, THE "SENIOR TRUSTEE") UNDER AN INDENTURE, DATED AS OF JUNE 1, 1998, BETWEEN THE COMPANY AND THE SENIOR TRUSTEE, AS AMENDED, SUPPLEMENTED AND MODIFIED FROM TIME TO TIME AND AS SUPPLEMENTED BY THE SUPPLEMENTAL INDENTURE THERETO DATED AS OF (AS SO AMENDED, SUPPLEMENTED AND MODIFIED, THE "SENIOR INDENTURE"). THE COLLATERAL BONDS ARE TO BE HELD IN TRUST AS COLLATERAL FOR THE BENEFIT OF THE HOLDERS OF $- AGGREGATE PRINCIPAL AMOUNT OF - NOTES DUE - (THE "RELATED NOTES") ISSUED PURSUANT TO THE SENIOR INDENTURE.

THE COLLATERAL BONDS MAY NOT BE SOLD OR OTHERWISE TRANSFERRED (EXCEPT TO A SUCCESSOR TRUSTEE) UNTIL THE EARLIER OF THE RELEASE DATE (AS DEFINED BELOW) OR THE PRIOR RETIREMENT OF THE RELATED NOTES THROUGH REDEMPTION, REPURCHASE OR OTHERWISE.

THE INTEREST RATE ON THE COLLATERAL BONDS SHALL AT ALL TIMES BE IDENTICAL TO THAT OF, AND SHALL BE ESTABLISHED IN THE MANNER SET FORTH IN, THE RELATED NOTES, A FORM OF WHICH IS ANNEXED HERETO AS APPENDIX I.

THE INTEREST PAYMENT DATES IN RESPECT OF THE COLLATERAL BONDS SHALL AT ALL TIMES BE IDENTICAL TO THOSE OF, AND SHALL BE ESTABLISHED IN THE MANNER SET FORTH IN, THE RELATED NOTES.

THE COMPANY SHALL MAKE PAYMENTS OF THE PRINCIPAL OF, AND PREMIUM, IF ANY, AND INTEREST ON, THE COLLATERAL BONDS, TO THE SENIOR TRUSTEE, WHICH PAYMENTS SHALL BE APPLIED BY THE SENIOR TRUSTEE TO THE SATISFACTION OF OBLIGATIONS ON THE RELATED NOTES.

I-1

THE MATURITY DATE SPECIFIED ABOVE IS ALSO THE MATURITY DATE OF THE RELATED BONDS.

MICHIGAN CONSOLIDATED GAS COMPANY (hereinafter called the "Company"), a corporation of the State of Michigan, for value received, hereby promises to pay to CITIBANK, N.A., as trustee for the benefit of the holders of the Related Notes, or registered assigns (in such capacity, the "Senior Trustee"), the sum of Dollars ($ ) on the Maturity Date specified above, at the corporate trust office of the Mortgage Trustee hereinafter named in the Borough of Manhattan, The City of New York, New York, or at the principal office of any successor in trust, in lawful money of the United States of America, and to pay interest thereon at the Interest Rate(s) from time to time specified in or determined pursuant to the Related Notes, in like lawful money payable at the office or agency of the Company in the Borough of Manhattan, The City of New York, New York on such interest payment date(s) and on the Maturity Date (each an "Interest Payment Date") as provided in the Related Notes, from the Original Issue Date specified above or from the most recent Interest Payment Date to which interest has been paid, commencing on the Interest Payment Date next succeeding the Original Issue Date, until the Company's obligation with respect to the payment of such principal sum shall be discharged as provided in the Secured Indenture hereinafter mentioned and the Senior Indenture. If the date of the Collateral Bonds represented by this certificate is after a Record Date (as defined below) with respect to any Interest Payment Date and prior to such Interest Payment Date, then payment of interest shall commence on the second Interest Payment Date succeeding such date. If the Company shall default in the payment of interest due on any Interest Payment Date, then interest shall be payable from the next preceding Interest Payment Date to which interest has been paid, or, if no such interest has been paid on the Collateral Bonds represented by this certificate, from the Original Issue Date. So long as there is no existing default in the payment of interest, the person in whose name the Collateral Bonds represented by this certificate were registered at the close of business on the relevant Record Date with respect to an Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date, except that if the Company shall default in the payment of interest due on such Interest Payment Date, such defaulted interest shall be paid to the person in whose name the Collateral Bonds represented by this Certificate are registered on the Record Date for the Interest Payment Date fixed by the Company for the payment of such defaulted interest, provided that in no case shall such Record Date be less than ten days after notice thereof shall have been mailed to all registered holders of Collateral Bonds. The term "Record Date" as used herein with respect to any Interest Payment Date shall mean the last Business Day which is more than ten calendar days prior to such Interest Payment Date.

"Business Day" means any day other than a Saturday or Sunday or a day on which banking institutions in The City of New York are required or authorized to close and, in the case of Related Notes in the Floating Rate Mode (as defined in the form of Related Note), a day that is also a London Business Day. "London Business Day" means any day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.

The bonds represented by this certificate, of the series hereinafter specified, are bonds of the Company (herein called the "bonds") known as its "First Mortgage Bonds," issued and to be issued in one or more series under, and all equally and ratably secured by, an Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, duly executed by the Company to City

I-2

Bank Farmers Trust Company (now known as Citibank, N.A., successor trustee, as "Mortgage Trustee") and Ralph E. Morton (Robert T. Kirchner, successor individual trustee and, together with Citibank, N.A., the "Secured Trustees") as restated in Part II of the Twenty-ninth Supplemental Indenture dated as of July 15, 1989, which became effective on April 1, 1994, to which indenture and all indentures supplemental thereto executed on and after July 15, 1989 reference is hereby made for a description of the property mortgaged and pledged, the nature and extent of the security, the terms and conditions upon which the bonds are, and are to be, issued and secured, and the rights of the holders of the bonds and of the Secured Trustees in respect of such security (which indenture and all indentures supplemental thereto, including the Thirty-fifth Supplemental Indenture, dated as of June 18, 1998, as supplemented by the Supplemental Indenture dated as of -, are hereinafter collectively called the "Secured Indenture"). As provided in the Secured Indenture, the bonds may be for various principal sums and are issuable in series, which may mature at different times, may bear interest at different rates and may otherwise vary as therein provided. The bonds represented by this certificate are part of a Series designated "Collateral Bonds," herein called Collateral Bonds, created by the Thirty-fifth Supplemental Indenture, dated as of June 18, 1998, as supplemented by the - Supplemental Indenture dated as of -, as provided for in the Secured Indenture.

With the consent of the Company and to the extent permitted by and as provided in the Secured Indenture and the Senior Indenture, the rights and obligations of the Company and/or the rights of the holders of the Collateral Bonds of the - Series and/or the terms and provisions of the Secured Indenture may be modified or altered by such affirmative vote or votes of the holders of the Related Notes then outstanding as are specified in the Senior Indenture.

The Collateral Bonds shall be redeemed if and to the extent Related Notes are redeemed, as provided in the Senior Indenture with respect to the Related Notes and in the Related Notes.

In case an Event of Default as defined in the Secured Indenture or the Senior Indenture shall occur, the principal of the Collateral Bonds may become or be declared due and payable in the manner, with the effect, and subject to the conditions provided in the Secured Indenture and the Senior Indenture.

The Senior Trustee has agreed pursuant to the Senior Indenture to hold the Collateral Bonds as collateral for the benefit of the holders of the Related Notes under all circumstances and not to transfer (except to a successor trustee) such Collateral Bonds until the earlier of the Release Date or the prior retirement of the Related Notes through redemption, repurchase or otherwise. "Release Date" means the date on which all First Mortgage Bonds of the Company issued and outstanding under the Secured Indenture, other than the Collateral Bonds, have been retired (at, before or after the maturity thereof) through payment, redemption or otherwise provided that no default or event of default has occurred and is continuing under the Senior Indenture. On the Release Date, the Senior Trustee shall deliver to the Company for cancellation all Collateral Bonds, and the Company shall cause the Senior Trustee to provide notice to all holders of Related Notes of the occurrence of the Release Date. As a result, on the Release Date, the Collateral Bonds shall cease to secure the Related Notes. Following the Release Date, the Company shall cause the Secured Indenture to be closed, and the Company shall not issue any additional Collateral Bonds to be issued thereunder. From and after the Release Date, the Company's obligations in respect of the Collateral Bonds shall be satisfied and discharged.

I-3

No recourse shall be had for the payment of the principal of, or the interest on, the Collateral Bonds, or for any claim based hereon or otherwise in respect of the Collateral Bonds or the Secured Indenture, Senior Indenture or any indenture supplemental to either thereof, or against any incorporator, stockholder, director or officer, past, present or future, of the Company, as such, or any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being waived and released by the owner hereof and every owner of any Related Note by the acceptance of the Collateral Bonds or such Related Note, as the case may be, and as part of the consideration for the issue thereof, and being likewise waived and released pursuant to the Secured Indenture and the Senior Indenture.

The Collateral Bonds shall not be valid or become obligatory for any purpose unless and until the certificate of authentication hereon shall have been manually executed by the Mortgage Trustee or its successor in trust under the Secured Indenture.

I-4

IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused this certificate to be executed under its name with the signature of its duly authorized Officer, under its corporate seal, which may be a facsimile, attested with the signature of its [Secretary] [Assistant Secretary.]

Dated:

MICHIGAN CONSOLIDATED GAS COMPANY

By:

Attest:

The bonds represented by this certificate constitute Collateral Bonds of the series designated and described in the within-mentioned Secured Indenture.

CITIBANK, N.A., as Mortgage Trustee

By:
Authorized Officer

I-5

EXHIBIT 5.1(a)

[MICHIGAN CONSOLIDATED GAS COMPANY LETTERHEAD]

June 18, 2001

Michigan Consolidated Gas Company
500 Griswold Street
Detroit, Michigan 48226

Ladies and Gentlemen:

With respect to the Registration Statement on Form S-3 (the "Registration Statement") filed by Michigan Consolidated Gas Company, a Michigan corporation (the "Company"), with the Securities and Exchange Commission for the purpose of registering under the Securities Act of 1933, as amended, $360,000,000 aggregate initial public offering price of the Company's Senior Debt Securities (as described in the Prospectus forming a part of the Registration Statement), I, as Associate General Counsel of the Company, in conjunction with the members of the Legal Department of the Company, have examined such certificates, instruments and documents and reviewed such questions of law as I have considered necessary or appropriate for the purposes of this opinion. The Senior Debt Securities will be issued under a Senior Indenture, dated as of June 1, 1998, as amended, supplemented or modified from time to time, between the Company and Citibank, N.A, as trustee (the "Senior Indenture"), and will be secured by the pledge by the Company of First Mortgage Bonds issued under and ratably secured by the Indenture of Mortgage and Deed of Trust, dated as of March 1, 1944, as supplemented and amended, including in particular by the Twenty-ninth Supplemental Indenture providing for, among other things, the modification and restatement of said Indenture, between the Company and Citibank, N.A., as the mortgage trustee, and Robert T. Kirchner, as the individual trustee.

Based upon the foregoing examination and review, it is my opinion that:

1. The Company is duly incorporated and validly existing as a corporation under the laws of the State of Michigan:

2. The Senior Debt Securities have been duly authorized by all requisite action (corporate or otherwise) by the Company, and when (a) the Registration Statement has become effective under the Securities Act of 1933, as amended, (b) the applicable supplemental indentures supplementing the Senior Indenture shall have been duly executed and delivered and, (c) the individual series of Senior Debt Securities shall have been duly executed, authenticated, issued and delivered against payment therefor, the Senior Debt Securities will thereupon be validly issued and binding obligations of the Company.

I am qualified to practice law in the State of Michigan, and in rendering this opinion, my examination of matters of law has been limited to, and I express no opinion as to the laws of any jurisdictions other than, the laws of the State of Michigan and the Federal laws of the United States. Sidley Austin Brown & Wood LLP may rely on this opinion as to matters of Michigan law in rendering their opinion of even date herewith.

June 18, 2001
Michigan Consolidated Gas Company

Page 2

I consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me under the captions "Legal Matters" in the Prospectus, forming a part of the Registration Statement. In giving such consent, I do not thereby admit that I am in the category of persons whose consent is required under Section 7 of the Securities Act.

Very truly yours,

/s/ Thomas A. Hughes
----------------------
Thomas A. Hughes
Associate General Counsel

EXHIBIT 5.1(b)

[SIDLEY AUSTIN BROWN & WOOD LLP LETTERHEAD]

June 18, 2001

Michigan Consolidated Gas Company
500 Griswold Street
Detroit, Michigan 48226

Ladies and Gentlemen:

We have acted as special counsel as to the laws of the State of New York in connection with the filing by Michigan Consolidated Gas Company, a Michigan corporation (the "Company"), of a Registration Statement on Form S-3 (the "Registration Statement") relating to $360,000,000 aggregate initial public offering price of its senior debt securities (the "Senior Debt Securities"). The Senior Debt Securities will be issued under a Senior Indenture, dated as of June 1, 1998, as amended, supplemented or modified from time to time, between the Company and Citibank, N.A, as trustee (the "Senior Indenture"), and will be secured by the pledge by the Company of First Mortgage Bonds issued under and ratably secured by the Indenture of Mortgage and Deed of Trust, dated as of March 1, 1944, as supplemented and amended, including in particular by the Twenty-ninth Supplemental Indenture providing for, among other things, the modification and restatement of said Indenture, between the Company and Citibank, N.A., as the mortgage trustee, and Robert T. Kirchner, as the individual trustee.

We have examined such documents and records and made such investigation as we deemed appropriate or necessary, including examining the Registration Statement and Senior Indenture.

Based upon the foregoing, subject to the limitations set forth herein and having regard for such legal considerations as we deem relevant, we are of the opinion that when the Senior Debt Securities have been duly executed and authenticated in accordance with the terms of the Indenture and, if applicable, a supplemental indenture thereto, and issued and sold as contemplated in the Registration Statement, the Senior Debt Securities will constitute legal, valid and binding obligations of the Company subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and similar laws of general application relating to or affecting the enforcement of creditors' rights and
(ii) the effect of general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, whether considered in a proceeding in equity or at law.

This opinion is confined to and is given on the basis of the laws of the State of New York as they exist on the date hereof. In giving this opinion, we have, with your permission, relied as to matters of Michigan law upon the opinion of Thomas A. Hughes, Associate General Counsel of the Company.

June 18, 2001
Michigan Consolidated Gas Company

Page 2

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended.

Very truly yours,

/s/ SIDLEY AUSTIN BROWN & WOOD LLP

EXHIBIT 10.1

INDEMNIFICATION AGREEMENT

This Indemnification Agreement ("Agreement") is made as of the ____ day of _______________, _______ by and between Michigan Consolidated Gas Company, a Michigan corporation (the "Company"), and __________________, an officer of the Company (the "Indemnitee").

RECITALS

A. The Indemnitee is presently serving as an officer of the Company and the Company desires the Indemnitee to continue in such capacity. The Indemnitee is willing, subject to certain conditions, including without limitation the execution and performance of this Agreement by the Company, to continue in that capacity.

B. In addition to the indemnification to which the Indemnitee is entitled under the Restated Articles of Incorporation (the "Articles") or By-Laws of the Company in effect from time to time, the Company has obtained at its sole expense insurance protecting its officers and directors, including the Indemnitee, against certain losses arising out of actual or threatened actions, suits or proceedings to which such persons may be made or threatened to be made parties. However, as a result of circumstances having no relation to, and beyond the control of, the Company and the Indemnitee, there can be no assurance of the continuation, renewal or scope of that insurance.

Accordingly, and in order to induce the Indemnitee to continue to serve in the Indemnitee's present capacity, the Company and Indemnitee agree as follows:

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1. Continued Service. The Indemnitee will continue to serve as an officer of the Company so long as the Indemnitee is duly elected and qualified in accordance with the By-Laws of the Company in effect from time to time or until the Indemnitee resigns in writing in accordance with applicable law.

2. Initial Indemnity.

(a) The Company shall indemnify the Indemnitee when the Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal, other than an action by or in the right of the Company, by reason of the fact that the Indemnitee is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, against expenses, including attorneys' fees, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by the Indemnitee in connection with such action, suit or proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to the best interests of the Company or its shareholders, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the Indemnitee did not act in good faith and in a manner which the Indemnitee reasonably believed to be in or not opposed to the best interests of the

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Company or its shareholders and, with respect to any criminal action or proceeding, that the Indemnitee had reasonable cause to believe that such conduct was unlawful.

(b) The Company shall indemnify the Indemnitee when the Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that the Indemnitee is or was a director, officer, employee, or agent of the Company, or is or was serving or had agreed to serve at the request of the Company as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, against expenses, including attorneys' fees and amounts paid in settlement actually and reasonably incurred by the Indemnitee in connection with the action or suit, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to the best interests of the Company or its shareholders. Indemnification shall not be made for a claim, issue or matter in which the Indemnitee has been found liable to the Company except to the extent the Court conducting the proceeding or another court of competent jurisdiction shall determine upon application that the Indemnitee is fairly and reasonably entitled to indemnification in view of all relevant circumstances whether or not the Indemnitee met the standard of conduct set forth in this paragraph (b) or was so adjudged liable to the Company, provided that if the Indemnitee was adjudged liable, such indemnification is limited to reasonable expenses incurred.

(c) To the extent that the Indemnitee has been successful, on the merits or otherwise, in defense of any action, suit or proceeding referred to in
Section 2(a) or 2(b) hereof, or in defense of any claim, issue or matter in the action, suit or proceeding, the Indemnitee shall

-3-

be indemnified against actual and reasonable expenses, including attorneys' fees incurred by the Indemnitee in connection with the action, suit or proceeding and an action suit or proceeding brought to enforce the mandatory indemnification provided in this Section.

(d) Any indemnification under Section 2(a) or 2(b) (unless ordered by a court) shall be made by the Company only as authorized in the specific case upon a determination in accordance with Section 4 hereof or any applicable provision of the Restated Articles of Incorporation of the Company in effect from time to time, By-Laws, other agreement, resolution or otherwise. Such determination shall be made (i) by a majority vote of a quorum of the Board of Directors of the Company (the "Board") consisting of directors who are not parties or threatened to be made parties to such action, suit or proceeding or
(ii) if such a quorum is not obtainable, by a majority vote of a committee duly designated by the Board consisting solely of two or more directors not at the time parties or threatened to be made parties to the suit, action, or proceeding or (iii) by independent legal counsel (designated in the manner provided below in this subsection (d)) in a written opinion or (iv) by all independent directors who are not parties to such action, suit or proceeding or (v) by the shareholders of the Company (the "Shareholders"), but shares held by directors, officers, employees or agents who are parties or threatened to be made parties to the action suit or proceeding may not be voted. Independent legal counsel shall be designated by the Board or its Committee in the manner prescribed in
Section 2(d)(i) or 2(d)(ii); provided, however, that if the Board is unable or fails to so designate, such designation shall be made by the Indemnitee subject to the approval of the Company (which approval shall not be unreasonably withheld). In the designation of a committee under subsection 2(d)(ii) or the selection of independent legal counsel by the Board, all directors may participate. Independent

-4-

legal counsel shall not be any person or firm who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee's rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of such independent legal counsel and to indemnify fully such counsel against costs, charges and expenses (including attorneys' and others' fees and expenses) actually and reasonably incurred by such counsel in connection with this Agreement or the opinion of such counsel pursuant hereto.

(e) If the Indemnitee is entitled to indemnification under Section 2(a) or 2(b) for a portion of expenses, including reasonable attorneys' fees, judgments, penalties, fines and amounts paid in settlement, but not for the total amount, the Company shall indemnify the Indemnitee for the portion of the expenses, judgments, penalties, fines or amounts paid in settlement for which the Indemnitee is entitled to be indemnified.

(f) The Company shall pay or reimburse the reasonable expenses (including attorneys' and others' fees and expenses) incurred by the Indemnitee in the Indemnitee's capacity as a director or officer of the Company who is a party or threatened to be made a party to an action, suit or proceeding in advance of the final disposition of such action, suit or proceeding subject to the provisions of and in the manner prescribed by Section 4(b) hereof.

(g) The Company shall not adopt any amendment to the Articles or By-Laws the effect of which would be to deny, diminish or encumber the Indemnitee's rights to indemnity pursuant to the Articles, By-Laws, the Business Corporation Act of the State of Michigan (the "BCA") or any other applicable law as applied to any act or failure to act occurring in whole or in part prior to the date (the "Effective Date") upon which the amendment was approved by the

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Board or the Shareholders, as the case may be. In the event that the Company shall adopt any amendment to the Articles or By-Laws the effect of which is to so deny, diminish or encumber the Indemnitee's rights to indemnity, such amendment shall apply only to acts or failures to act occurring entirely after the Effective Date thereof unless the Indemnitee shall have voted in favor of such adoption as a officer or holder of record of the Company's voting stock, as the case may be.

(h) Upon application to a court by the Indemnitee pursuant to
Section 564c of the BCA, and a determination of such court that the Indemnitee is fairly and reasonably entitled to indemnification, the Company shall pay to the Indemnitee the amount so ordered by the court.

3. Additional Indemnification.

(a) Pursuant to Section 565 of the BCA, without limiting any right which the Indemnitee may have pursuant to Section 2 hereof, the Articles, the By-Laws, the BCA, any policy of insurance or otherwise, but subject to the limitations on the maximum permissible indemnity which may exist under applicable law at the time of any request for indemnity hereunder determined as contemplated by Section 3(a) hereof, the Company shall indemnify the Indemnitee against any amount which the Indemnitee is or becomes legally obligated to pay relating to or arising out of any claim made against the Indemnitee because of any act, failure to act or neglect or breach of duty, including any actual or alleged error, misstatement or misleading statement, which the Indemnitee commits, suffers, permits or acquiesces in while acting in such capacity as an officer or director of the Company, or, at the request of the Company, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The payments which the Company is obligated to make pursuant to this

-6-

Section 3 shall include without limitation damages, judgments, settlements and charges, costs, expenses, expenses of investigation and expenses of defense of legal actions, suits, proceedings or claims and appeals therefrom, and expenses of appeal, attachment or similar bonds; provided, however, that the Company shall not be obligated under this Section 3(a) to make any payment in connection with any claim against the Indemnitee:

(i) to the extent of any fine or similar governmental imposition which the Company is prohibited by applicable law from paying which results from a final nonappealable order; or

(ii) to the extent based upon or attributable to the Indemnitee gaining in fact a personal profit to which the Indemnitee was not legally entitled, including without limitation profits made from the purchase and sale by the Indemnitee of equity securities of the Company which are recoverable by the Company pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, and profits arising from transactions in publicly traded securities of the Company which were effected by the Indemnitee in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended, including Rule 10b-5 promulgated thereunder.

The determination of whether the Indemnitee shall be entitled to indemnification under this Section 3(a) may be, but shall not be required to be, made in accordance with Section 4(a) hereof. If that determination is so made, it shall be binding upon the Company and the Indemnitee for all purposes.

(b) Expenses (including without limitation attorneys' and others' fees and expenses) incurred by Indemnitee in defending any actual or threatened civil or criminal action,

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suit, proceeding or claim shall be paid by the Company in advance of the final disposition thereof as authorized in accordance with Section 4(b) hereof.

4. Certain Procedures Relating to Indemnification and Advancement of Expenses.

(a) Except as otherwise permitted or required by the BCA, for purposes of pursuing the Indemnitee's rights to indemnification under Section
2(a), 2(b) or 3(a) hereof, as the case may be, the Indemnitee may, but shall not be required to, (i) submit to the Board a sworn statement of request for indemnification substantially in the form of Exhibit 1 attached hereto and made a part hereof (the "Indemnification Statement") averring that the Indemnitee is entitled to indemnification hereunder; and (ii) present to the Company reasonable evidence of all expenses for which payment is requested. Submission of an Indemnification Statement to the Board shall create a presumption that the Indemnitee is entitled to indemnification under Section 2(a), 2(b) or 3(a) hereof, as the case may be, and the Board shall be deemed to have determined that the Indemnitee is entitled to such indemnification unless within 30 calendar days after submission of the Indemnification Statement the Board shall determine by vote of a majority of the directors at a meeting at which a quorum is present, based upon clear and convincing evidence (sufficient to rebut the foregoing presumption), and the Indemnitee shall have received notice within such period in writing of such determination, that the Indemnitee is not so entitled to indemnification. No such determination shall be effective unless written notice thereof, disclosing with particularity the evidence in support of the Board's determination, shall have been given to the Indemnitee within 30 calendar days after submission of the Indemnification Statement. The foregoing notice shall be sworn to by all persons who participated in the determination and voted to deny indemnification. The provisions of this

-8-

Section 4(a) are intended to be procedural only and shall not affect the right of the Indemnitee to indemnification under this Agreement, and any determination by the Board that the Indemnitee is not entitled to indemnification and any failure to make the payments requested in the Indemnification Statement shall be subject to judicial review as provided in Section 6 hereof.

(b) For purposes of determining whether to authorize advancement of expenses pursuant to Section 2(e) hereof, the Indemnitee shall submit to the Board a sworn statement of request for advancement of expenses substantially in the form of Exhibit 2 attached hereto and made a part hereof (the "Undertaking"), averring that (i) the Indemnitee, in good faith, believes that the applicable standards of conduct set forth in Section 2(a), 2(b) or 3(a), as the case may be, have been met, (ii) the Indemnitee has reasonably incurred or will reasonably incur actual expenses in defending an actual civil or criminal action, suit, proceeding or claim and (iii) the Indemnitee undertakes to repay such amount if it shall ultimately be determined that the Indemnitee did not meet the applicable standard of conduct or is not entitled to be indemnified by the Company under this Agreement or otherwise. For purposes of requesting advancement of expenses pursuant to Section 3(b) hereof, the Indemnitee may, but shall not be required to, submit an Undertaking or such other form of request as the Indemnitee determines to be appropriate (an "Expense Request"). Upon receipt of an Undertaking or Expense Request, as the case may be, such payments shall immediately be made by the Company provided that a determination is made that facts then known to those making the determination would not preclude indemnification under the BCA. Such determination shall be made within 10 calendar days of the date of receipt by the Company of the Expense Request and shall be made in the manner specified in Section 2(d). No security shall be required in connection with any

-9-

Undertaking or Expense Request and any Undertaking or Expense Request shall be accepted without reference to the Indemnitee's ability to make repayment.

5. Subrogation: Duplication of Payments.

(a) In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

(b) The Company shall not be liable under this Agreement to make any payment in connection with any claim made against the Indemnitee to the extent the Indemnitee has actually received payment (under any insurance policy, the Articles, the By-Laws or otherwise) of the amounts otherwise payable hereunder.

6. Enforcement.

(a) If a claim for indemnification made to the Company pursuant to
Section 4 hereof is not paid in full by the Company within 30 calendar days after a written claim has been received by the Company, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim.

(b) In any action brought under Section 6(a) hereof, it shall be a defense to a claim for indemnification pursuant to Section 2(a) or 2(b) hereof that the Indemnitee has not met the standards of conduct which make it permissible under the BCA for the Company to indemnify the Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Company. Neither the failure of the Company (including the Board, independent legal

-10-

counsel or the Shareholders) to have made a determination prior to commencement of such action that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the BCA, nor an actual determination by the Company (including the Board, independent legal counsel or the Shareholders) that the Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct.

(c) It is the intent of the Company that the Indemnitee not be required to incur the expenses associated with the enforcement of the Indemnitee's rights under this Agreement by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder. Accordingly, if it should appear to the Indemnitee that the Company has failed to comply with any of its obligations under the Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any action, suit or proceeding designed (or having the effect of being designed) to deny, or to recover from, the Indemnitee the benefits intended to be provided to the Indemnitee hereunder, the Company irrevocably authorizes the Indemnitee from time to time to retain counsel of the Indemnitee's choice, at the expense of the Company as hereafter provided, to represent the Indemnitee in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, stockholder or other person affiliated with the Company, in any jurisdiction. Regardless of the outcome thereof, the Company shall pay and be solely responsible for any and all costs, charges and expenses, including without limitation attorneys' and others' fees and

-11-

expenses, reasonably incurred by the Indemnitee (i) as a result of the Company's failure to perform this Agreement or any provision thereof or (ii) as a result of the Company or any person contesting the validity or enforceability of this Agreement or any provision thereof as aforesaid.

7. Merger or Consolidation. In the event that the Company shall be a constituent corporation in a consolidation, merger or other reorganization, the Company, if it shall not be the surviving, resulting or other corporation therein, shall require as a condition thereto the surviving, resulting or acquiring corporation to agree to indemnify the Indemnitee to the full extent provided in this Agreement. Whether or not the Company is the resulting, surviving or acquiring corporation in any such transaction, the Indemnitee shall also stand in the same position under this Agreement with respect to the resulting, surviving or acquiring corporation as the Indemnitee would have with respect to the Company if its separate existence had continued.

8. Nonexclusivity and Severability.

(a) The right to indemnification provided by this Agreement shall not be exclusive of any other rights to which the Indemnitee may be entitled under the Articles, By-Laws, the BCA, any other statute, insurance policy, agreement, vote of shareholders or of directors or otherwise, both as to actions in the Indemnitee's official capacity and as to actions in another capacity while holding such office, and shall continue after the Indemnitee has ceased to be a director, officer, employee or agent and shall inure to the benefit of the Indemnitee's heirs, executors and administrators.

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circumstances shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.

9. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, without giving effect to the principles of conflict of laws thereof.

10. Modification: Survival. This Agreement contains the entire agreement of the parties relating to the subject matter hereof. This Agreement may be modified only by an instrument in writing signed by both parties hereto. The provisions of this Agreement shall survive the death, disability, or incapacity of the Indemnitee or the termination of the Indemnitee's service as a an officer or director of the Company and shall inure to the benefit of the Indemnitee's heirs, executors and administrators.

11. Certain Terms. For purposes of this Agreement, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on Indemnitee with respect to any employee benefit plan; and references to "serving at the request of the Company" shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, the Indemnitee with respect to an employee benefit plan, its participants or beneficiaries; references to the masculine shall include the feminine and vice versa; references to the singular shall include the plural and vice versa; and if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan the Indemnitee shall

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be deemed to have acted in a manner "not opposed to the best interests of the "Company" as referred to herein.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

MICHIGAN CONSOLIDATED GAS COMPANY

By: Susan M. Beale Vice President and Corporate Secretary

INDEMNITEE

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EXHIBIT 1

INDEMNIFICATION STATEMENT

STATE OF MICHIGAN )

)SS

COUNTY OF________________)

I, _____________________________, being first duly sworn, do depose and say as follows:

1. This Indemnification Statement is submitted pursuant to the Indemnification Agreement, dated as of ___________, ______, between Michigan Consolidated Gas Company, a Michigan corporation (the "Company"), and the undersigned.

2. I am requesting indemnification against charges, costs, expenses (including attorneys' and others' fees and expenses), judgments, fines and amounts paid in settlement, all of which (collectively, "Liabilities") have been or will be incurred by me in connection with an actual or threatened action, suit, proceeding or claim to which I am a party or am threatened to be made a party.

3. With respect to all matters related to any such action, suit, proceeding or claim, I am entitled to be indemnified as herein contemplated pursuant to the aforesaid Agreement.

4. Without limiting any other rights which I have or may have, I am requesting indemnification against Liabilities which have arisen or may arise out of

Subscribed and sworn to before me, a Notary Public in and for said County and State, this ___ day of __________, 20___.

[Seal]
My commission expires the ____ day of _______________________, 20___.

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EXHIBIT 2

UNDERTAKING

STATE OF MICHIGAN )

)SS

COUNTY OF________________)

I, _____________________, being first duly sworn do depose and say as follows:

1. This Undertaking is submitted pursuant to the Indemnification Agreement (the "Agreement"), dated as of ___________, ______, between Michigan Consolidated Gas Company, a Michigan corporation (the "Company"), and the undersigned.

2. I am requesting advancement of certain costs, charges and expenses which I have incurred or will incur in defending an actual or pending civil or criminal action, suit, proceeding or claim.

3. I affirm my good faith belief that I meet the applicable standard of conduct set forth in Section 2(a), 2(b) or 3(a) of the Agreement.

4. I hereby undertake to repay this advancement of expenses if it shall ultimately be determined that I did not meet the applicable standard of conduct or am not entitled to be indemnified by the Company under the aforesaid Agreement or otherwise.

5. My undertaking to repay is my unlimited general obligation.

6. The costs, charges and expenses for which advancement is requested are, in general, all expenses related to _______________________________.

Subscribed and sworn to before me, a Notary Public in and for said County and State, this ___ day of __________, 20___.

[Seal]

My commission expires the ____ day of _______________________, 20___.

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EXHIBIT 10.2
INDEMNIFICATION AGREEMENT

This Indemnification Agreement ("Agreement") is made as of the ___ day of _____, ____, by and between Michigan Consolidated Gas Company, a Michigan corporation (the "Company"), and ________________, a director and officer of the Company (the "Indemnitee").

RECITALS

A. The Indemnitee is presently serving as a director and officer of the Company and the Company desires the Indemnitee to continue in such capacity. The Indemnitee is willing, subject to certain conditions, including without limitation the execution and performance of this Agreement by the Company, to continue in that capacity.

Accordingly, and in order to induce the Indemnitee to continue to serve in the Indemnitee's present capacity, the Company and Indemnitee agree as follows:

-1-

1. Continued Service. The Indemnitee will continue to serve as a director and officer of the Company so long as the Indemnitee is duly elected and qualified in accordance with the By-Laws of the Company in effect from time to time or until the Indemnitee resigns in writing in accordance with applicable law.
2. Initial Indemnity.

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Company or its shareholders and, with respect to any criminal action or proceeding, that the Indemnitee had reasonable cause to believe that such conduct was unlawful.

(b) The Company shall indemnify the Indemnitee when the Indemnitee was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that the Indemnitee is or was a director, officer, employee, or agent of the Company, or is or was serving or had agreed to serve at the request of the Company as a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, against expenses, including attorneys' fees and amounts paid in settlement actually and reasonably incurred by the Indemnitee in connection with the action or suit, if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to the best interests of the Company or its shareholders. Indemnification shall not be made for a claim, issue or matter in which the Indemnitee has been found liable to the Company except to the extent the Court conducting the proceeding or another court of competent jurisdiction shall determine upon application that the Indemnitee is fairly and reasonably entitled to indemnification in view of all relevant circumstances whether or not the Indemnitee met the standard of conduct set forth in this paragraph (b) or was so adjudged liable to the Company; provided that if the Indemnitee was adjudged liable, such indemnification is limited to reasonable expenses incurred.

(c) To the extent that the Indemnitee has been successful, on the merits or otherwise, in defense of any action, suit or proceeding referred to in Section 2(a) or 2(b) hereof, or in defense of any claim, issue or matter in the action, suit or proceeding, the Indemnitee shall

-3-

-4-

participate. Independent legal counsel shall not be any person or firm who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or the Indemnitee in an action to determine the Indemnitee's rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of such independent legal counsel and to indemnify fully such counsel against costs, charges and expenses (including attorneys' and others' fees and expenses) actually and reasonably incurred by such counsel in connection with this Agreement or the opinion of such counsel pursuant hereto.

(e) If the Indemnitee is entitled to indemnification under
Section 2(a) or 2(b) for a portion of expenses, including reasonable attorneys' fees, judgments, penalties, fines and amounts paid in settlement, but not for the total amount, the Company shall indemnify the Indemnitee for the portion of the expenses, judgments, penalties, fines or amounts paid in settlement for which the Indemnitee is entitled to be indemnified.

-5-

Board or the Shareholders, as the case may be. In the event that the Company shall adopt any amendment to the Articles or By-Laws the effect of which is to so deny, diminish or encumber the Indemnitee's rights to indemnity, such amendment shall apply only to acts or failures to act occurring entirely after the Effective Date thereof unless the Indemnitee shall have voted in favor of such adoption as a director or holder of record of the Company's voting stock, as the case may be.

3. Additional Indemnification.

(a) Pursuant to Section 565 of the BCA, without limiting any right which the Indemnitee may have pursuant to Section 2 hereof, the Articles, the By-Laws, the BCA, any policy of insurance or otherwise, but subject to the limitations on the maximum permissible indemnity which may exist under applicable law at the time of any request for indemnity hereunder determined as contemplated by Section 3(a) hereof, the Company shall indemnify the Indemnitee against any amount which the Indemnitee is or becomes legally obligated to pay relating to or arising out of any claim made against the Indemnitee because of any act, failure to act or neglect or breach of duty, including any actual or alleged error, misstatement or misleading statement, which the Indemnitee commits, suffers, permits or acquiesces in while acting in such capacity as a director or officer of the Company, or, at the request of the Company, as a director, officer, employee or agent of another corporation, partnership, joint

-6-

venture, trust or other enterprise. The payments which the Company is obligated to make pursuant to this Section 3 shall include without limitation damages, judgments, settlements and charges, costs, expenses, expenses of investigation and expenses of defense of legal actions, suits, proceedings or claims and appeals therefrom, and expenses of appeal, attachment or similar bonds; provided, however, that the Company shall not be obligated under this Section 3(a) to make any payment in connection with any claim against the Indemnitee:

(i) to the extent of any fine or similar governmental imposition which the Company is prohibited by applicable law from paying which results from a final, nonappealable order;

-7-

(b) Expenses (including without limitation attorneys' and others' fees and expenses) incurred by Indemnitee in defending any actual or threatened civil or criminal action, suit, proceeding or claim shall be paid by the Company in advance of the final disposition thereof as authorized in accordance with Section 4(b) hereof.

4. Certain Procedures Relating to Indemnification and Advancement of Expenses.

(a) Except as otherwise permitted or required by the BCA, for purposes of pursuing the Indemnitee's rights to indemnification under
Section 2(a), 2(b) or 3(a) hereof, as the case may be, the Indemnitee may, but shall not be required to, (i) submit to the Board a sworn statement of request for indemnification substantially in the form of Exhibit 1 attached hereto and made a part hereof (the "Indemnification Statement") averring that the Indemnitee is entitled to indemnification hereunder; and (ii) present to the Company reasonable evidence of all expenses for which payment is requested. Submission of an Indemnification Statement to the Board shall create a presumption that the Indemnitee is entitled to indemnification under Section
2(a), 2(b) or 3(a) hereof, as the case may be, and the Board shall be deemed to have determined that the Indemnitee is entitled to such indemnification unless within 30 calendar days after submission of the Indemnification Statement the Board shall determine by vote of a majority of the directors at a meeting at which a quorum is present, based upon clear and convincing evidence (sufficient to rebut the foregoing presumption), and the Indemnitee shall have received notice within such period in writing of such determination, that the Indemnitee is not so entitled to indemnification. No such determination shall be effective unless written notice thereof, disclosing with particularity the evidence in support of the Board's determination, shall have been given to the Indemnitee within 30 calendar days after submission of the

-8-

Indemnification Statement. The foregoing notice shall be sworn to by all persons who participated in the determination and voted to deny indemnification. The provisions of this Section 4(a) are intended to be procedural only and shall not affect the right of the Indemnitee to indemnification under this Agreement, and any determination by the Board that the Indemnitee is not entitled to indemnification and any failure to make the payments requested in the Indemnification Statement shall be subject to judicial review as provided in
Section 6 hereof.

(b) For purposes of determining whether to authorize advancement of expenses pursuant to Section 2(e) hereof, the Indemnitee shall submit to the Board a sworn statement of request for advancement of expenses substantially in the form of Exhibit 2 attached hereto and made a part hereof (the "Undertaking"), averring that (i) the Indemnitee, in good faith, believes that the applicable standards of conduct set forth in Section 2(a), 2(b) or
3(a), as the case may be, have been met, (ii) the Indemnitee has reasonably incurred or will reasonably incur actual expenses in defending an actual civil or criminal action, suit, proceeding or claim and (iii) the Indemnitee undertakes to repay such amount if it shall ultimately be determined that the Indemnitee did not meet the applicable standard of conduct or is not entitled to be indemnified by the Company under this Agreement or otherwise. For purposes of requesting advancement of expenses pursuant to Section 3(b) hereof, the Indemnitee may, but shall not be required to, submit an Undertaking or such other form of request as the Indemnitee determines to be appropriate (an "Expense Request"). Upon receipt of an Undertaking or Expense Request, as the case may be, such payments shall immediately be made by the Company provided that a determination is made that facts then known to those making the determination would not preclude indemnification under the BCA. Such determination shall be made within 10

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calendar days of the date of receipt by the Company of the Expense Request and shall be made in the manner specified in Section 2(d). No security shall be required in connection with any Undertaking or Expense Request and any Undertaking or Expense Request shall be accepted without reference to the Indemnitee's ability to make repayment.

5. Subrogation; Duplication of Payments.

6. Enforcement.

(a) If a claim for indemnification made to the Company pursuant to Section 4 hereof is not paid in full by the Company within 30 calendar days after a written claim has been received by the Company, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim.

-10-

indemnify the Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Company. Neither the failure of the Company (including the Board, independent legal counsel or the Shareholders) to have made a determination prior to commencement of such action that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct set forth in the BCA, nor an actual determination by the Company (including the Board, independent legal counsel or the Shareholders) that the Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct.

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Company, in any jurisdiction. Regardless of the outcome thereof, the Company shall pay and be solely responsible for any and all costs, charges and expenses, including without limitation attorneys' and others' fees and expenses, reasonably incurred by the Indemnitee (i) as a result of the Company's failure to perform this Agreement or any provision thereof or (ii) as a result of the Company or any person contesting the validity or enforceability of this Agreement or any provision thereof as aforesaid.

8. Nonexclusivity and Severability.

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be a director, officer, employee or agent and shall inure to the benefit of the Indemnitee's heirs, executors and administrators.

(b) If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected, and the provision so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.

9. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, without giving effect to the principles of conflict of laws thereof.

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10. Modification; Survival. This Agreement contains the entire agreement of the parties relating to the subject matter hereof. This Agreement may be modified only by an instrument in writing signed by both parties hereto. The provisions of this Agreement shall survive the death, disability, or incapacity of the Indemnitee or the termination of the Indemnitee's service as a director or officer of the Company and shall inure to the benefit of the Indemnitee's heirs, executors and administrators.

11. Certain Terms. For purposes of this Agreement, references to

"other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on Indemnitee with respect to any employee benefit plan; and references to "serving at the request of the Company" shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, the Indemnitee with respect to an employee benefit plan, its participants or beneficiaries; references to the masculine shall include the feminine and vice versa; references to the singular shall include the plural and vice versa; and if the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan the Indemnitee shall be deemed to have acted in a manner "not opposed to the best interests of the Company" as referred to herein.

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first above written.

MICHIGAN CONSOLIDATED GAS COMPANY

By:______________________________
Susan M. Beale
Vice President and
Corporate Secretary

INDEMNITEE:

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EXHIBIT 1

INDEMNIFICATION STATEMENT

STATE OF MICHIGAN                    )
                                     )   SS
COUNTY OF__________________________  )

I, , being first duly sworn, do depose and say as follows:

1. This Indemnification Statement is submitted pursuant to the Indemnification Agreement, dated as of , ____, between Michigan Consolidated Gas Company, a Michigan corporation (the Company"), and the undersigned.

3. With respect to all matters related to any such action, suit, proceeding or claim, I am entitled to be indemnified as herein contemplated pursuant to the aforesaid Agreement.

4. Without limiting any other rights which I have or may have, I am requesting indemnification against Liabilities which have arisen or may arise out of

______________________________________________________.

Subscribed and sworn to before me, a Notary Public in and for said County and State, this___day of , 20__.

[Seal]

My commission expires the______day of_______, 20__.

-16-

EXHIBIT 2

UNDERTAKING

STATE OF MICHIGAN                    )
                                     )   SS
COUNTY OF__________________________  )

I,_____________ , being first duly sworn do depose and say as follows:

1. This Undertaking is submitted pursuant to the Indemnification Agreement (the "Agreement"), dated as of____ , ____, between Michigan Consolidated Gas Company, a Michigan corporation (the "Company"), and the undersigned.

2. I am requesting advancement of certain costs, charges and expenses which I have incurred or will incur in defending an actual or pending civil or criminal action, suit, proceeding or claim.

3. I affirm my good faith belief that I meet the applicable standard of conduct set forth in Section 2(a), 2(b) or 3(a) of the Agreement.

5. My undertaking to repay is my unlimited general obligation.

6. The costs, charges and expenses for which advancement is requested are, in general, all expenses related to__________________________.

Subscribed and sworn to before me, a Notary Public in and for said County and State, this________ day of____ , 20__.

[Seal] ___________________________

My commission expires the_______day of________, 20__.

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Exhibit 12-1

MICHIGAN CONSOLIDATED GAS COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)

                                                                             Twelve Months Ended
                                             --------------------------------------------------------------------------------------
                                              March 31     December 31    December 31     December 31   December 31    December 31
                                                2001           2000           1999           1998           1997           1996
                                              --------       --------       --------       --------       --------       --------
EARNINGS AS DEFINED (1)
Pre-tax income ........................       $210,330       $163,384       $162,389       $114,619       $125,630       $122,239
Fixed charges .........................         63,093         61,884         59,340         61,304         57,905         53,831
                                              --------       --------       --------       --------       --------       --------
  Earnings as defined .................       $273,423       $225,268       $221,729       $175,923       $183,535       $176,070
                                              ========       ========       ========       ========       ========       ========

FIXED CHARGES AS DEFINED (1)
Interest expensed .....................       $ 59,991       $ 58,700       $ 55,891       $ 56,997       $ 54,190       $ 48,715
Interest capitalized ..................            737            811          1,190          2,207          1,498          2,460
Amortization of debt discounts, premium
  and expense .........................          1,121          1,121          1,144            955          1,032          1,081
Interest implicit in rentals (2) ......          1,244          1,252          1,115          1,145          1,185          1,575
                                              --------       --------       --------       --------       --------       --------
  Fixed charges as defined ............       $ 63,093       $ 61,884       $ 59,340       $ 61,304       $ 57,905       $ 53,831
                                              ========       ========       ========       ========       ========       ========

Ratio of Earnings to Fixed Charges ....           4.33           3.64           3.74           2.87           3.17           3.27
                                              ========       ========       ========       ========       ========       ========

Notes:

(1) - Earnings and fixed charges are defined and computed in accordance with Item 503 of Regulation S-K.

(2) - This amount is estimated to be a reasonable approximation of the interest portion of rentals.

EXHIBIT 15-1

June 18, 2001

Michigan Consolidated Gas Company
Detroit, Michigan

We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of Michigan Consolidated Gas Company for the periods ended March 31, 2001 and 2000, as indicated in our report dated May 11, 2001; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, is incorporated by reference in this Registration Statement.

We are also aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

DELOITTE & TOUCHE LLP

Detroit, Michigan

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of Michigan Consolidated Gas Company on Form S-3, which includes post-effective amendment no. 1 to Registration Statement No. 333-56333, of our report dated March 13, 2001, appearing in the Annual Report on Form 10-K of Michigan Consolidated Gas Company for the year ended December 31, 2000, and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement.

DELOITTE & TOUCHE LLP

Detroit, Michigan

June 18, 2001

EXHIBIT 25.1

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

Check if an application to determine eligibility of a Trustee pursuant to Section 305(b)(2) ____

CITIBANK, N.A.
(Exact name of trustee as specified in its charter)

13-5266470
(I.R.S. employer
identification no.)

399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)

Michigan Consolidated Gas Company
(Exact name of obligor as specified in its charter)

Michigan                                                   38-0478040
(State or other jurisdiction of                            (I.R.S. employer
incorporation or organization)                             identification no.)


500 Griswold Street
Detroit, Michigan                                          48226
(Address of principal executive offices)                   (Zip Code)

                                   ----------

Senior Debt Securities
(Title of the indenture securities)

Item 1. General Information.

Furnish the following information as to the trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

Name                                            Address
----                                            -------
Comptroller of the Currency                     Washington, D.C.

Federal Reserve Bank of New York                New York, NY
33 Liberty Street
New York, NY

Federal Deposit Insurance Corporation           Washington, D.C.

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

Item 2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

Item 16. List of Exhibits.

List below all exhibits filed as a part of this Statement of Eligibility.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as exhibits hereto.

Exhibit 1 - Copy of Articles of Association of the Trustee, as now in effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983)

Exhibit 2 - Copy of certificate of authority of the Trustee to commence business. (Exhibit 2 to T-1 to Registration Statement No. 2-29577).

Exhibit 3 - Copy of authorization of the Trustee to exercise corporate trust powers. (Exhibit 3 to T-1 to Registration Statement No. 2-55519)

Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1 to Registration Statement No. 33-34988)

Exhibit 5 - Not applicable.

Exhibit 6 - The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration Statement No. 33-19227.)

Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A. (as of March 31, 2001-attached)

Exhibit 8 - Not applicable.

Exhibit 9 - Not applicable.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, Citibank, N.A., a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York and State of New York, on the 11th day of June, 2001.

CITIBANK, N.A.

By  /s/ Wafaa Orfy
   --------------------------
    Wafaa Orfy
    Assistant Vice President

Charter No. 1461 Comptroller of the Currency Northeastern District
REPORT OF CONDITION

CONSOLIDATED
DOMESTIC AND FOREIGN
SUBSIDIARIES OF

CITIBANK, N.A.

OF NEW YORK IN THE STATE OF NEW YORK, AT THE CLOSE OF BUSINESS ON MARCH 31, 2001, PUBLISHED IN RESPONSE TO CALL MADE BY COMPTROLLER OF THE CURRENCY, UNDER TITLE 12, UNITED STATES CODE, SECTION 161. CHARTER NUMBER 1461 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT.

                                     ASSETS

                                                                 THOUSANDS
                                                                OF DOLLARS
                                                               ------------
Cash & balances due:
Noninterest-bearing balances ..........................           8,899,000
Interest-bearing balances .............................          21,247,000
Securities:
Held-to-Maturity securities ...........................                   0
Available-for-sale securities .........................          39,868,000
Federal funds sold ....................................          11,252,000
Loans and leases held for sale ........................           4,215,000
Loans and Leases, net of unearned
   income .............................................         242,480,000
LESS: Allowance for loan
   and lease losses ...................................           4,544,000
Loans and leases, net of
   earned income and allowance ........................         237,936,000
Trading assets ........................................          39,123,000
Premises and fixed assets .............................           3,974,000
Other real estate owned ...............................             286,000
Investments in unconsolidated
   subsidiaries .......................................             867,000
Customers' liability
   on acceptances outstanding .........................           1,528,000
Intangible assets:
Goodwill ..............................................           2,273,000
Other intangible assets ...............................           3,595,000
Other assets ..........................................          20,806,000
                                                               ------------
TOTAL ASSETS ..........................................         395,869,000
                                                               ============

                                   LIABILITIES

Deposits:
In domestic offices ...................................          71,054,000
   Noninterest-bearing ................................          12,620,000
   Interest-bearing ...................................          58,434,000
In foreign offices ....................................         212,602,000
   Noninterest-bearing ................................          14,351,000
   Interest-bearing ...................................         198,251,000
Federal funds purchased and
   securities sold ....................................           6,932,000
Trading liabilities ...................................          29,238,000
Other borrowed money ..................................          23,697,000
Bank's liability on acceptances .......................           1,528,000
Subordinated notes and
   debentures .........................................           8,675,000
Other liabilities .....................................          14,481,000
                                                               ------------
TOTAL LIABILITIES .....................................         368,207,000
                                                               ============

                                 EQUITY CAPITAL

Perpetual preferred stock .............................                   0
Common stock ..........................................             751,000
Surplus ...............................................          11,554,000
Retained earnings .....................................          15,961,000
Accumulated other
   comprehensive income ...............................            -813,000
Other equity capital components .......................                   0
                                                               ------------
TOTAL EQUITY CAPITAL ..................................          27,453,000
                                                               ------------

TOTAL LIABILITIES, MINORITY
INTEREST AND EQUITY
CAPITAL ...............................................         395,869,000
                                                               ============

I, Roger W. Trupin, Controller of the above named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

ROGER W. TRUPIN
CONTROLLER

We, the undersigned directors, attest to the correctness of this Report of Condition. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.

VICTOR J. MENEZES
WILLIAM R. RHODES
ALAN S. MACDONALD

Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATED
DOMESTIC AND FOREIGN
SUBSIDIARIES OF

CITIBANK, N.A.

ASSETS
THOUSANDS
OF DOLLARS

Cash & balances due:
Noninterest-bearing balances ..........................           8,899,000
Interest-bearing balances .............................          21,247,000
Securities:
Held-to-Maturity securities ...........................                   0
Available-for-sale securities .........................          39,868,000
Federal funds sold ....................................          11,252,000
Loans and leases held for sale ........................           4,215,000
Loans and Leases, net of unearned
income ................................................         242,480,000
LESS: Allowance for loan
and lease losses ......................................           4,544,000
Loans and leases, net of
earned income and allowance ...........................         237,936,000
Trading assets ........................................          39,123,000
Premises and fixed assets .............................           3,974,000
Other real estate owned ...............................             286,000
Investments in unconsolidated
subsidiaries ..........................................             867,000
Customers' liability
on acceptances outstanding ............................           1,528,000
Intangible assets:
Goodwill ..............................................           2,273,000
Other intangible assets ...............................           3,595,000
Other assets ..........................................          20,806,000
                                                               ------------
TOTAL ASSETS ..........................................         395,869,000
                                                               ============

LIABILITIES
Deposits:
In domestic offices ...................................          71,054,000
Noninterest-bearing ...................................          12,620,000
Interest-bearing ......................................          58,434,000
In foreign offices ....................................         212,602,000
Noninterest-bearing ...................................          14,351,000
Interest-bearing ......................................         198,251,000
Federal funds purchased and
securities sold .......................................           6,932,000
Trading liabilities ...................................          29,238,000
Other borrowed money ..................................          23,697,000
Bank's liability on acceptances .......................           1,528,000
Subordinated notes and
debentures ............................................           8,675,000
Other liabilities .....................................          14,481,000
                                                               ------------
TOTAL LIABILITIES .....................................         368,207,000
                                                               ============

EQUITY CAPITAL
Perpetual preferred stock .............................                   0
Common stock ..........................................             751,000
Surplus ...............................................          11,554,000
Retained earnings .....................................          15,961,000
Accumulated other
comprehensive income ..................................            -813,000
Other equity capital components .......................                   0
                                                               ------------
TOTAL EQUITY CAPITAL ..................................          27,453,000
                                                               ------------
TOTAL LIABILITIES, MINORITY
INTEREST AND EQUITY
CAPITAL ...............................................         395,869,000
                                                               ============

I, Roger W. Trupin, Controller of the above named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

ROGER W. TRUPIN
CONTROLLER

VICTOR J. MENEZES
WILLIAM R. RHODES
ALAN S. MACDONALD

EXHIBIT 25.2

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

Check if an application to determine eligibility of a Trustee pursuant to Section 305 (b)(2)

CITIBANK, N.A.
(Exact name of trustee as specified in its charter)

13-5266470
(I.R.S. employer
identification no.)

399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)

Michigan Consolidated Gas Company
(Exact name of obligor as specified in its charter)

Michigan                                                     38-0478040
(State or other jurisdiction of                              (I.R.S. employer
incorporation or organization)                               identification no.)


500 Griswold Street
Detroit, Michigan                                            48226
(Address of principal executive offices)                     (Zip Code)

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

FIRST MORTGAGE BONDS
(Title of the indenture securities)

Item 1. General Information.

Furnish the following information as to the trustee:

(a) Name and address of each examining or supervising authority to which it is subject.

Name                                                 Address
----                                                 -------
Comptroller of the Currency                          Washington, D.C.

Federal Reserve Bank of New York                     New York, NY
33 Liberty Street
New York, NY

Federal Deposit Insurance Corporation                Washington, D.C.

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

Item 2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

Item 16. List of Exhibits.

List below all exhibits filed as a part of this Statement of Eligibility.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as exhibits hereto.

Exhibit 1 - Copy of Articles of Association of the Trustee, as now in effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983)

Exhibit 2 - Copy of certificate of authority of the Trustee to commence business. (Exhibit 2 to T-1 to Registration Statement No. 2-29577).

Exhibit 3 - Copy of authorization of the Trustee to exercise corporate trust powers. (Exhibit 3 to T-1 to Registration Statement No. 2-55519)

Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1 to Registration Statement No. 33-34988)

Exhibit 5 - Not applicable.

Exhibit 6 - The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration Statement No. 33-19227.)

Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A. (as of March 31, 2001-attached)

Exhibit 8 - Not applicable.

Exhibit 9 - Not applicable.

SIGNATURE

CITIBANK, N.A.

By  /s/Wafaa Orfy
    -----------------------------------
    Wafaa Orfy
    Assistant Vice President

Charter No. 1461 Comptroller of the Currency Northeastern District
REPORT OF CONDITION

CONSOLIDATED
DOMESTIC AND FOREIGN
SUBSIDIARIES OF

CITIBANK, N.A.

                                     ASSETS

                                                                 THOUSANDS
                                                                OF DOLLARS
                                                               ------------
Cash & balances due:
Noninterest-bearing balances ..........................           8,899,000
Interest-bearing balances .............................          21,247,000
Securities:
Held-to-Maturity securities ...........................                   0
Available-for-sale securities .........................          39,868,000
Federal funds sold ....................................          11,252,000
Loans and leases held for sale ........................           4,215,000
Loans and Leases, net of unearned
   income .............................................         242,480,000
LESS: Allowance for loan
   and lease losses ...................................           4,544,000
Loans and leases, net of
   earned income and allowance ........................         237,936,000
Trading assets ........................................          39,123,000
Premises and fixed assets .............................           3,974,000
Other real estate owned ...............................             286,000
Investments in unconsolidated
   subsidiaries .......................................             867,000
Customers' liability
   on acceptances outstanding .........................           1,528,000
Intangible assets:
Goodwill ..............................................           2,273,000
Other intangible assets ...............................           3,595,000
Other assets ..........................................          20,806,000
                                                               ------------
TOTAL ASSETS ..........................................         395,869,000
                                                               ============

                                   LIABILITIES

Deposits:
In domestic offices ...................................          71,054,000
   Noninterest-bearing ................................          12,620,000
   Interest-bearing ...................................          58,434,000
In foreign offices ....................................         212,602,000
   Noninterest-bearing ................................          14,351,000
   Interest-bearing ...................................         198,251,000
Federal funds purchased and
   securities sold ....................................           6,932,000
Trading liabilities ...................................          29,238,000
Other borrowed money ..................................          23,697,000
Bank's liability on acceptances .......................           1,528,000
Subordinated notes and
   debentures .........................................           8,675,000
Other liabilities .....................................          14,481,000
                                                               ------------
TOTAL LIABILITIES .....................................         368,207,000
                                                               ============

                                 EQUITY CAPITAL

Perpetual preferred stock .............................                   0
Common stock ..........................................             751,000
Surplus ...............................................          11,554,000
Retained earnings .....................................          15,961,000
Accumulated other
   comprehensive income ...............................            -813,000
Other equity capital components .......................                   0
                                                               ------------
TOTAL EQUITY CAPITAL ..................................          27,453,000
                                                               ------------

TOTAL LIABILITIES, MINORITY
INTEREST AND EQUITY
CAPITAL ...............................................         395,869,000
                                                               ============

I, Roger W. Trupin, Controller of the above named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

ROGER W. TRUPIN
CONTROLLER

VICTOR J. MENEZES
WILLIAM R. RHODES
ALAN S. MACDONALD

Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATED
DOMESTIC AND FOREIGN
SUBSIDIARIES OF

CITIBANK, N.A.

ASSETS
THOUSANDS
OF DOLLARS

Cash & balances due:
Noninterest-bearing balances ..........................           8,899,000
Interest-bearing balances .............................          21,247,000
Securities:
Held-to-Maturity securities ...........................                   0
Available-for-sale securities .........................          39,868,000
Federal funds sold ....................................          11,252,000
Loans and leases held for sale ........................           4,215,000
Loans and Leases, net of unearned
income ................................................         242,480,000
LESS: Allowance for loan
and lease losses ......................................           4,544,000
Loans and leases, net of
earned income and allowance ...........................         237,936,000
Trading assets ........................................          39,123,000
Premises and fixed assets .............................           3,974,000
Other real estate owned ...............................             286,000
Investments in unconsolidated
subsidiaries ..........................................             867,000
Customers' liability
on acceptances outstanding ............................           1,528,000
Intangible assets:
Goodwill ..............................................           2,273,000
Other intangible assets ...............................           3,595,000
Other assets ..........................................          20,806,000
                                                               ------------
TOTAL ASSETS ..........................................         395,869,000
                                                               ============

LIABILITIES
Deposits:
In domestic offices ...................................          71,054,000
Noninterest-bearing ...................................          12,620,000
Interest-bearing ......................................          58,434,000
In foreign offices ....................................         212,602,000
Noninterest-bearing ...................................          14,351,000
Interest-bearing ......................................         198,251,000
Federal funds purchased and
securities sold .......................................           6,932,000
Trading liabilities ...................................          29,238,000
Other borrowed money ..................................          23,697,000
Bank's liability on acceptances .......................           1,528,000
Subordinated notes and
debentures ............................................           8,675,000
Other liabilities .....................................          14,481,000
                                                               ------------
TOTAL LIABILITIES .....................................         368,207,000
                                                               ============

EQUITY CAPITAL
Perpetual preferred stock .............................                   0
Common stock ..........................................             751,000
Surplus ...............................................          11,554,000
Retained earnings .....................................          15,961,000
Accumulated other
comprehensive income ..................................            -813,000
Other equity capital components .......................                   0
                                                               ------------
TOTAL EQUITY CAPITAL ..................................          27,453,000
                                                               ------------
TOTAL LIABILITIES, MINORITY
INTEREST AND EQUITY
CAPITAL ...............................................         395,869,000
                                                               ============

I, Roger W. Trupin, Controller of the above named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

ROGER W. TRUPIN
CONTROLLER

VICTOR J. MENEZES
WILLIAM R. RHODES
ALAN S. MACDONALD

EXHIBIT 25.3

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-2

STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF AN
INDIVIDUAL DESIGNATED TO ACT AS TRUSTEE

Check if an application to determine eligibility of a trustee pursuant to
Section 305(b) (2)

ROBERT T. KIRCHNER 000-00-0000
(Name of Trustee) (Social Security Number)

111 Wall Street, New York, New York 10043
(Business Address: Street, City and Zip Code)

MICHIGAN CONSOLIDATED GAS COMPANY
(Exact name of obligor as specified in its charter)

         MICHIGAN                                            38-0478040
(State or other jurisdiction of                          (I.R.S. employee
incorporation or organization)                           identification no.)

500 Griswold Street
Detroit, MI                                                     48226
(Address of principal executive offices)                      (Zip Code)

FIRST MORTGAGE BONDS
(Title of the indenture securities)

1. Affiliations with obligor and underwriters. If the obligor or any underwriter for the obligor is an affiliate of the trustee, describe each such affiliation.

None.

2. Trusteeships under other indentures. If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, file a copy of each such indenture as an exhibit and furnish the following information.

(a) Title of the securities outstanding under each other indenture.

None.-The Trustee is one of the Trustees under the obligor's Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, as supplemented. The securities, proposed to be offered, will be issued under said Mortgage Indenture, as supplemented by a Twenty-Ninth Supplemental Indenture, dated as of July 15, 1989, which has been qualified under the Trust Indenture Act of 1939.

(b) A brief statement of the facts relied upon by the trustee as a basis for the claim that no conflicting interest within the meaning of section 310(b)(1) of the Act arises as a result of the trusteeship under such other indenture, including a statement whether the indenture securities will rank equally with the securities issued under such other indentures.

Inapplicable.

3. Certain relationships between trustee and the obligor or an underwriter.

If the trustee is a director, officer, partner, employee, appointee or representative of the obligor or of any underwriter for the obligor, state the nature of each such connection.

None.

4. Securities of the obligor owned or held by the trustee.

Furnish the following information as to securities of the obligor owned beneficially by the trustee or held by the trustee as collateral for obligations in default:

                                                  As of June 11, 2001
     Col. A                         Col. B                       Col. C                       Col. D
                               Whether the securities are   Amount owned beneficially    Percent of Class
                               voting or nonvoting          or held as collateral        represented by amount
                               securities                   security for obligations     given in Col. C
Title of Class                                              in default

None.

5. Securities of underwriters owned or held by the trustee.

If the trustee owns beneficially or holds as collateral security for obligations in default any securities of an underwriter for the obligor, furnish the following information as to each class of securities of such underwriter any of which are so owned or held by the trustee.

                                                  As of June 11, 2001
     Col. A                         Col. B                       Col. C                       Col. D
                                                            Amount owned beneficially    Percent of voting
                                                            or held as collateral        securities represented by
Name of Issuer and                                          security for obligations     amount given in
Title of Class                 Amount Outstanding           in default                   Col. C

None.

6. Holdings by the trustee of voting securities of certain affiliates or principal holders of voting securities of the obligor.

If the trustee owns beneficially or holds as collateral security for obligations in default voting securities of a person who, to the knowledge of the trustee (1) owns 10% or more of the voting securities of the obligor or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the following information as to the voting securities of such person.

                                                  As of June 11, 2001
     Col. A                         Col. B                       Col. C                       Col. D
                                                            Amount owned beneficially    Percent of voting
                                                            or held as collateral        securities represented by
Name of Issuer and                                          security for obligations     amount given in
Title of Class                 Amount Outstanding           in default                   Col. C

None.

7. Holdings by the trustee of any securities of a person owning 50 per cent or more of the voting securities of the obligor.

If the trustee owns beneficially or holds as collateral security for obligations in default any securities of a person who, to the knowledge of the trustee, owns 50% or more of the voting securities of the obligor, furnish the following information as to each class of securities of such person any of whom are so owned or held by the trustee.

                                                  As of June 11, 2001
     Col. A                         Col. B                       Col. C                       Col. D
                                                            Amount owned beneficially    Percent of voting
                                                            or held as collateral        securities represented by
Name of Issuer and                                          security for obligations     amount given in
Title of Class                 Amount Outstanding           in default                   Col. C

None.

11. List of exhibits. List below all exhibits filed as a part of this statement of eligibility and qualification.

None.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, I, Robert T. Kirchner, have signed this statement of eligibility and qualification in the city of New York and State of New York, on the 11th day of June, 2001.

By:      /s/Robert T. Kirchner, Trustee
         ------------------------------
         (Robert T. Kirchner, Trustee)

Charter No. 1461 Comptroller of the Currency Northeastern District
REPORT OF CONDITION

CONSOLIDATED
DOMESTIC AND FOREIGN
SUBSIDIARIES OF

CITIBANK, N.A.

                                     ASSETS

                                                                 THOUSANDS
                                                                OF DOLLARS
                                                               ------------
Cash & balances due:
Noninterest-bearing balances ..........................           8,899,000
Interest-bearing balances .............................          21,247,000
Securities:
Held-to-Maturity securities ...........................                   0
Available-for-sale securities .........................          39,868,000
Federal funds sold ....................................          11,252,000
Loans and leases held for sale ........................           4,215,000
Loans and Leases, net of unearned
   income .............................................         242,480,000
LESS: Allowance for loan
   and lease losses ...................................           4,544,000
Loans and leases, net of
   earned income and allowance ........................         237,936,000
Trading assets ........................................          39,123,000
Premises and fixed assets .............................           3,974,000
Other real estate owned ...............................             286,000
Investments in unconsolidated
   subsidiaries .......................................             867,000
Customers' liability
   on acceptances outstanding .........................           1,528,000
Intangible assets:
Goodwill ..............................................           2,273,000
Other intangible assets ...............................           3,595,000
Other assets ..........................................          20,806,000
                                                               ------------
TOTAL ASSETS ..........................................         395,869,000
                                                               ============

                                   LIABILITIES

Deposits:
In domestic offices ...................................          71,054,000
   Noninterest-bearing ................................          12,620,000
   Interest-bearing ...................................          58,434,000
In foreign offices ....................................         212,602,000
   Noninterest-bearing ................................          14,351,000
   Interest-bearing ...................................         198,251,000
Federal funds purchased and
   securities sold ....................................           6,932,000
Trading liabilities ...................................          29,238,000
Other borrowed money ..................................          23,697,000
Bank's liability on acceptances .......................           1,528,000
Subordinated notes and
   debentures .........................................           8,675,000
Other liabilities .....................................          14,481,000
                                                               ------------
TOTAL LIABILITIES .....................................         368,207,000
                                                               ============

                                 EQUITY CAPITAL

Perpetual preferred stock .............................                   0
Common stock ..........................................             751,000
Surplus ...............................................          11,554,000
Retained earnings .....................................          15,961,000
Accumulated other
   comprehensive income ...............................            -813,000
Other equity capital components .......................                   0
                                                               ------------
TOTAL EQUITY CAPITAL ..................................          27,453,000
                                                               ------------

TOTAL LIABILITIES, MINORITY
INTEREST AND EQUITY
CAPITAL ...............................................         395,869,000
                                                               ============

I, Roger W. Trupin, Controller of the above named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

ROGER W. TRUPIN
CONTROLLER

VICTOR J. MENEZES
WILLIAM R. RHODES
ALAN S. MACDONALD

Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATED
DOMESTIC AND FOREIGN
SUBSIDIARIES OF

CITIBANK, N.A.

ASSETS
THOUSANDS
OF DOLLARS

Cash & balances due:
Noninterest-bearing balances ..........................           8,899,000
Interest-bearing balances .............................          21,247,000
Securities:
Held-to-Maturity securities ...........................                   0
Available-for-sale securities .........................          39,868,000
Federal funds sold ....................................          11,252,000
Loans and leases held for sale ........................           4,215,000
Loans and Leases, net of unearned
income ................................................         242,480,000
LESS: Allowance for loan
and lease losses ......................................           4,544,000
Loans and leases, net of
earned income and allowance ...........................         237,936,000
Trading assets ........................................          39,123,000
Premises and fixed assets .............................           3,974,000
Other real estate owned ...............................             286,000
Investments in unconsolidated
subsidiaries ..........................................             867,000
Customers' liability
on acceptances outstanding ............................           1,528,000
Intangible assets:
Goodwill ..............................................           2,273,000
Other intangible assets ...............................           3,595,000
Other assets ..........................................          20,806,000
                                                               ------------
TOTAL ASSETS ..........................................         395,869,000
                                                               ============

LIABILITIES
Deposits:
In domestic offices ...................................          71,054,000
Noninterest-bearing ...................................          12,620,000
Interest-bearing ......................................          58,434,000
In foreign offices ....................................         212,602,000
Noninterest-bearing ...................................          14,351,000
Interest-bearing ......................................         198,251,000
Federal funds purchased and
securities sold .......................................           6,932,000
Trading liabilities ...................................          29,238,000
Other borrowed money ..................................          23,697,000
Bank's liability on acceptances .......................           1,528,000
Subordinated notes and
debentures ............................................           8,675,000
Other liabilities .....................................          14,481,000
                                                               ------------
TOTAL LIABILITIES .....................................         368,207,000
                                                               ============

EQUITY CAPITAL
Perpetual preferred stock .............................                   0
Common stock ..........................................             751,000
Surplus ...............................................          11,554,000
Retained earnings .....................................          15,961,000
Accumulated other
comprehensive income ..................................            -813,000
Other equity capital components .......................                   0
                                                               ------------
TOTAL EQUITY CAPITAL ..................................          27,453,000
                                                               ------------
TOTAL LIABILITIES, MINORITY
INTEREST AND EQUITY
CAPITAL ...............................................         395,869,000
                                                               ============

I, Roger W. Trupin, Controller of the above named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

ROGER W. TRUPIN
CONTROLLER

VICTOR J. MENEZES
WILLIAM R. RHODES
ALAN S. MACDONALD


	•	the effects of weather and other natural phenomena;

	•	increased competition from other energy suppliers as well as alternative forms of energy;

	•	the capital intensive nature of MichCon’s business;

	•	the economic climate and growth in the geographic areas in which MichCon does business;

	•	the uncertainty of gas reserve estimates;

	•	the timing and extent of changes in commodity prices for natural gas, electricity and crude oil;

	•	conditions of capital markets and equity markets; and

	•	the effects of changes in governmental policies and regulatory actions, including income taxes, environmental compliance and authorized rates, including limitations on the price of gas that may be recovered from customers.


	•	the acquisition of property;

	•	the construction, completion, extension or improvement of facilities;

	•	working capital requirements;

	•	the improvement or maintenance of service;

	•	the discharge or lawful retirement of short or long-term debt and borrowings made or expected to be made; and

	•	for other corporate purposes.


(1)	MichCon is a guarantor of certain other debt. Fixed charges related to such debt, deemed to be immaterial, have been excluded in computing the above ratios.


(2)	For the purpose of computing these ratios, earnings consists of net income plus income taxes and fixed charges. Fixed charges consist of total interest, amortization of debt discount, premium and expense and the estimated portion of interest implicit in rentals.


	•	the title of the senior debt securities;

	•	any limit on the aggregate principal amount of the senior debt securities;

	•	whether the senior debt securities will be issued in the form of one or more global securities and whether such global securities will be issued in a temporary global form or permanent global form;

	•	the date or dates on which the senior debt securities will mature;

	•	the rate or rates (which may be fixed or variable) per annum at which the senior debt securities will bear interest or the method by which such rate or rates shall be determined and the date from which such interest will accrue or the method by which such date or dates shall be determined;

	•	the place or places where the principal of (and premium, if any) and interest on the senior debt securities shall be payable;

	•	the dates on which interest will be payable and the regular record dates for such interest payment dates;

	•	the dates, if any, on which, and the price or prices at which, the senior debt securities may, pursuant to any mandatory or optional sinking fund provisions, be redeemed by MichCon and other detailed terms and provisions of such sinking funds;

	•	the date, if any, after which, and the price or prices at which, the senior debt securities may, pursuant to any optional redemption provisions, be redeemed at the option of MichCon or of the holder thereof and other detailed terms and provisions of such optional redemption;

	•	the authorized denominations of the senior debt securities, if other than denominations of $1,000 and any integral multiple thereof;


	•	if other than the principal amount thereof, the portion of the principal amount of the senior debt securities or any of them which shall be payable upon declaration of acceleration of the maturity thereof or the method by which such portion is to be determined;

	•	if other than U.S. dollars, the currency or currencies or currency unit or units of two or more currencies in which senior debt securities are denominated, for which they may be purchased, and in which principal and any premium and interest is payable;

	•	any modifications of or additions to the events of default or covenants with respect to the senior debt securities; and

	•	any other terms of the senior debt securities (which terms shall not be inconsistent with the senior indenture).


	(i) the principal of and premium (if any) in respect of indebtedness of such person for money borrowed and indebtedness evidenced by notes, debentures, bonds or other similar instruments for the payment of which such person is responsible or liable;

	(ii) all Capitalized Lease Obligations of such person;

	(iii) all obligations of such person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);

	(iv) all obligations of such person for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in (i) through (iii) above) entered into in the ordinary course of business of such person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the third business day following receipt by such person of a demand for reimbursement following payment on the letter of credit);

	(v) all obligations of the type referred to in clauses (i) through (iv) of other persons and all dividends of other persons for the payment of which, in either case, such person is responsible or liable as obligor, guarantor or otherwise; and

	(vi) all obligations of the type referred to in clauses (i) through (v) of other persons secured by any Lien on any property or asset of such person (whether or not such obligation is assumed by such person), the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured.


	•	either MichCon shall be the continuing person or the person (if other than MichCon) formed by such consolidation or with which or into which MichCon is merged or the person (or group of affiliated persons) to which all or substantially all the properties and assets of MichCon are sold, assigned, transferred or leased is a corporation (or constitute corporations) organized under the laws of the United States or any State thereof or the District of Columbia and expressly assumes, by an indenture supplemental to the senior indenture, all the obligations of MichCon under the senior debt securities and the senior indenture, executed and delivered to the senior trustee in form satisfactory to the senior trustee;

	•	immediately before and after giving effect to such transaction or series of transactions, no event of default, and no default, with respect to the senior debt securities shall have occurred and be continuing; and

	•	MichCon shall have delivered to the senior trustee an officer’s certificate and an opinion of counsel, each stating that such consolidation, merger or transfer and such supplemental indentures comply with the senior indenture.


	•	Liens for taxes, assessments or governmental charges or levies on its property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings;


	•	Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than 60 days past due or which are being contested in good faith by appropriate proceedings;

	•	Liens arising out of pledges or deposits under worker’s compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation;

	•	utility easements, rights of way, exceptions, agreements for the joint or common use of property, restrictions and such other encumbrances or charges against property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of MichCon or its subsidiaries;

	•	Liens on the capital stock, partnership interest, or other evidence of ownership of any subsidiary or such subsidiary’s assets that secure project financing for such subsidiary;

	•	purchase money liens upon or in property now owned or hereafter acquired in the ordinary course of business (consistent with MichCon’s business practices) to secure the purchase price of such property or Indebtedness incurred solely for the purpose of financing the acquisition, construction, or improvement of any such property to be subject to such liens, or Liens existing on any such property at the time of acquisition, or extensions, renewals, or replacements of any of the foregoing for the same or a lesser amount, provided that no such lien shall extend to or cover any property other than the property being acquired, constructed, or improved and replacements, modifications, and proceeds of such property, and no such extension, renewal, or replacement shall extend to or cover any property not theretofore subject to the Lien being extended, renewed, or replaced;

	•	Liens existing on the date the senior debt securities are first issued;

	•	Liens for no more than 90 days arising from a transaction involving accounts receivable of MichCon (including the sale of such accounts receivable), where such accounts receivable arose in the ordinary course of MichCon’s business;

	•	the right reserved to, or vested in, any municipality or public authority by the terms of any franchise, grant, license or permit, or by any provision of law, to terminate such franchise, grant, license or permit or to purchase or appropriate or recapture or to designate a purchaser of any of the mortgaged property, or to demand and collect from MichCon any tax or other compensation for the use of streets, alleys or other public places;

	•	rights reserved to, or vested in, any municipality or public authority to use, control, remove or regulate any property of MichCon;

	•	zoning laws and ordinances;

	•	possible adverse rights or interests and inconsequential defects or irregularities in title which, in the opinion of counsel, may be properly disregarded; and

	•	rights reserved to or vested in others to take or receive any part of the gas, power, oil or other minerals or timber generated, developed, manufactured or produced by, or grown on, or acquired with, any property of MichCon.


	•	MichCon or such subsidiary could create Indebtedness secured by a lien consistent with the restrictions set forth in the foregoing paragraph on the real property to be leased in an amount equal to the value of such transaction without equally and ratably securing the senior debt securities; or

	•	MichCon, within six months after the sale or transfer shall have been made, applies an amount equal to the greater of (i) the net proceeds of the sale of the real property leased pursuant to such arrangement or (ii) the fair market value of the real property so leased to the retirement of the senior debt securities and other obligations of MichCon ranking on a parity with the senior debt securities.


	•	failure to pay interest on any senior debt security of that series when due, continued for 30 days;

	•	failure to pay the principal of (or premium, if any, on) any senior debt security of that series when due and payable at maturity, upon redemption or otherwise;

	•	failure to observe or perform any other covenant, warranty or agreement contained in the senior debt securities of that series or in the senior indenture (other than a covenant, agreement or warranty included in the senior indenture solely for the benefit of senior debt securities other than that series), continued for a period to 60 days after notice has been given to MichCon by the senior trustee or holders of at least 25% in aggregate principal amount of the outstanding senior debt securities of that series;

	•	failure to pay at final maturity, or acceleration of, Indebtedness, excluding Project Finance Indebtedness, of MichCon having an aggregate principal amount of more than 1% of MichCon’s consolidated total assets (determined as of its most recent fiscal year-end), unless cured within 10 days after notice has been given to MichCon by the senior trustee or holders of at least 10% in aggregate principal amount of the outstanding senior debt securities of that series;

	•	prior to the release date, the occurrence of a default under the mortgage, of which default the mortgage trustee or the holders of a majority in aggregate principal amount of the outstanding senior debt securities have given written notice to the mortgage trustee;

	•	if any substituted collateral bonds are outstanding, the occurrence of a default under the substituted mortgage, of which default the trustee under such substituted mortgage or the holders of a majority in aggregate principal amount of the outstanding senior debt securities have given written notice to the senior trustee;

	•	certain events of bankruptcy, insolvency or reorganization relating to MichCon; and


	•	any other event of default with respect to the senior debt securities of that series specified in the applicable prospectus supplement or supplemental indenture under which that series of senior debt securities is issued.


	•	depositing with the senior trustee, under the terms of an irrevocable trust agreement, money or U.S. government obligations or a combination of money and U.S. government obligations sufficient to pay all remaining indebtedness on the senior debt securities of that series,

	•	delivering to the senior trustee either an opinion of counsel or a ruling directed to the senior trustee the Internal Revenue Service to the effect that the holders of the senior debt securities of that series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and termination of obligations, and

	•	complying with certain other requirements set forth in the senior indenture.


	•	a limited-purpose trust company organized under New York banking laws;

	•	a “banking organization” within the meaning of the New York banking laws;

	•	a member of the Federal Reserve System;

	•	a “clearing corporation” within the meaning of the New York Uniform Commercial Code; and

	•	a “clearing agency” registered under the Securities Exchange Act.


	•	hold securities for “participants”; and

	•	facilitate the computerized settlement of securities transactions among participants through computerized electronic book-entry changes in participants’ accounts, thereby eliminating the need for the physical movement of securities certificates.


	•	DTC notifies us that it is unwilling or unable to continue as depository for the book-entry security or DTC ceases to be a clearing agency registered under the Securities Exchange Act at a time when DTC is required to be so registered; or

	•	we execute and deliver to the senior trustee an order complying with the requirements of the senior indenture that the book-entry security will be so exchangeable; or

	•	an event of default has occurred and is continuing.


	•	a book-entry security may not be transferred except as a whole book-entry security by or among DTC, a nominee of DTC and/or a successor depository appointed by us; and

	•	DTC may not sell, assign or otherwise transfer any beneficial interest in a book-entry security unless the beneficial interest is in an amount equal to an authorized denomination for the securities evidenced by the book-entry security.


	(1) 70% of the cost or fair value to MichCon, whichever is less, of unbonded net property additions made after December 31, 1943 (subject to deductions in certain cases, if such net property additions secure prior lien bonds);

	(2) the sum of the principal amount of first mortgage bonds previously issued under the mortgage indenture, and of prior lien bonds theretofore deducted under the mortgage, which have been retired or are then being retired and have not theretofore been bonded; and

	(3) the amount of cash deposited with the mortgage trustee for such purpose.


	•	we deposit with the mortgage trustee monies or certain obligations of the United States of America or certain securities which are guaranteed by, or backed by obligations of, the United States of America, in an amount sufficient to pay, when due, the principal, premium if any, and any interest due and to become due; and

	•	we deliver an opinion of counsel to the effect that registration is not required under the Investment Company Act of 1940, as amended, applicable laws are not violated, and such discharge will not result in a taxable event with respect to the first mortgage bonds the payment of which is being provided for.


	•	permit the extension of the time or times of payment of the principal of, or the interest or the premium (if any) on, any first mortgage bond, or a reduction in the rate of interest thereon, or otherwise affect the terms of payment of the principal of, or the interest or the premium (if any) on, any first mortgage bond, or affect the right of any holder of first mortgage bonds to institute suit for the enforcement of any such payment on or after the due date thereof,

	•	otherwise than as permitted by the mortgage, permit the creation of any lien ranking prior or equal to the lien of the mortgage with respect to any of the mortgaged properties, or

	•	permit the reduction of the percentage of first mortgage bonds required for the making of any such modification, alteration or waiver.


	•	failure to pay any installment of interest on any first mortgage bond when due and payable, and continuance of such failure for 60 days;

	•	failure to pay the principal of any first mortgage bond when due and payable, whether at maturity, in connection with any sinking fund payment, or otherwise;

	•	failure to pay any installment of interest on any prior lien bonds, and continuance of such failure for the period of grace, if any, specified in the prior lien securing such bonds;

	•	failure to pay any installment applied to the purchase or redemption of any first mortgage bond, and continuance of such failure for 60 days; failure to pay the principal of any prior lien bond when due and payable, whether at maturity or otherwise;

	•	failure on the part of MichCon to perform or observe any other covenant, agreement or condition contained in the mortgage indenture or in the first mortgage bonds or any prior lien bonds, continuance of such failure for 90 days after written notice to MichCon by the mortgage trustee or by the holders of not less than 25% in principal amount of the first mortgage bonds; and

	•	insolvency or bankruptcy, receivership or similar proceedings initiated by MichCon, or initiated against MichCon and not dismissed or stayed within 45 days; and

	•	failure to renew or extend MichCon’s corporate charter upon or prior to the expiration of such under the provision of its articles of incorporation or of law.


	•	Annual Report on Form 10-K for the year ended December 31, 2000, filed on March 15, 2001;

	•	Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, filed on May 14, 2001;

	•	Current Report on Form 8-K filed on March 22, 2001.


	Michigan Consolidated Gas Company
	500 Griswold Street
	Detroit, Michigan 48226
	(313) 235-4000


	(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

	(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;


	(b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

	(c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.


	(a) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

	(b) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.



	Anthony F. Earley, Jr., Chairman of the Board
	President and Chief Executive Officer