EXHIBIT 4.14

EXECUTION VERSION

FIRST MORTGAGE INDENTURE

between

MICHIGAN ELECTRIC TRANSMISSION COMPANY, LLC

and

JPMORGAN CHASE BANK

Trustee

Dated as of December 10, 2003

TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
ARTICLE ONE. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ....     5
SECTION 101. General Definitions ........................................     5
SECTION 102. Compliance Certificates and Opinions .......................    20
SECTION 103. Content and Form of Documents Delivered to Trustee .........    20
SECTION 104. Acts of Holders; Record Dates ..............................    21
SECTION 105. Notices, Etc., to Trustee and Company ......................    23
SECTION 106. Notice to Holders; Waiver ..................................    23
SECTION 107. Conflict with Trust Indenture Act ..........................    23
SECTION 108. Effect of Headings and Table of Contents ...................    24
SECTION 109. Successors and Assigns .....................................    24
SECTION 110. Separability Clause ........................................    24
SECTION 111. Benefits of Indenture ......................................    24
SECTION 112. Governing Law ..............................................    24
SECTION 113. Legal Holidays .............................................    24
SECTION 114. Investment of Cash Held by Trustee .........................    25
SECTION 115. Execution of Other Documents; Conflicts; Agreement of
                Holders .................................................    25

ARTICLE TWO. SECURITY FORMS .............................................    25
SECTION 201. Forms Generally ............................................    25
SECTION 202. Form of Trustee's Certificate of Authentication ............    26

ARTICLE THREE. THE SECURITIES ...........................................    26
SECTION 301. Amount Unlimited; Issuable in Series .......................    26
SECTION 302. Denominations ..............................................    29
SECTION 303. Execution, Authentication, Delivery and Dating .............    29
SECTION 304. Temporary Securities .......................................    30
SECTION 305. Registration, Registration of Transfer and Exchange ........    30
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities ...........    31
SECTION 307. Payment of Interest; Interest Rights Preserved .............    32
SECTION 308. Persons Deemed Owners ......................................    34
SECTION 309. Cancellation ...............................................    34
SECTION 310. Computation of Interest; Usury Not Intended ................    34
SECTION 311. CUSIP Numbers ..............................................    35

ARTICLE FOUR. ISSUANCE OF SECURITIES ....................................    35
SECTION 401. General ....................................................    35
SECTION 402. Limitation on Issuances ....................................    37

ARTICLE FIVE. REDEMPTION OF SECURITIES ..................................    37
SECTION 501. Applicability of Article ...................................    37
SECTION 502. Election to Redeem; Notice to Trustee ......................    37
SECTION 503. Selection by Trustee of Securities to Be Redeemed ..........    38
SECTION 504. Notice of Redemption .......................................    38
SECTION 505. Deposit of Redemption Price ................................    39
SECTION 506. Securities Payable on Redemption Date ......................    40

SECTION 507. Securities Redeemed in Part ................................    40

ARTICLE SIX. COVENANTS ..................................................    40
SECTION 601. Payment of Securities ......................................    40
SECTION 602. Maintenance of Office or Agency ............................    41
SECTION 603. Money for Securities Payments to Be Held in Trust ..........    41
SECTION 604. Maintenance of Existence, etc ..............................    42
SECTION 605. Books and Records ..........................................    42
SECTION 606. Payment of Taxes and Other Claims ..........................    42
SECTION 607. Certain Additional Covenants with Respect to the Mortgaged
                Property ................................................    43
SECTION 608. Covenants in Supplemental Indenture, etc ...................    46
SECTION 609. Waiver of Certain Covenants ................................    46
SECTION 610. Release of Mortgaged Property ..............................    46
SECTION 611. Additional Collateral, etc .................................    47
SECTION 612. Annual Officer's Certificate as to Compliance ..............    47

ARTICLE SEVEN. SATISFACTION AND DISCHARGE ...............................    48
SECTION 701. Satisfaction and Discharge of Debt Securities ..............    48
SECTION 702. Covenant Defeasance ........................................    51
SECTION 703. Satisfaction and Discharge of Indenture ....................    52
SECTION 704. Application of Trust Money .................................    53

ARTICLE EIGHT. EVENTS OF DEFAULT; REMEDIES ..............................    53
SECTION 801. Events of Default ..........................................    53
SECTION 802. Acceleration of Maturity; Rescission and Annulment .........    54
SECTION 803. Entry upon Mortgaged Property ..............................    56
SECTION 804. Power of Sale; Suits for Enforcement .......................    56
SECTION 805. Incidents of Sale ..........................................    59
SECTION 806. Collection of Indebtedness and Suits for Enforcement by
                Trustee .................................................    60
SECTION 807. Application of Money Collected .............................    61
SECTION 808. Receiver ...................................................    62
SECTION 809. Trustee May File Proofs of Claim ...........................    62
SECTION 810. Trustee May Enforce Claims Without Possession of
                Securities ..............................................    63
SECTION 811. Limitation on Suits ........................................    63
SECTION 812. Unconditional Right of Holders to Receive Principal, Premium
                and Interest ............................................    64
SECTION 813. Restoration of Rights and Remedies .........................    64
SECTION 814. Rights and Remedies Cumulative .............................    64
SECTION 815. Delay or Omission Not Waiver ...............................    64
SECTION 816. Control by Holders .........................................    64
SECTION 817. Waiver of Past Defaults ....................................    65
SECTION 818. Undertaking for Costs ......................................    65
SECTION 819. Waiver of Appraisement, Usury, Stay and Other Laws .........    66
SECTION 820. Purchase Upon Set-Off ......................................    66
SECTION 821. Senior Preferential Payments and Special Trust Account .....    66
SECTION 822. Restoration of Obligations .................................    68
SECTION 823. Bankruptcy Preferences .....................................    68
SECTION 824. Additional Remedies with Regard to Mortgaged Property ......    68

ARTICLE NINE. THE TRUSTEE ...............................................    70
SECTION 901. Certain Duties and Responsibilities ........................    70
SECTION 902. Notice of Defaults .........................................    71
SECTION 903. Certain Rights of Trustee ..................................    71
SECTION 904. Not Responsible for Recitals or Issuance of Securities or
                Application of Proceeds .................................    73
SECTION 905. May Hold Securities ........................................    73
SECTION 906. Money Held in Trust ........................................    73
SECTION 907. Compensation and Reimbursement .............................    74
SECTION 908. Conflicting Interests ......................................    74
SECTION 909. Corporate Trustee Required; Eligibility ....................    75
SECTION 910. Resignation and Removal; Appointment of Successor ..........    75
SECTION 911. Acceptance of Appointment by Successor .....................    76
SECTION 912. Merger, Conversion, Consolidation or Succession to
                Business ................................................    77
SECTION 913. Co-trustees and Separate Trustees ..........................    77
SECTION 914. Appointment of Authenticating Agent ........................    78

ARTICLE TEN. LISTS OF HOLDERS; REPORTS BY TRUSTEE AND COMPANY ...........    79
SECTION 1001. Company to Furnish Trustee Names and Addresses of
                 Holders ................................................    79
SECTION 1002. Preservation of Information; Communications to Holders ....    80
SECTION 1003. Reports by Trustee ........................................    80
SECTION 1004. Reports by Company ........................................    80

ARTICLE ELEVEN. MERGER, CONSOLIDATION, CONVEYANCE, TRANSFER OR LEASE ....    80
SECTION 1101. Mergers, Consolidations, Etc ..............................    80
SECTION 1102. Successor Corporation Substituted .........................    82
SECTION 1103. Holdco as Successor Corporation ...........................    82

ARTICLE TWELVE. SUPPLEMENTAL INDENTURES .................................    82
SECTION 1201. Supplemental Indentures Without Consent of Holders ........    82
SECTION 1202. Supplemental Indentures With Consent of Holders ...........    84
SECTION 1203. Execution of Supplemental Indentures ......................    85
SECTION 1204. Effect of Supplemental Indentures .........................    85
SECTION 1205. Conformity with Trust Indenture Act .......................    85
SECTION 1206. Reference in Securities to Supplemental Indentures ........    86
SECTION 1207. Modification Without Supplemental Indenture ...............    86

ARTICLE THIRTEEN. MEETINGS OF HOLDERS; ACTION WITHOUT MEETING ...........    86
SECTION 1301. Purposes for Which Meetings May Be Called .................    86
SECTION 1302. Call, Notice and Place of Meetings ........................    86
SECTION 1303. Persons Entitled to Vote at Meetings ......................    87
SECTION 1304. Quorum; Action ............................................    87
SECTION 1305. Attendance at Meetings; Determination of Voting Rights;
                 Conduct and Adjournment of Meetings ....................    88
SECTION 1306. Counting Votes and Recording Action of Meetings ...........    89
SECTION 1307. Action Without Meeting ....................................    89

ARTICLE FOURTEEN. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS,
                     DIRECTORS AND EMPLOYEES ............................    89
SECTION 1401. Exemption from Individual Liability .......................    89

Exhibit A     Real Property
Exhibit B     Easement Land
Exhibit C     Notice to Trustee of Special Event of Default
Exhibit D     Notice to Trustee of Payment Default

Schedule I    Certain Contracts

FIRST MORTGAGE INDENTURE, dated as of December 10, 2003, between Michigan Electric Transmission Company, LLC, a limited liability company duly organized and existing under the laws of the State of Michigan (herein called the "Company"), having its principal office at 540 Avis Drive, Suite H, Ann Arbor, Michigan 48108, and JPMorgan Chase Bank, a New York banking corporation having an office at 4 New York Plaza, New York, New York 10004, as trustee (herein called the "Trustee").

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this Indenture, as originally executed and delivered, to provide for (i) the issuance from time to time of its bonds, notes or other evidences of indebtedness (herein called the "Debt Securities"), to be issued in one or more series as contemplated herein, and to provide security for the payment of the principal of and premium, if any, and interest, if any, on such Securities, and (ii) the issuance from time to time of its bonds, notes or other evidences of indebtedness, to be issued in one or more series as contemplated herein, solely to provide security for the payment of the principal of and premium, if any, and interest, if any, on the Company's Senior Secured Debt (other than the Debt Securities) (herein called the "Collateral Securities" and, together with the Debt Securities, the "Securities"). All acts necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been performed. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires, capitalized terms used herein shall have the meanings assigned to them in Article One of this Indenture.

GRANTING CLAUSES

NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, in consideration of the premises and of the purchase or other acquisition of the Securities by the Holders thereof, and in order to secure the payment of the principal of and premium, if any, and interest, if any, on, and all other amounts (including, without limitation, fees, expenses and indemnities) in connection with, all Securities from time to time Outstanding and the performance of the covenants therein and herein contained and to declare the terms and conditions on which such Securities are secured, the Company hereby grants, bargains, sells, conveys, assigns, transfers, mortgages, pledges, sets over and confirms to the Trustee, and grants to the Trustee, for itself and for the benefit of the Holders, with power of sale, a lien upon and a security interest in, the following (subject, however, to the terms and conditions set forth in this Indenture):

GRANTING CLAUSE FIRST

All right, title and interest of the Company, as of the date of the execution and delivery of this Indenture, as originally executed and delivered, in and to all of the following property:

(a) all real property owned in fee and other interests in real property located in the State of Michigan or wherever else situated, as described in Exhibit A hereto;

(b) the entire easement estate created under and by virtue of the Easement Agreement (as defined in Section 101 hereof), including any interest in any fee, or greater or lesser title to such easement estate, including, without limitation, the Company's interest in the parcels of real property described in Exhibit B hereto attached for purposes of local recording of this Indenture (collectively, the "Easement Land") and the Improvements (as defined below) that the Company may own or hereafter acquire (whether acquired pursuant to a right or option contained in the Easement Agreement or otherwise) and all credits, deposits, options, privileges and rights of the Company under the Easement Agreement (including all rights of use, occupancy and enjoyment) and under any amendments, supplements, extensions, renewals, restatements, replacements and modifications thereof (including, without limitation, (i) the right to give consents, (ii) the right to receive moneys payable to the Company, (iii) the right to renew or extend the Easement Agreement for a succeeding term or terms,
(iv) the right, if any, to purchase the Real Estate (as defined below) and (v) the right to terminate or modify the Easement Agreement); all of the Company's claims and rights to the payment of damages arising under the Bankruptcy Code (as defined in Section 101 hereof) from any rejection of the Easement Agreement by the grantor thereunder or any other party (such parcel(s) of real property (including the real property owned in fee and the Easement Land and the Company's easement estate), together with all of the buildings, improvements, structures and fixtures now or subsequently located thereon (the "Improvements") are collectively referred to as the "Real Estate");

(c) the Improvements or any part thereof (whether owned in fee by the Company or held pursuant to the Easement Agreement or otherwise) and all the estate, right, title, claim or demand whatsoever of the Company, in possession or expectancy, in and to the Real Estate or any part thereof;

(d) all rights of way, gores of land, streets, ways, alleys, passages, sewer rights, waters, water courses, water and riparian rights, development rights, air rights, mineral rights and all estates, rights, titles, interests, privileges, licenses, tenements, hereditaments and appurtenances belonging, relating or appertaining to the Real Estate, and any reversions, remainders, rents, issues, profits and revenue thereof and all land lying in the bed of any street, road or avenue, in front of or adjoining the Real Estate to the center line thereof (the assets described in clauses (a), (b) and (c) above and this clause (d) are collectively referred to as the "Real Property");

(e) all fixtures, towers, pole structures, poles, crossarms, wires, cables, conduits, guys, anchors, transformers, insulators, substations, switching stations, chattels, business machines, machinery, apparatus, equipment, furnishings, fittings and articles of personal property of every kind and nature whatsoever, and all appurtenances and additions thereto and substitutions or replacements thereof (together with, in each case, attachments, components, parts and accessories) currently owned or subsequently acquired by the Company and now or subsequently attached to, or contained in or used or usable in any way in connection with any operation or letting of the Real Estate, including but without limiting the generality of the foregoing, all screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs, storm doors and windows, furniture and furnishings, heating, electrical, and mechanical equipment, lighting, switchboards, plumbing, ventilating, air conditioning and air-cooling apparatus, refrigerating, and incinerating equipment, escalators, elevators, loading and unloading equipment and systems, stoves, ranges, laundry equipment, cleaning systems (including window cleaning apparatus), telephones, communication systems (including satellite dishes and antennae), televisions, computers, sprinkler systems and other fire prevention and extinguishing apparatus and materials, security systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of every kind and description and all other assets that constitute "Equipment" as defined in the Uniform Commercial Code (all of the foregoing in this clause (e), collectively being referred to as the "Equipment");

(f) all substitutes and replacements of, and all additions and improvements to, the Real Estate and the Equipment, subsequently acquired by or released to the Company or constructed, assembled or placed by the Company on the Real Estate, immediately upon such acquisition, release, construction, assembling or placement, including, without limitation, any and all building materials whether stored at the Real Estate or offsite, and, in each such case, without any further mortgage, conveyance, assignment or other act by the Company;

(g) all leases, subleases, underlettings, concession agreements, management agreements, licenses and other agreements relating to the use or occupancy of the Real Estate or the Equipment or any part thereof, now existing or subsequently entered into by the Company and whether written or oral and all guarantees of any of the foregoing (collectively, as any of the foregoing may be amended, restated, extended, renewed or modified from time to time, the "Leases"), and all rights of the Company in respect of cash and securities deposited thereunder and the right to receive and collect the revenues, income, rents, issues and profits thereof, together with all other rents, royalties, issues, profits, revenue, income and other benefits arising from the use and enjoyment of the Mortgaged Property (collectively, the "Rents"), including, but not limited to, all rights conferred by Act No. 210 of the Michigan Public Acts of 1953 as amended by Act No. 151 of the Michigan Public Acts of 1966 (MCLA 554.231 et seq.), and Act No. 228 of the Michigan Public Acts of 1925 as amended by Act No. 55 of the Michigan Public Acts of 1933 (MCLA 554.211 et seq.);

(h) all trade names, trade marks, logos, copyrights, good will and books and records relating to or used in connection with the operation of the Real Estate or the Equipment or any part thereof, all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom; all general intangibles related to the operation of the Improvements now existing or hereafter arising and all other assets that constitute "Intellectual Property" as defined in the Uniform Commercial Code (all of the foregoing in this clause (h), collectively being referred to as "Intellectual Property");

(i) all unearned premiums under insurance policies now or subsequently obtained by the Company relating to the Real Estate or Equipment and the Company's interest in and to all proceeds of any such insurance policies (including title insurance policies) including the right to collect and receive such proceeds, subject to the provisions relating to insurance generally set forth below; and all awards and other compensation, including the interest payable thereon and the right to collect and receive the same, made to the present or any subsequent owner of the Real Estate or Equipment for the taking by eminent domain, condemnation or otherwise, of all or any part of the Real Estate or any easement or other right therein;

(j) all contracts from time to time executed by the Company or any Manager or agent on its behalf relating to the ownership, construction, maintenance, repair, operation, occupancy, sale or financing of the Real Estate or Equipment or any part thereof and all agreements relating to the purchase or lease of any portion of the Real Estate or any property which is adjacent or peripheral to the Real Estate, together with the right to exercise such options and all leases of Equipment; all consents, licenses, building permits, certificates of occupancy and other Governmental Approvals relating to construction, completion, occupancy, use or operation of the Real Estate or any part thereof; and all drawings, plans, specifications and similar or related items relating to the Real Estate (all of the foregoing in this clause (j) being referred to as "Real Estate Contracts");

(k) any and all moneys now or subsequently on deposit for the payment of real estate taxes or special assessments against the Real Estate or for the payment of premiums on insurance policies covering the foregoing property or otherwise on deposit with or held by the Company as provided in this Indenture;

(l) any right to payment of a monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered,
(iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a state, governmental unit of a state, or person licensed or authorized to operate the game by a state or governmental unit of the state;

(m) all Accounts;

(n) all Chattel Paper;

(o) all Contracts;

(p) all Deposit Accounts;

(q) all Documents;

(r) all General Intangibles;

(s) all Instruments;

(t) all Inventory;

(u) all Investment Property;

(v) all Letter of Credit Rights;

(w) all other property not otherwise described above;

(x) all books and records pertaining to the Mortgaged Property; and

(y) to the extent not otherwise included, all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing.

GRANTING CLAUSE SECOND

All right, title and interest of the Company in all property described in the foregoing Granting Clause First, which may be hereafter acquired by the Company, it being the intention of the Company that all such property and all such rights, title and interests acquired by the Company after the date of the execution and delivery of this Indenture, as originally executed and delivered, shall be as fully embraced within and subjected to the Lien hereof as if such property were owned by the Company as of the date of the execution and delivery of this Indenture, as originally executed and delivered;

GRANTING CLAUSE THIRD

All tenements, hereditaments, servitudes and appurtenances belonging or in any wise appertaining to the aforesaid property, with the reversions and remainders thereof;

TO HAVE AND TO HOLD all such property, unto the Trustee, its successors in trust and their assigns forever;

IN TRUST, for the equal and ratable benefit and security of the Holders from time to time of all Outstanding Securities without any priority of any such Security over any other such Security;

PROVIDED, HOWEVER, that the right, title and interest of the Trustee in and to the Mortgaged Property shall cease, terminate and become void in accordance with, and subject to the conditions set forth in, Article Seven or Article Twelve hereof, and if, thereafter, the principal of and premium, if any, and interest, if any, on, and any other amounts (including, without limitation, fees, expenses and indemnities) in connection with, the Securities shall have been paid to the Holders thereof, or shall have been paid to the Company pursuant to Section 603 hereof, then and in that case this Indenture shall terminate, and the Trustee shall execute and deliver to the Company such instruments as the Company shall require to evidence such termination; otherwise this Indenture, and the estate and rights hereby granted, shall be and remain in full force and effect; and

IT IS HEREBY COVENANTED AND AGREED by and between the Company and the Trustee that all the Securities are to be authenticated and delivered, and that the Mortgaged Property is to be held, subject to the further covenants, conditions and trusts hereinafter set forth, and the Company hereby covenants and agrees to and with the Trustee, for the equal and ratable benefit of all Holders, as follows:

ARTICLE ONE.

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 101. General 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 One have the meanings assigned to them in this Article One and include the plural as well as the singular;

(2) all other terms used herein without definition which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

(3) the following terms are used herein as defined in the Uniform Commercial Code: Accounts, Certificated Security, Chattel Paper, Documents, General Intangibles, Instruments, Inventory, Investment Property, Letter of Credit Rights and Supporting Obligations;

(4) all terms used herein without definition which are defined in the Uniform Commercial Code as in effect in any jurisdiction in which any portion of the Mortgaged Property is located shall have the meanings assigned to them therein with respect to such portion of the Mortgaged Property;

(5) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" or "GAAP" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States at the date of the execution and delivery of this Indenture, as originally executed and delivered;

(6) unless the context otherwise requires, any reference to an "Article" or a "Section" refers to an Article or a Section, as the case may be, of this Indenture;

(7) 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;

(8) words importing any gender include the other genders;

(9) references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to;

(10) references to "writing" include printing, typing, lithography and other means of reproducing words in a visible form;

(11) the words "including," "includes" and "include" shall be deemed to be followed by the words "without limitation"; and

(12) unless otherwise provided, references to agreements and other instruments shall be deemed to include all amendments and other modifications to such agreements and instruments, but only to the extent such amendments and other modifications are not prohibited by the terms of this Indenture.

"Accountant" means a Person engaged in the accounting profession or otherwise qualified to pass on accounting matters (including, but not limited to, a Person certified or licensed as a public accountant, whether or not then engaged in the public accounting profession), which Person, unless required to be Independent, may be an employee or Affiliate of the Company.

"Act", when used with respect to any Holder, has the meaning specified in
Section 104.

"Actual Interest" means (i) with respect to any Outstanding Debt Securities, interest on the Outstanding principal amount thereon due and unpaid and (ii) with respect to any Outstanding Collateral Securities, (x) interest on the Outstanding principal amount thereon (including interest on any unreimbursed drawings under letters of credit) due and unpaid, (y) commitment and facility fees, if any, outstanding and payable to the holders (or their agents or representatives) of the Other Senior Secured Debt Securities to which such Outstanding Collateral Securities relate, and (z) letter of credit fees, if any, outstanding and payable to the holders (or their agents or representatives) of the Other Senior Secured Debt Securities to which such Outstanding Collateral Securities relate.

"Affiliate" means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" of a Person means the authority, directly or indirectly whether acting alone or in conjunction with others, to either (i) vote ten percent (10%) or more of the securities having ordinary voting authority for the election of directors (or persons performing similar functions) of such Person or (ii) direct or cause the direction of the management and policies of such Person, whether by contract or

otherwise. With respect to the Company, Affiliate shall include the general partner of Holdco and each limited partner of Holdco, regardless of whether such entity controls the Company, and their respective Affiliates.

"Applicable Governmental Authority" has the meaning set forth in Section 607(f).

"Assigned Agreements" means those agreements listed on Schedule 1 to the Consumers Consent.

"Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 914 to act on behalf of the Trustee to authenticate Securities of one or more series.

"Authorized Officer" means the Manager, the President, any Vice President or the Treasurer of the Company, or any other duly authorized officer of the Company named in an Officer's Certificate signed by any of such Company officers.

"Authorized Publication" means a newspaper or financial journal of general circulation, printed in the English language and customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays; or, in the alternative, shall mean such form of communication as may have come into general use for the dissemination of information of import similar to that of the information specified to be published by the provisions hereof. In the event that successive weekly publications in an Authorized Publication 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 Publications. In case, by reason of the suspension of publication of any Authorized Publication, or by reason of any other cause, it shall be impractical without unreasonable expense to make publication of any notice in an Authorized Publication 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 Publication.

"Bankruptcy Code" means 11 U.S.C., as amended.

"Bankruptcy Proceeding" shall mean, with respect to any Person, a general assignment by such Person for the benefit of its creditors, or the institution by or against such Person of any proceeding seeking relief as debtor, or seeking to adjudicate such Person as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of such Person or its debts, under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, or seeking appointment of a receiver, trustee, custodian or other similar official for such Person or for any substantial part of its property.

"Business Day", when used with respect to any Place of Payment or any other particular location specified in the Securities or this Indenture, 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 executive order to close.

"Capital Lease" means a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

"Capital Lease Obligation" means, with respect to any Person and a Capital Lease, the amount of the obligation of such Person as the lessee under such Capital Lease which would, in accordance with GAAP, appear as a liability on a balance sheet of such Person.

"Capital Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) in the equity of such Person, including, without limitation, all partnership interests, common stock and preferred stock and any and all warrants, rights or options to purchase any of the foregoing.

"Cash Equivalents" means (i) obligations of or directly and fully guaranteed by the United States, or of any agency or instrumentality thereof, maturing not later than three hundred sixty-five (365) days from the date of acquisition thereof, (ii) commercial paper rated (on the date of acquisition thereof) A-1 (or the equivalent thereof) or better by S&P and P-1 (or the equivalent thereof) or better by Moody's, maturing not later than two hundred seventy (270) days from the date of acquisition thereof, (iii) guaranteed investment contracts maturing not later than three hundred sixty-five (365) days from the date of acquisition thereof and entered into with (or fully guaranteed by) financial institutions whose long-term unsecured non-credit enhanced indebtedness is rated A- or better by S&P and A3 or better by Moody's, and (iv) investments in money market funds having a rating from each of S&P and Moody's in the highest investment category granted thereby.

"Collateral Securities" has the meaning stated in the first recital of this Indenture.

"Commission" means the United States Securities and Exchange Commission, from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this Indenture, as originally executed and delivered, 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.

"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" mean, respectively, a written request or order signed in the name of the Company by its Manager, its Chief Executive Officer, its Chief Financial Officer, its President, a Vice President, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee.

"Company 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 Manager or the sole member of the Company and to be in full force and effect on the date of such certification, and delivered to the Trustee.

"Consumers" means Consumers Energy Company, a Michigan corporation.

"Consumers Consent" means the Consent and Agreement, dated as of December 10, 2003, by and between Consumers and the Trustee.

"Contracts" means the Transmission Documents and the other contracts and agreements listed in Schedule I hereto to which the Company is a party, as the same may be amended, supplemented or otherwise modified from time to time, including, without limitation, (i) all rights of the Company to receive moneys due and to become due to it thereunder or in connection therewith, (ii) all rights of the Company to damages arising thereunder and (iii) all rights of the Company to perform and to exercise all remedies thereunder.

"Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of the execution and

delivery of this Indenture, as originally executed and delivered, is located at 4 New York Plaza, New York, New York 10004.

"Corporation" means a corporation, limited liability company, company, association, joint-stock company or business trust.

"Current Revenue Requirement" means the maximum amount of revenue the Company is authorized to recover consistent with applicable FERC orders and upon which rates for transmission service under the OATT are based as of the date the Note Agreement is executed.

"Debt" means, without duplication, with respect to any Person, the sum of
(a) liabilities for borrowed money, (b) liabilities (excluding accounts payable and other accrued liabilities arising in the ordinary course of business) for the deferred purchase price of property and conditional sale or title retention agreements, (c) Capital Lease Obligations, (d) liabilities for borrowed money secured by a Lien on property, (e) reimbursement obligations (contingent or otherwise) in respect of letters of credit, performance bonds or bankers' acceptances, (f) obligations under any Hedging Agreements, (g) liabilities for Synthetic Leases, (h) obligations evidenced by bonds, debentures, notes or similar instruments and (i) any guarantee with respect to liabilities in clauses
(a) through (h) above, but excluding for the period from the date the Note Agreement is executed to, but excluding, the Final Rate Case Determination Date only, liabilities to independent power producers in respect of deposits held on behalf of such independent power producers for interconnection or transmission system upgrades. All references in this Indenture to the principal amount of Debt outstanding at any time shall be understood to include not only the principal amount of any liabilities for borrowed money or of any bonds, debentures, notes or similar instruments, but also obligations (including those related to reimbursement obligations in respect of letters of credit, but excluding those in respect of interest, fees and other similar amounts) under all other types of Debt described in this definition.

"Debt Securities" has the meaning stated in the first recital to this Indenture.

"Default" means the occurrence and continuance of an event, which, with the giving of notice or lapse of time, or both, would constitute an Event of Default.

"Default Rate" has the meaning specified in Section 804(3). "Defaulted Interest" has the meaning specified in Section 307.

"Deposit Account" has the meaning specified in the Uniform Commercial Code and, in any event, includes, without limitation, any demand, time, savings, passbook, or similar account maintained with a depositary institution.

"Dollar" or "$" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debts.

"Easement Agreement" means the Amended and Restated Easement Agreement, dated as of April 29, 2002, between the Company and Consumers, as amended by Supplement No. 1, and by Supplement No. 2, each dated as of April 29, 2002, and as further amended by Supplement No. 3, dated as of March 3, 2003.

"Easement Land" has the meaning specified in Granting Clause First.

"Environmental Law" means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including, but not limited to those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

"Equipment" has the meaning specified in Granting Clause First.

"Event of Default" has the meaning specified in Section 801.

"Event of Loss" means an event (other than a Total Loss), including, without limitation, any Taking, which causes all or a material portion of the Transmission System to be damaged, destroyed or rendered unfit for normal use for any reason whatsoever.

"Exchange Act" means the United States Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time and the rules and regulations of the Commission promulgated thereunder.

"Expiration Date" has the meaning specified in Section 104.

"FERC" means the United States Federal Energy Regulatory Commission.

"Final Rate Case Determination Date" means in regard to the increase in Current Revenue Requirement the Company is expected to seek in connection with the termination of the Network Integration Transmission Service Agreement, the earlier of (a) FERC's acceptance or approval of the rates sought by the Company pursuant to an order that does not suspend or make subject to refund the rates sought by the Company, or (b) the issuance of a final order by FERC with respect to such requested rates for which the period for rehearing has expired or the disposition of any appeals of such order has been completed.

"Financing Agreements" means this Indenture (excluding, with respect to this definition, except as set forth in this definition, any indenture supplemental hereto), the First Supplemental Indenture, the Second Supplemental Indenture, the Note Agreement, the Securities issued pursuant to the First Supplemental Indenture and the Second Supplemental Indenture, and the Consumers Consent.

"First Supplemental Indenture" means the First Supplemental Indenture to this Indenture dated as of December 10, 2003, between the Company and the Trustee.

"GAAP" has the meaning specified in Section 101(5).

"Good Utility Practice" means any of the practices, methods and acts engaged in or approved by a significant portion of the electric transmission industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to be acceptable practices, methods or acts generally accepted in the region.

"Government Obligations" means:

(a) any security which is (i) a direct obligation of the United States for the payment of which the full faith and credit of the United States is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and

(b) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any Government Obligations which is specified in clause (a) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any Government Obligations which is so specified and held; 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 depositary receipt from any amount received by the custodian in respect of the Government Obligations or the specific payment of principal or interest evidenced by such depositary receipt.

"Governmental Approval" means any authorization, consent, approval, license, franchise, ruling, tariff, rate, permit, certificate, exemption of, or filing or registration with, any Governmental Authority required in connection with:

(1) the execution, delivery or performance of any Transmission Document by any party thereto;

(2) the grant and perfection of any Lien contemplated to be granted by this Indenture; or

(3) the ownership, development, expansion, operation or maintenance of the Transmission System.

"Governmental Authority" means any nation or the federal government of the United States, any state or other political subdivision or agency thereof (including, but not limited to, the FERC), and any legally constituted entity legally empowered to exercise executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any other governmental entity with authority over any aspect of ownership, development, expansion, maintenance or operation of the Transmission System.

"Hedging Agreement" means all interest rate swaps, caps or collar agreements or similar arrangements dealing with interest rates or currency exchange rates or the exchange of nominal interest obligations, either generally or under specific contingencies.

"Holdco" means Michigan Transco Holdings, Limited Partnership, a Michigan limited partnership.

"Holder" means a Person in whose name a Security is registered in the Security Register.

"Holder Set-Off Amount" has the meaning specified in Section 820.

"Improvements" has the meaning specified in Granting Clause First.

"Indenture" means this instrument as originally executed and delivered and 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. The term "Indenture" shall also include the terms of particular series of Securities established as contemplated by Section 301.

"Independent", when applied to any specified Person, means such a Person who (a) is in fact independent, (b) does not have any direct Material financial interest in the Company or in any other obligor upon the Securities or in any Affiliate of the Company or of such other obligor, (c) is not connected with the Company or such other obligor as an officer, employee, promoter, underwriter, trustee, partner, director or any person performing similar functions and (d) is approved by the Trustee in the exercise of reasonable care.

"Intellectual Property" has the meaning specified in Granting Clause First.

"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 or a date of Maturity with respect to such Security.

"Issuer" means each issuer of any Investment Property.

"Law" means any foreign, federal, state, local (including municipal) or other statute, law, rule, regulation, ordinance, order, code, policy or rule of common law, now or hereafter in effect, and any judicial or administrative interpretation thereof by a Governmental Authority or otherwise (including any judicial or administrative order, consent decree or judgment to which the Company is a party).

"Leases" has the meaning specified in Granting Clause First.

"Lien" means, with respect to any Person, any mortgage, lien, pledge, charge, security interest, or other encumbrance, or any interest or title of any vendor, lessor, lender or secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease with respect to any property or asset of such Person.

"Loss Proceeds" means all net proceeds from an Event of Loss, including, without limitation, condemnation proceeds and insurance proceeds or other amounts actually received by or on behalf of the Company on account of an Event of Loss.

"Manager" means the appointed manager of the Company within the meaning of the Michigan Limited Liability Company Act.

"Material" means material in relation to the business, operations, affairs, financial condition, assets, prospects or properties of the Company.

"Material Adverse Effect" means a material adverse effect on (a) the business, operations, affairs, financial condition, prospects, assets or properties of the Company, (b) the ability of the Company to perform its obligations under any Financing Agreement or the Revolving Facility (including, the timely payments of principal of, or premium, if any, and interest on, the Securities), (c) the legality, validity or enforceability of any Financing Agreement or the Revolving Facility or (d) the perfection or priority of the Liens purported to be created pursuant to this Indenture or the rights and remedies of the Holders with respect thereto.

"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.

"Maximum Interest Rate" has the meaning specified in Section 310.

"MISO" means the Midwest Independent Transmission System Operator, Inc.

"Moody's" means Moody's Investors Service, Inc., or any successor thereto.

"Mortgaged Property" means, as of any particular time, all property which at such time is subject to the Lien of this Indenture.

"Network Integration Transmission Service Agreement" means the April 29, 2002 Amendment and Restatement of the Network Integration Transmission Service Agreement, dated as of April 1, 2001, between the Company and Consumers Energy Company.

"Note Agreement" means that certain Note Purchase Agreement, dated as of December 10, 2003, between the Company and each Holder listed on Schedule A attached thereto.

"Notice of Default" has the meaning specified in Section 801.

"OATT" means, at any given time, the open access transmission tariff of the Company or MISO that is applicable to the Company, approved by the FERC and then in effect.

"Officer's Certificate" means a certificate signed by an Authorized Officer and delivered to the Trustee.

"Opinion of Counsel" means a written opinion of counsel, who shall not be in-house counsel for the Company nor an employee of the Company, but shall be counsel of national standing, 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 802.

"Other Senior Secured Debt Securities" means Senior Secured Debt of the Company (other than the Securities) which is secured by Collateral Securities.

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

(1) Securities theretofore canceled or delivered to the Security Registrar or the Trustee for cancellation;

(2) Securities, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been irrevocably deposited in trust with the Trustee or a Paying Agent, provided that if such Securities are to be redeemed prior to the Stated Maturity thereof, notice of such redemption shall have been given as provided in Article Five, or provisions satisfactory to the Trustee shall have been made for giving such notice;

(3) Securities deemed to have been paid for all purposes of this Indenture in accordance with Section 701 (whether or not the Company's indebtedness in respect thereof shall be satisfied and discharged for any other purpose); and

(4) Securities which have been paid pursuant to Section 306 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 and the Company that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;

provided, however, that in determining whether or not the Holders of the requisite principal amount of the Outstanding Securities under this Indenture, or the Outstanding Securities of any series or Tranche, have given, made or taken any request, demand, authorization, direction, notice, consent, election, waiver or other action hereunder or whether or not a quorum is present at a meeting of Holders, as of any date, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 802; (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 301; (C) the principal amount of any Collateral Securities shall be determined as follows: (i) prior to the occurrence of an Event of Default, the Outstanding principal amount of any Collateral Securities shall equal the sum of (a) the principal amount of Debt of the Company (including the undrawn amount of any letters of credit issued on behalf of the Company) actually outstanding under the Other Senior Secured Debt Securities with respect to which such Collateral Security was issued, plus (b) any unfunded commitment to extend credit to the Company pursuant to the Senior Secured Debt Agreement with respect to which the Collateral Security was issued; provided that, in the case of clause (b), when the Trustee notifies the Holders (or an agent(s) on their behalf) of the date of determination of the principal amount Outstanding with respect to such Collateral Security (which date shall be at least 5 days after the date the Holders have received such notice from the Trustee), the Holders of such Collateral Security (or an agent(s) on their behalf) shall deliver a certificate to the Trustee on or before such date of determination stating that, to its knowledge, the Company would be able on such date of determination to satisfy the conditions to extensions of credit under such Senior Secured Debt Agreement if the Company were to have requested an extension of credit to be made on such date in accordance with the terms and conditions of such Senior Secured Debt Agreement; or (ii) after the occurrence and during the continuance of an Event of Default, the Outstanding principal amount of any Collateral Security shall equal the principal amount of the Debt of the Company (including the undrawn amount of any letters of credit issued on behalf of the Company) actually outstanding under the Other Senior Secured Debt Securities with respect to which such Collateral Security was issued and not any unfunded commitment to extend credit; and (D) 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, election, waiver or other action, 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;

provided, further, that for purposes of determining the portion of any proceeds of the Mortgaged Property, payments by the Company or other amounts to be distributed to the Holders by the Trustee, the principal amount of any Collateral Securities shall be equal to the principal amount of Debt of the

Company actually outstanding under the Other Senior Secured Debt Securities with respect to which such Collateral Securities were issued;

and provided, further, that in determining the principal amount of any Collateral Securities that is Outstanding for any purpose hereunder (including the amount of any unfunded commitment to extend credit to the Company included in such principal amount in accordance with clause (C)(i)(b) of the first proviso to this definition), the Trustee shall be protected in relying upon a notice from the Holder (or its agent). In the absence of any such notice, the Trustee shall not be charged with notice of any principal payment, prepayment, borrowing, reborrowing or other extension of credit and the resulting increase or decrease in the principal amount of such Collateral Securities, and the Trustee may conclusively rely on the correctness of any such notice.

"Paying Agent" means any Person, other than the Company or any of its Affiliates, authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.

"Periodic Offering" means an offering of Securities of a series from time to time any or all of the specific terms of which Securities, including, without limitation, the rate or rates of interest, if any, thereon, the Stated Maturity or Maturities thereof and the redemption provisions, if any, with respect thereto, are to be determined by the Company or its agents from time to time subsequent to the initial request for the authentication and delivery of such Securities by the Trustee, all as contemplated in Section 301 and clause (2) of
Section 401.

"Permitted Additional Senior Secured Debt" has the meaning assigned to that term in Section 3.02(e) of the First Supplemental Indenture.

"Permitted Liens" means:

(1) Liens for taxes, assessments or other governmental charges which are not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate cash reserves in accordance with GAAP or other acceptable security is maintained by the Company;

(2) Liens incidental to the conduct of business or the ownership of properties and assets (including landlords', carriers', warehousemen's, mechanics', materialmen's and other similar Liens) arising in the ordinary course of business and not in connection with borrowed money which (i) relate to obligations that are not yet due or (ii) are being contested in good faith and for which adequate cash reserves in accordance with GAAP or other security acceptable to the Person whose Lien is being contested is maintained by the Company;

(3) Liens to secure the performance of bids, tenders, leases, or trade contracts, or to secure statutory obligations (including obligations under workers compensation, unemployment insurance and other social security legislation), surety or appeal bonds or other Liens, incurred in the ordinary course of business and not in connection with borrowed money;

(4) Liens resulting from judgments arising in connection with court proceedings that are being contested in good faith and for which adequate cash reserves in accordance with GAAP or other acceptable security are maintained by the Company, unless such judgments are not, within thirty (30) days, discharged or stayed pending appeal, or shall not have been discharged within thirty (30) days after the expiration of any such stay or are such that create an Event of Default;

(5) Liens in the Mortgaged Property granted pursuant to this Indenture;

(6) Leases, subleases, easements, rights-of-way, restrictions and other similar charges or encumbrances incidental to the ownership of property or assets or the ordinary conduct of the Company's business; provided that the aggregate of such Liens does not materially (i) detract from the operation or value of such property or (ii) interfere with the use of the property and assets of the Company in the ordinary course of business; and

(7) Liens securing Debt of the Company incurred to finance the acquisition of fixed or capital assets; provided, that (i) such Liens shall be created substantially simultaneously with the acquisition of such fixed or capital assets, (ii) such Liens do not at any time encumber any Property other than the Property financed by such Debt, (iii) the amount of Debt secured thereby is not increased and (iv) the aggregate principal amount of Debt secured by all such Liens does not exceed $5,000,000 at any one time outstanding.

"Person" means any individual, Corporation, partnership, limited partnership, limited liability partnership, joint venture, trust, unincorporated organization or any Governmental Authority.

"Place of Payment", when used with respect to the Securities of any series, or any Tranche thereof, means the place or places where the principal of and any premium and interest on the Securities of that series, or any Tranche thereof, are payable, to the extent that the Securities of such series, or any Tranche thereof, are entitled to the payment of principal, premium and/or interest, as specified as contemplated by Section 301.

"Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

"Pro Rata Portion" means, with respect to any series of Outstanding Securities entitled to redemption from any Loss Proceeds in accordance with
Section 501, as of any date, a fraction (x) the numerator of which shall equal the aggregate principal amount of the Outstanding Securities of such series and
(y) the denominator of which shall equal the sum of (i) the aggregate principal amount of all Outstanding Securities entitled to redemption from such Loss Proceeds in accordance with Section 501 and (ii) the outstanding principal amount of all Other Senior Secured Debt Securities entitled to redemption, repayment, reduction or prepayment from such Loss Proceeds at such date in accordance with the terms thereof; provided, that for purposes hereof, Collateral Securities issued in respect of Other Senior Secured Debt Securities entitled to redemption, repayment, reduction or prepayment from such Loss Proceeds shall be excluded from any calculation of "Outstanding Securities" pursuant hereto.

"Proceeds" means all "proceeds" as such term is defined in the Uniform Commercial Code and, in any event, shall include, without limitation, all dividends or other income from Investment Property, collections thereon or distributions or payments with respect thereto.

"Property" means any right or interest in or to assets or property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

"Protected Purchaser" has the meaning specified in Section 8-303 of the Uniform Commercial Code.

"Real Estate" has the meaning specified in Granting Clause First.

"Real Estate Contracts" has the meaning specified in Granting Clause First.

"Real Property" has the meaning specified in Granting Clause First.

"Receivable" means any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, any Account).

"Redemption Date", when used with respect to any Security 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 to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture or the terms of the Securities as contemplated by Section 301.

"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 301.

"Rents" has the meaning specified in Granting Clause First.

"Responsible Officer", when used with respect to the Trustee, means an officer in the Institutional Trust Services department (or any successor department) of the Trustee having direct responsibility for administration of this Indenture.

"Revolving Facility" means (i) the $35,000,000 revolving credit facility for working capital, capital expenditures and general corporate purposes of the Company under the Credit Agreement, dated as of December 10, 2003, among the Company, the lenders from time to time a party thereto and JPMorgan Chase Bank, as administrative agent, together with any amended, restated, supplemented, refinanced or replacement credit facility in an amount not to exceed, prior to the Final Rate Case Determination Date, $35,000,000, whether or not with the original lenders or agents thereunder, together with (ii) the Second Supplemental Indenture relating to the Collateral Securities issued with respect to the above referenced revolving credit facility (or any other indenture supplemental hereto that would relate to any replacement or refinanced credit facility referred to in clause (i) above).

"S&P" means Standard & Poor's Rating Services, a division of McGraw-Hill Companies, Inc., or any successor thereto.

"Second Supplemental Indenture" means the Second Supplemental Indenture to this Indenture dated as of December 10, 2003, between the Company and the Trustee (or any other indenture supplemental hereto that would relate to any replacement or refinanced credit facility referred to in clause (i) of the definition of Revolving Facility).

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

"Securities Act" means the United States Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

"Security Register" and "Security Registrar" have the respective meanings specified in Section 305.

"Senior Preferential Payment" means (a) any payment (including any deposit of cash collateral) of principal, interest or premium obtained by a Holder in respect of the Securities or Other Senior Secured Debt Securities held by it through the exercise of any remedy (including the commencement and prosecution of any litigation and the exercise of any right of setoff or right to demand cash collateral) available to such Holder as a result of the occurrence and continuance of any Event of Default or (b) any payment (including any deposit of cash collateral or by the exercise of any right of setoff) of principal, interest or premium obtained by a Holder, lender or creditor in respect of the Securities or Other Senior Secured Debt Securities held by it after it shall have received notice pursuant to Section 821(6) of or otherwise shall have actual knowledge of the occurrence and during the continuance of one or more Special Events of Default (unless such payment would cure all such Special Events of Default); provided that no payment made to a Holder pursuant to
Section 807 or received by any Holder in any Bankruptcy Proceeding pursuant to a plan of reorganization or other action approved in writing by Holders of a majority in aggregate principal amount of the Outstanding Securities of each series, each voting as a class, shall constitute a Senior Preferential Payment.

"Senior Secured Debt" means (i) all obligations of the Company incurred under the Revolving Facility (and including the Collateral Securities issued pursuant to the Second Supplemental Indenture), (ii) the Securities issued pursuant to the First Supplemental Indenture and (iii) any Permitted Additional Senior Secured Debt, all of which Permitted Additional Senior Secured Debt shall be issued in the form of Debt Securities or shall be secured by Collateral Securities under this Indenture.

"Senior Secured Debt Agreements" means (if in addition to this Indenture) those agreements between the Company and the holders of Senior Secured Debt governing the issuance of such Senior Secured Debt of the Company that will have the benefit of this Indenture (which shall mean (i) with respect to the Securities issued pursuant to the First Supplemental Indenture hereto, the Note Agreement, and (ii) with respect to the Securities issued pursuant to the Second Supplemental Indenture hereto, the document referred to in clause (i) of the definition of Revolving Facility).

"Special Event of Default" shall mean (a) the commencement of a Bankruptcy Proceeding with respect to the Company, (b) the acceleration of any series of Securities or Other Senior Secured Debt Securities or (c) any default in the payment of any amount of principal, interest or premium due under any Financing Agreement or Senior Secured Debt Agreement; provided, in the case of any event described in clause (c) hereof, that such event (i) shall have continued for any grace period specified in the applicable Financing Agreement or Senior Secured Debt Agreement and (ii) shall have been described in a notice substantially in the form of Exhibit C hereto delivered by one or more Holders to the Trustee.

"Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307.

"Special Trust Account" shall mean an interest bearing restricted trust account maintained by the Trustee for the purpose of receiving and holding Senior Preferential Payments.

"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 or interest on such Security, or such installment of principal or interest, is due and payable.

"Successor Corporation" has the meaning specified in Section 1101.

"Synthetic Leases" means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product, where such transaction is considered debt for borrowed money for tax purposes but is classified as an operating lease in accordance with GAAP.

"Taken" means any circumstance or event in consequence of which the Transmission System or any substantial portion thereof shall be condemned, nationalized, seized, compulsorily acquired or otherwise expropriated by any Governmental Authority under power of eminent domain or otherwise. The terms "Taken" or "Taking" shall have a correlative meaning.

"Total Loss" means (a) a total or constructive total loss of a substantial portion of the Transmission System as a result of an Event of Loss or (b) a substantial portion of the Transmission System is Taken.

"Tranche" means a group of Securities which (a) are of the same series and
(b) have identical terms except as to principal amount, date of issuance and/or first Interest Payment Date.

"Transmission Documents" means (i) the Network Integration Transmission Service Agreement, (ii) the Easement Agreement, (iii) the Agreement of Transmission Facilities Owners to Organize the Midwest Independent Transmission System Operator, Inc., a Delaware Non-Stock Organization, on file and accepted by the FERC, as it may be amended from time to time, including specific amendments or agreements between the Company and MISO and the Company and the transmission owners and members of MISO, (iv) the April 29, 2002 Amendment and Restatement of the Distribution-Transmission Interconnection Agreement, dated as of April 1, 2001, between the Company and Consumers, (v) the April 29, 2002 Amendment and Restatement of the Generation Interconnection Agreement, dated as of April 1, 2001, between the Company and Consumers, (vi) the April 29, 2002 Amendment and Restatement of the Purchase and Sale Agreement for Ancillary Services, dated as of April 1, 2001, between the Company and Consumers, (vii) the April 29, 2002 Amendment and Restatement of the Operating Agreement, dated as of April 1, 2001, between the Company and Consumers, (viii) the April 29, 2002 Amendment and Restatement of the Network Operating Agreement, dated as of April 1, 2001 between the Company and Consumers, (ix) the Amended and Restated Service Contract, dated as of April 29, 2002, between the Company and Consumers,
(x) the Non-Competition Agreement, dated as of May 1, 2002, between Consumers, the Company, and Holdco, and (xi) the Amended and Restated Management Services Agreement, dated as of March 11, 2003, by and between the Company and Trans-Elect, Inc.

"Transmission System" means the transmission lines and towers; substations; distribution substations; switching stations and substations; circuit breakers; and all such other necessary facilities used for providing transmission service; in each case, owned by the Company.

"Trigger Event" means (i) in case of the occurrence of an Event of Default specified in Section 801(a) or (b), an Act of Holders of a majority in principal amount of Outstanding Securities of any series declaring that a "Trigger Event" has occurred, or (ii) in case of the occurrence of any Event of Default, an Act of Holders of a majority in principal amount of Outstanding Securities of all series declaring that a "Trigger Event" has occurred. A Trigger Event shall be deemed to have occurred automatically (to the extent permitted by any applicable law) and without any Act of Holders in the case of the occurrence of an Event of Default specified in Section 801(c) or (d). A Trigger Event shall cease to exist if and when the Event(s) of Default upon which such Trigger Event is based is (or are) cured or waived in accordance with the provisions of this Indenture.

"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is

amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

"Trustee" means the Person named as the "Trustee" in the first paragraph of this Indenture 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 the Securities of that series.

"Uniform Commercial Code" means, unless otherwise noted, the Uniform Commercial Code as from time to time in effect in the State of New York.

"United States" means the United States of America.

"Unused Excess Proceeds" has the meaning specified in Section 501(a).

SECTION 102. Compliance Certificates and Opinions.

Subject to Section 107, upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act with respect to indentures qualified thereunder. Each such certificate or opinion shall be given in the form of an Officer's Certificate, if to be given by an Authorized Officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.

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

(1) a statement that each Person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(2) 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;

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

(4) a statement as to whether, in the opinion of each such Person, such condition or covenant has been complied with.

SECTION 103. Content and Form of Documents Delivered to Trustee.

Whenever 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 and covered by the opinion of, only one such Person, or that they be so certified or covered by 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 of the Company 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 Opinion of Counsel may be based, insofar as it relates to factual matters, upon the 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 the matters upon which his or her opinion is based are erroneous. Any Opinion of Counsel delivered hereunder may contain standard and customary exceptions and qualifications.

Wherever in the Indenture, in connection with any application or certificate or report to the Trustee, it is provided that the Company shall deliver any document as a condition of the granting of such application, or as evidence of the Company's compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Company to have such application granted or to the sufficiency of such certificate or report.

SECTION 104. Acts of Holders; Record Dates.

Any request, demand, authorization, direction, notice, consent, election, waiver or other action provided or permitted by this Indenture to be given, made 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 an agent duly appointed in writing; or, alternatively, may be embodied in and evidenced by the record of Holders voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders duly called and held in accordance with the provisions of Article Thirteen, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments and so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 901) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 104. The record of any meeting of Holders shall be proved in the manner provided in Section 1306.

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 acknowledgements of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof or 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 be proved in any other manner which the Trustee and the Company deem sufficient.

The ownership of Securities shall be proved by the Security Register.

Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of a Holder 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.

The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, election, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in
Section 106.

The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any notice of a Default or an Event of Default, (ii) any declaration of acceleration referred to in Section 802, (iii) any request to institute proceedings referred to in Section 811 or (iv) any direction referred to in Section 816, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company's expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 106.

With respect to any record date set pursuant to this Section 104, the party hereto which sets such record date may designate any day as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section 104, the party hereto which set such record date shall be deemed to have initially designated

the one hundred eightieth (180th) day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the one hundred eightieth (180th) day after the applicable record date.

Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.

SECTION 105. Notices, Etc., to Trustee and Company.

Except as otherwise provided herein, any request, demand, authorization, direction, notice, consent, election, 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

(1) 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 at its Corporate Trust Office, Attention: Institutional Trust Services, or

(2) 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 the attention of the Treasurer of the Company at the address of the Company's principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company.

SECTION 106. Notice to Holders; Waiver.

Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein 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 (if any), and not earlier than the earliest date (if any), 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. Where this Indenture 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 otherwise to be specified therein, 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.

SECTION 107. Conflict with Trust Indenture Act.

Except with respect to Section 314 (other than Sections 314(c) and (e)) or
Section 311 of the Trust Indenture Act (in either case, which the Company or the Trustee, as the case may be, need not comply with) and except as provided in the last sentence of Section 908, if any provision of this Indenture limits, qualifies or conflicts with a provision of the Trust Indenture Act which would be required under the Trust Indenture Act to be a part of and govern this Indenture if this Indenture were

qualified thereunder, the provision of the Trust Indenture Act shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the provision of the Trust Indenture Act shall be deemed to apply to this Indenture as so modified or excluded, as the case may be.

SECTION 108. 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 109. 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 110. 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 111. 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 112. Governing Law.

This Indenture and the Securities shall be governed by and construed in accordance with the law of the State of New York (including, without limitation,
Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent that the Trust Indenture Act shall be applicable and except that the law of any jurisdiction wherein any portion of the Mortgaged Property that is Real Property is located shall govern the creation of a mortgage lien on and security interest in, or perfection, priority or enforcement of the Lien of this Indenture or exercise of remedies with respect to, such portion of the Mortgaged Property.

SECTION 113. 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 (other than a provision of any Security that contains provisions different from this Section 113)) 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 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, and no additional interest shall accrue as the result of such delayed payment.

SECTION 114. Investment of Cash Held by Trustee.

Any cash held by the Trustee or any Paying Agent under any provision of this Indenture shall, except as otherwise provided in Article Seven, at the request of the Company as evidenced by a Company Order, be invested or reinvested in specified Cash Equivalents selected by the Company (unless an Event of Default has occurred and is continuing, in which case such Cash Equivalents shall be selected by the Trustee), and any interest on such Cash Equivalents shall be held in trust for the benefit of the Holders as part of the Mortgaged Property. Any such Cash Equivalents may be liquidated, presented for redemption or otherwise disposed of at the request of the Company as evidenced by a Company Order (unless an Event of Default has occurred and is continuing, in which case such Cash Equivalents may be liquidated, presented for redemption or otherwise disposed of at the direction of the Trustee). The Trustee shall not be liable for any loss incurred in connection with any investment, reinvestment, liquidation, presentment for redemption or disposition of any Cash Equivalent made in accordance with this Section 114.

SECTION 115. Execution of Other Documents; Conflicts; Agreement of Holders.

All rights, powers and remedies available to the Trustee and all Holders of Securities (whether Debt Securities or Collateral Securities), with respect to the Mortgaged Property, shall be subject to this Indenture, and no Holder of any Securities may take any actions with respect to the Mortgaged Property which violate the provisions of this Indenture. In the event of any conflict or inconsistency between the terms and provisions of this Indenture and the terms and provisions of any Senior Secured Debt Agreement relating to the Mortgaged Property, the terms and provisions of this Indenture shall govern and control. As a condition to the issuance of any Securities to a Holder, such Holder (including the beneficial owner of such Securities) shall, in its respective Senior Secured Debt Agreement, and the Company shall cause each such Holder to, acknowledge this Section 115 and Sections 816, 821, 822 and 823 and agree to abide by those provisions and comply with them. The Company shall further cause each such Holder of Securities, in its respective Senior Secured Debt Agreement, to agree to directly abide by all applicable provisions of this Indenture.

ARTICLE TWO.

SECURITY FORMS

SECTION 201. Forms Generally.

The definitive Securities of each series shall be in substantially the form or forms established in the indenture supplemental hereto establishing such series, or in a Company Resolution establishing such series, or in an Officer's Certificate pursuant to such a supplemental indenture or Company Resolution, in any 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 applicable tax laws or the rules of any securities exchange or automated quotation system on which the Securities of such series may be listed or traded or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Company 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 401 for the authentication and delivery of such Securities.

The Securities of each series shall be issuable in registered form without coupons. The definitive Securities of each series shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods, or if required by any securities exchange or automated quotation system on which the Securities of such series may be listed or traded, on steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange or automated quotation system on which the Securities of such series may be listed or traded, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.

SECTION 202. Form of Trustee's Certificate of Authentication.

The Trustee's certificate of authentication shall be in substantially the following form:

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

JPMorgan Chase Bank, as Trustee

Date of Authentication:                 By:
                        ------------        ------------------------------------
                                            Authorized Officer

ARTICLE THREE.

THE SECURITIES

SECTION 301. Amount Unlimited; Issuable in Series.

Subject to the terms of any particular series of Securities as contemplated by this Section 301, the aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

The Securities may be issued in one or more series each of which may be issued in Tranches. Subject to the penultimate paragraph of this Section, prior to the authentication and delivery of Securities of any series there shall be established by specification in a supplemental indenture or in a Company Resolution, or in an Officer's Certificate pursuant to a supplemental indenture or a Company Resolution:

(1) the title of the Securities of such series (which shall distinguish the Securities of such series from Securities of all other series) and whether such Securities are Debt Securities or Collateral Securities and, if such Securities are Collateral Securities, an executed copy of the Senior Secured Debt Agreement relating to such Collateral Security shall be attached thereto;

(2) any limit upon the aggregate principal amount of the Securities of such 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 such series pursuant to Section 304, 305, 306, 507 or 1206 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder);

(3) the Persons (without specific identification) to whom interest on Securities of such series, or any Tranche thereof, shall be payable on any Interest Payment Date, if other than the Persons in whose names such Securities (or one or more Predecessor Securities) are registered at the close of business on the Regular Record Date for such interest;

(4) the date or dates on which the principal of the Securities of such series, or any Tranche thereof, is payable or any formulary or other method or other means by which such date or dates shall be determined, by reference to an index or other fact or event ascertainable outside of this Indenture or otherwise (without regard to any provisions for redemption, prepayment, acceleration, purchase or extension);

(5) the rate or rates at which the Securities of such series, or any Tranche thereof, shall bear interest, if any (including the rate or rates at which overdue principal shall bear interest, if different from the rate or rates at which such Securities shall bear interest prior to Maturity, and, if applicable, the rate or rates at which overdue premium or interest shall bear interest, if any), or any formulary or other method or other means by which such rate or rates shall be determined, by reference to an index or indices or other facts or events ascertainable outside of this Indenture or otherwise; the date or dates from which such interest shall accrue or any formula or other method or means (including by reference to facts or events ascertainable outside this Indenture) by which such date or dates shall be determined; the Interest Payment Dates on which such interest shall be payable and the Regular Record Date, if any, for the interest payable on such Securities on any Interest Payment Date; and the basis of computation of interest, if other than as provided in Section 310;

(6) the place or places at which and/or the methods (if other than as provided elsewhere in this Indenture) by which (i) the principal of and premium, if any, and interest, if any, on Securities of such series, or any Tranche thereof, shall be payable, (ii) registration of transfer of Securities of such series, or any Tranche thereof, may be effected, (iii) exchanges of Securities of such series, or any Tranche thereof, may be effected and (iv) notices and demands to or upon the Company in respect of the Securities of such series, or any Tranche thereof, and this Indenture may be served; the Security Registrar (if other than the Trustee) and any Paying Agent or Agents (if other than the Trustee) for such series or Tranche; and, if such is the case, that the principal of such Securities shall be payable without the presentment or surrender thereof; provided that such method of payment shall be administratively acceptable to the Trustee;

(7) the period or periods within which or the date or dates on which, the price or prices at which and the terms and conditions upon which the Securities of such series, or any Tranche thereof, may be redeemed, in whole or in part, at the option of the Company;

(8) the obligation or obligations, if any, of the Company to redeem or purchase the Securities of such series, or any Tranche thereof, pursuant to any sinking fund or other mandatory redemption provisions or any other analogous provisions or at the option of a Holder thereof and the period or periods within which or the date or dates on which, the price or prices at which and the terms and conditions upon which such Securities shall be redeemed or purchased, in whole or in part, pursuant to such obligation, and applicable exceptions to the requirements of Section 504 in the case of mandatory redemption or redemption at the option of the Holder;

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

(10) that all Securities shall be denominated and payable in Dollars;

(11) if the principal of or premium, if any, or interest, if any, on the Securities of such series, or any Tranche thereof, are to be payable, or are to be payable at the election of the Company or a Holder thereof, in securities or other property, the type and amount of such securities or other property, or the formulary or other method or other means by which such amount shall be determined, and the period or periods within which, and the terms and conditions upon which, any such election may be made; it being understood that all calculations under this Indenture shall be made on the basis of the fair market value of such securities or the fair value of such other property, in either case determined as of the most recent practicable date, except that, in the case of any amount of principal or interest that may be so payable at the election of the Company or a Holder, if such election shall not yet have been made, such calculations shall be made on the basis of the amount of principal or interest, as the case may be, that would be payable if no such election were made;

(12) if the amount payable in respect of principal of or premium, if any, or interest, if any, on the Securities of such series, or any Tranche thereof, may be determined with reference to an index or indices or other facts or events ascertainable outside of this Indenture, the manner in which such amounts shall be determined (to the extent not established pursuant to clause
(5) of this paragraph);

(13) if other than the principal amount thereof, the portion of the principal amount of Securities of such series, or any Tranche thereof, which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 802;

(14) the terms, if any, pursuant to which the Securities of such series, or any Tranche thereof, may be converted into or exchanged for Capital Stock or other securities of the Company or any other Person;

(15) if the Securities of such series, or any Tranche thereof, are to be issued in global form, (i) any limitations on the rights of the Holder or Holders of such Securities to transfer or exchange the same or to obtain the registration of transfer thereof, (ii) any limitations on the rights of the Holder or Holders thereof to obtain certificates therefor in definitive form in lieu of temporary form and (iii) any and all other matters incidental to such Securities;

(16) if the Securities of such series, or any Tranche thereof, are to be issuable as bearer securities, any and all matters incidental thereto which are not specifically addressed in a supplemental indenture as contemplated by clause (4) of Section 1201;

(17) to the extent not established pursuant to clause (15) of this paragraph, any limitations on the rights of the Holders of the Securities of such series, or any Tranche thereof, to transfer or exchange such Securities or to obtain the registration of transfer thereof; and if a service charge will be made for the registration of transfer or exchange of Securities of such series, or any Tranche thereof, the amount or terms thereof;

(18) any exceptions to Section 113, or variation in the definition of Business Day, with respect to the Securities of such series, or any Tranche thereof;

(19) the terms of any sinking, improvement, maintenance, replacement or analogous fund for any series;

(20) any provisions permitted by this Indenture relating to covenants of the Company with respect to the Securities of such series in addition to those set forth in this Indenture;

(21) the Events of Default, in addition to those set forth in Section 801, with respect to the Securities of such series and whether each Holder of Securities of such series shall have the right to declare the principal amount of such Securities held by it to be due and payable immediately pursuant to
Section 802; and

(22) any other terms of the Securities of such series, or any Tranche thereof.

With respect to Securities of a series subject to a Periodic Offering, the indenture supplemental hereto or the Company Resolution which establishes such series, or the Officer's Certificate pursuant to such supplemental indenture or Company Resolution, as the case may be, may provide general terms or parameters for Securities of such series and provide either that the specific terms of Securities of such series, or any Tranche thereof, shall be specified in a Company Order or that such terms shall be determined by the Company or its agents in accordance with procedures specified in a Company Order as contemplated by clause (2) of Section 401.

Anything herein to the contrary notwithstanding, the Trustee shall be under no obligation to authenticate and deliver Securities of any series the terms of which, established as contemplated by this Section 301, would affect the rights, duties, obligations, liabilities or immunities of the Trustee under this Indenture or otherwise.

Notwithstanding Section 301(2) and unless otherwise expressly provided with respect to a series of Securities, the aggregate principal amount of a series of Securities may be increased and additional Securities of such series may be issued up to the maximum aggregate principal amount authorized with respect to such series as increased without the consent of the Holders of such series of Securities.

SECTION 302. Denominations.

Unless otherwise provided as contemplated by Section 301 with respect to any series of Securities, or any Tranche thereof, the Securities of each series shall be issuable in denominations of One Thousand Dollars ($1,000) and any integral multiple thereof.

SECTION 303. Execution, Authentication, Delivery and Dating.

The Securities shall be executed on behalf of the Company by an Authorized Officer. The signature of any such officer on the Securities may be manual or facsimile.

Securities bearing the manual or facsimile signatures of individuals who were at the time of execution the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any one 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.

Unless otherwise specified as contemplated by Section 301 with respect to any series of Securities, or any Tranche thereof, each Security shall be dated the date of its authentication.

Unless otherwise specified as contemplated by Section 301 with respect to any series of Securities, or any Tranche thereof, 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 the manual signature of one of its authorized officers, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if (a) any Security shall have been authenticated and delivered hereunder to the Company, or

any Person acting on its behalf, but shall never have been issued and sold by the Company, (b) the Company shall deliver such Security to the Security Registrar for cancellation or shall cancel such Security and deliver evidence of such cancellation to the Trustee, in each case as provided in Section 309, and
(c) the Company, at its election, shall deliver to the Trustee a written statement (which need not comply with Section 102 and need not be accompanied by an Officer's Certificate or an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, then, for all purposes of this Indenture, such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits hereof.

SECTION 304. Temporary Securities.

Pending the preparation of definitive Securities of any series, or any Tranche thereof, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities of such series 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.

Except as otherwise specified as contemplated by Section 301 with respect to the Securities of any series, or any Tranche thereof, after the preparation of definitive Securities of such series or Tranche, the temporary Securities of such series or Tranche shall be exchangeable, without charge to the Holder thereof, for definitive Securities of such series or Tranche upon surrender of such temporary Securities at the office or agency of the Company maintained pursuant to Section 602 in a Place of Payment for such Securities. Upon such surrender of temporary Securities, the Company shall, except as aforesaid, execute and the Trustee shall authenticate and deliver in exchange therefor definitive Securities of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount.

SECTION 305. Registration, Registration of Transfer and Exchange.

The Company shall cause to be kept, with respect to the Securities of each series, or any Tranche thereof, 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 of such series or Tranche and the registration of transfer thereof. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. If any indenture supplemental hereto refers to any transfer agents (in addition to the Security Registrar) initially designated by the Company with respect to any series of Securities, the Company may at any time rescind the designation of any such transfer agent or approve a change in the location through which such transfer agent acts, provided that the Company maintains a transfer agent in each Place of Payment for such series. The Company may at any time designate additional transfer agents with respect to the Securities of any series, or any Tranche thereof.

Upon surrender for registration of transfer of any Security of such series or Tranche at the office or agency of the Company in a Place of Payment for such series or Tranche, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount.

Except as otherwise specified as contemplated by Section 301 with respect to the Securities of any series, or any Tranche thereof, any Security of such series or Tranche may be exchanged at the option of the Holder, for one or more new Securities of the same series and Tranche, of authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at any such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.

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, the Trustee or the Security Registrar) be duly endorsed or shall be accompanied by a written instrument of transfer in form satisfactory to the Company, the Trustee or the Security Registrar, as the case may be, duly executed by the Holder thereof or his attorney duly authorized in writing.

Unless otherwise specified as contemplated by Section 301 with respect to Securities of any series, or any Tranche thereof, 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 304, 507 or 1206 not involving any transfer.

Neither the Trustee nor the Company shall be required, pursuant to the provisions of this Section 305, (A) to issue, register the transfer of or exchange any Securities of any series (or of any Tranche thereof) during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice of redemption of any such Securities of such series or Tranche selected for redemption under Section 503 and ending at the close of business on the day of such mailing, or (B) to register the transfer of or exchange any Security so selected for redemption, in whole or in part, except, in the case of any Security to be redeemed in part, any portion not to be redeemed.

SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.

If any mutilated Security is surrendered to the Trustee together with such security or indemnity as may be required by the Company or the Trustee to save each of them and any agent of either of them harmless, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and Tranche, and of like tenor and principal amount and bearing a number not contemporaneously outstanding and shall cancel and dispose of such mutilated Security in accordance with Section 309.

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 is held by a Person purporting to be the owner of such Security, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and Tranche, and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If, after the delivery of such new Security, a Protected Purchaser of the original Security in lieu of which such new Security was issued presents for payment or registration such original Security, the Trustee shall be entitled to recover

such new Security from the party to whom it was delivered or any party taking therefrom, except a Protected Purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Company and the Trustee in connection therewith and shall cancel and dispose of such new Security in accordance with Section 309.

In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable within thirty (30) days, the Company in its discretion may, instead of issuing a new Security, pay such Security.

The Trustee shall not be obligated to authenticate any Security under this
Section 306 unless the Company shall have paid sums sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the reasonable fees and expenses of the Trustee, its agents and counsel) connected therewith.

Every new Security of any series issued pursuant to this Section 306 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.

Any indemnity that may be required by the Company or the Trustee pursuant to this Section 306 shall be an unsecured indemnity if such indemnity is requested from a Holder that is an insurance company or a financial institution.

The provisions of this Section 306 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 307. Payment of Interest; Interest Rights Preserved.

Except as otherwise provided as contemplated by Section 301 with respect to the Securities of any series, or any Tranche thereof, 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 in respect of Securities of such series, or any Tranche thereof, except that, unless otherwise provided in the Securities of such series, or any Tranche thereof, as contemplated by Section 301 interest payable on the Maturity of the principal of a Security shall be paid to the Person to whom principal is paid. The initial payment of interest on any Security of any series which is issued between a Regular Record Date and the related Interest Payment Date shall be payable as provided in such Security or as contemplated by Section 301 with respect to the related series of Securities. Except in the case of a Security in global form, interest on any series of Securities may be paid (i) by check mailed to the address of the Person entitled thereto as it shall appear on the Security Register of such series or (ii) by wire transfer in immediately available funds at such place and to such account as designated in writing to the Paying Agent (at least 15 days prior to the related Interest Payment Date) by the Person entitled thereto as specified in the Security Register of such series (such designation to control with respect to all interest payments to such Person, unless otherwise directed by such Person).

Unless otherwise provided as contemplated by Section 301 with respect to any series of Securities, with respect to any Collateral Security, interest thereon shall be deemed to be automatically paid solely to the extent that any payment of interest is made on the corresponding Other Senior Secured Debt Security with respect to which such Collateral Security was issued pursuant to the terms of the

Senior Secured Debt Agreement governing such Other Senior Secured Debt Security. The Trustee shall be entitled to conclusively assume that such payment of interest on the corresponding Other Senior Secured Debt Security has been made unless notified to the contrary by such Person or Persons as shall be designated for such purpose in or with respect to such Collateral Security.

The initial Paying Agent will be the Trustee. The Company may at any time designate additional Paying Agents or rescind the designation of any Paying Agent; however, the Company at all times will be required to maintain a Paying Agent in each Place of Payment for each series of Securities.

Unless otherwise provided as contemplated by Section 301 with respect to any series of Securities, any interest on any Security of any series which is payable, but is not timely paid or duly provided for, on any Interest Payment Date for Securities of such series (herein called "Defaulted Interest") shall forthwith cease to be payable to the registered 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 in respect of which interest is in default (or their respective Predecessor Securities) are registered at the close of business on a date (herein called 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 provided in this clause (1). Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than fifteen (15) days and not less than ten (10) days prior to the date of the proposed payment and not less than ten (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 given to each Holder of Securities of such series in the manner set forth in Section 106, not less than ten (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 or automated quotation system on which such Securities may be listed, traded or quoted, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section 307, 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 308. Persons Deemed Owners.

The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name any Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and premium, if any, and (subject to Section 307) interest, if any, 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.

SECTION 309. Cancellation.

All Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly canceled 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 may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section 309, except as expressly permitted by this Indenture. All canceled Securities held by the Trustee shall be treated in accordance with the Trustee's document retention policies.

SECTION 310. Computation of Interest; Usury Not Intended.

Except as otherwise specified as contemplated by Section 301 for Securities of any series, or any Tranche thereof, interest on the Securities of each series, or any Tranche thereof, shall be computed on the basis of a three hundred sixty (360) day year of twelve (12) thirty (30) day months and interest on the Securities of each series, or any Tranche thereof, for any partial period shall be computed on the basis of a three hundred sixty (360) day year of twelve
(12) thirty (30) day months and the actual number of days elapsed in any partial month.

The amount of interest (or amounts deemed to be interest under applicable law) payable or paid on any Security shall be limited to an amount which shall not exceed the maximum nonusurious rate of interest allowed by the applicable laws of the State of New York or any applicable law of the United States or any state thereof permitting a higher maximum nonusurious rate that preempts such applicable New York laws, which could lawfully be contracted for, taken, reserved, charged or received (the "Maximum Interest Rate"). If, as a result of any circumstances whatsoever, the Company or any other Person is deemed to have paid interest (or amounts deemed to be interest under applicable law) or any Holder is deemed to have contracted for, taken, reserved, charged or received interest (or amounts deemed to be interest under applicable law), in excess of the Maximum Interest Rate, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of validity, and if from any such circumstance, the Trustee, acting on behalf of the Holders, or any Holder shall ever receive interest or anything that might be deemed interest under applicable law that would exceed the Maximum Interest Rate, such amount that would be excessive interest shall be applied to the reduction of the principal amount owing on the applicable Security or Securities and not to the payment of interest, or if such excessive interest exceeds the unpaid principal balance of any such Security or Securities, such excess shall be refunded to the Company. In addition, for purposes of determining whether payments in respect of any Security are usurious, all sums paid or agreed to be paid with respect to such Security for the use, forbearance or detention of money shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such Security. In administering the provisions of this paragraph, the Trustee shall be entitled to rely on an Officer's Certificate and an Opinion of Counsel.

SECTION 311. CUSIP Numbers.

The Company in issuing the Securities may use "CUSIP", "private placement" or other similar numbers (if then generally in use), and, if so, the Trustee or Security Registrar may use "CUSIP", "private placement" or such other numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, in which case none of the Company or, as the case may be, the Trustee or the Security Registrar, or any agent of any of them, shall have any liability in respect of any CUSIP, "private placement" or such other number used on any such notice, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee in writing of any change in any such "CUSIP," "private placement" or such other numbers.

ARTICLE FOUR.

ISSUANCE OF SECURITIES

SECTION 401. General.

Subject to Section 402 and, except as may be otherwise specified as contemplated by Section 301 for Securities of any series, or any Tranche thereof, the Trustee shall authenticate and deliver Securities of a series, for original issue, at one time or from time to time in accordance with the Company Order referred to below, upon receipt by the Trustee of:

(1) the instrument or instruments establishing the form or forms and terms of such series, as provided in Sections 201 and 301;

(2) a Company Order requesting the authentication and delivery of such Securities and, to the extent that the terms of such Securities shall not have been established in an indenture supplemental hereto or in a Company Resolution, or in an Officer's Certificate pursuant to a supplemental indenture or Company Resolution, all as contemplated by Section 301, either (i) establishing such terms or (ii) in the case of Securities of a series subject to a Periodic Offering, specifying procedures, acceptable to the Trustee, by which such terms are to be established (which procedures may provide for authentication and delivery pursuant to oral or electronic instructions from the Company or any agent or agents thereof, which oral or electronic instructions are to be promptly confirmed in writing), in either case in accordance with the instrument or instruments delivered pursuant to clause (1) above;

(3) the Securities of such series, executed on behalf of the Company by an Authorized Officer;

(4) an Opinion of Counsel to the effect that:

(a) the form or forms of such Securities have been duly authorized by the Company and have been established in conformity with the provisions of this Indenture;

(b) the terms of such Securities have been duly authorized by the Company and have been established in conformity with the provisions of this Indenture; and

(c) when such Securities shall have been authenticated and delivered by the Trustee and issued and delivered by the Company in the manner specified in such Opinion of Counsel, such Securities will constitute valid and legally binding obligations of the Company, enforceable against the Company (subject to customary exceptions) and entitled to the benefit of the Lien of this Indenture equally and ratably with all other Securities then Outstanding;

provided, however, that, with respect to Securities of a series subject to a Periodic Offering, the Trustee shall be entitled to receive such Opinion of Counsel only once at or prior to the time of the first authentication and delivery of such Securities (provided that such Opinion of Counsel addresses the authentication and delivery of all such Securities) and that, in lieu of the opinions described in clauses (b) and (c) above, counsel may opine that:

(X) when the terms of such Securities shall have been established pursuant to a Company Order or Orders or pursuant to such procedures as may be specified from time to time by a Company Order or Orders, all as contemplated by and in accordance with the instrument or instruments delivered pursuant to clause (1) above, such terms will have been duly authorized by the Company and will have been established in conformity with the provisions of this Indenture; and

(Y) when such Securities shall have been authenticated and delivered by the Trustee in accordance with this Indenture and the Company Order or Orders or the specified procedures referred to in paragraph (X) above and issued and delivered by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, such Securities will constitute valid and legally binding obligations of the Company, enforceable against the Company (subject to customary exceptions) and entitled to the benefit of the Lien of this Indenture equally and ratably with all other Securities then Outstanding; and

(5) an Officer's Certificate to the effect that, no Default or Event of Default has occurred and is continuing, including a computation of any financial covenants and any other covenants requiring computation contained in the Indenture showing compliance therewith as of the requisite time periods required by such covenants; provided, however, that with respect to Securities of a series subject to a Periodic Offering, either (i) such an Officer's Certificate shall be delivered at the time of the authentication and delivery of each Security of such series or (ii) the Officer's Certificate delivered at or prior to the time of the first authentication and delivery of the Securities of such series shall state that the statements therein shall be deemed to be made at the time of each, or each subsequent, authentication and delivery of Securities of such series.

With respect to Securities of a series subject to a Periodic Offering, the Trustee may conclusively rely, as to the authorization by the Company of any of such Securities, the forms and terms thereof, the validity thereof and the compliance of the authentication and delivery thereof with the terms and conditions of this Indenture, upon the Opinion or Opinions of Counsel and the certificates and other documents delivered pursuant to this Article Four at or prior to the time of the first authentication and delivery of Securities of such series until any of such opinions, certificates or other documents have been superseded or revoked or expire by their terms. In connection with the authentication and delivery of Securities of a series subject to a Periodic Offering, the Trustee shall be entitled to assume that the Company's instructions to authenticate and deliver such Securities do not violate any applicable law or any applicable rule, regulation or order of any Governmental Authority having jurisdiction over the Company.

SECTION 402. Limitation on Issuances.

Notwithstanding anything herein to the contrary, as long as any Securities issued pursuant to the First Supplemental Indenture are Outstanding, the Company may not issue any Securities pursuant to Section 401 hereof unless the Company is, at the time of and immediately after such issuance, in compliance with the covenant set forth in Section 3.02(e) of the First Supplemental Indenture.

ARTICLE FIVE.

REDEMPTION OF SECURITIES

SECTION 501. Applicability of Article.

(a) Except as may be otherwise specified as contemplated by Section 301 for Securities of any series, or any Tranche thereof, in the event that any one or more Events of Loss shall occur during any consecutive twelve (12) month period with respect to which the Company receives an aggregate amount of Loss Proceeds in excess of $5,000,000, and the Company does not use the entire amount of such Loss Proceeds to rebuild or restore the Transmission System or otherwise render the Transmission System fit for normal use (or which the Company does not allocate to a firm, good faith contractual commitment in the ordinary course of business (not subject to any conditions in the Company's control) so to rebuild or restore) (any portion of such aggregate amount of Loss Proceeds not so used or allocated, the "Unused Excess Proceeds"), the Company shall (i) redeem, on the Redemption Date to be determined by the Company (which date shall be a date within (9) months of the date on which the last of such Loss Proceeds are received by or on behalf of the Company), Outstanding Securities of each series entitled to such redemption in an amount equal to the Pro Rata Portion of such series of the Unused Excess Proceeds (which Pro Rata Portion shall be calculated by the Company as of the date on which the Company notifies the Trustee of such Redemption Date in accordance with Section 502), in whole or in part, as the case may be, (on a pro rata basis, based on the principal amount of each Outstanding Security of such series, with such adjustments as shall be necessary so that only Securities in authorized denominations shall be redeemed) at a Redemption Price equal to the unpaid principal thereof and (ii) pay all interest accrued and unpaid to the Redemption Date on the Securities so redeemed; provided that if any portion of such Loss Proceeds allocated to any such firm commitment or a replacement commitment so to rebuild or restore the Transmission System (which firm commitment or replacement commitment shall have been entered into prior to the end of the original nine (9) month period referenced above) is not reinvested pursuant to such commitment within six (6) months of the end of the original nine (9) month period, such uninvested portion of such Loss Proceeds so allocated shall be used to redeem each series of Outstanding Securities in the manner set forth above on a date not later than the last day of such six-month period.

(b) In addition to the provisions of Section 501(a), Securities of any series, or any Tranche thereof, which are otherwise redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of such series or Tranche) in accordance with this Article.

SECTION 502. Election to Redeem; Notice to Trustee.

Any election of the Company to redeem any Securities shall be evidenced by a Company Resolution or in another manner specified as contemplated by Section 301 for such Securities. In case of any redemption of any Securities pursuant to
Section 501(a) or pursuant to Section 501(b), the Company shall, if such redemption is made (i) pursuant to Section 501(a), not less than forty (40) days nor more than sixty (60) days prior to the Redemption Date fixed by the Company or (ii) pursuant to

Section 501(b), not less than forty-five (45) nor more than sixty (60) 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, of the principal amount of Securities of such series, or any Tranche thereof, to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities (a) prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, or (b) pursuant to an election of the Company which is subject to a condition specified in the terms of such Securities, or that is otherwise subject to such condition, the Company shall furnish the Trustee with an Officer's Certificate and an Opinion of Counsel evidencing compliance with such restriction or condition.

SECTION 503. Selection by Trustee of Securities to Be Redeemed.

Other than any redemption of Securities pursuant to Section 501(a), if less than all the Securities of any series, or any Tranche thereof, are to be redeemed (unless all the Securities of such series or Tranche and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than sixty (60) days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series, or any Tranche thereof, not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, or any Tranche thereof, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such series, or any Tranche thereof, and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than sixty (60) days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series, or any Tranche thereof, and specified tenor not previously called for redemption in accordance with the preceding sentence.

The Trustee shall promptly notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed.

The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of 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. If the Company shall so direct, Securities registered in the name of the Company or any Affiliate thereof shall not be included in the Securities selected for redemption.

SECTION 504. Notice of Redemption.

Except as may be otherwise specified as contemplated by Section 301 for Securities of any series, or any Tranche thereof, notice of redemption shall be given in the manner provided in Section 106 not less than thirty (30) nor more than sixty (60) days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register; provided, however, if such redemption is made pursuant to Section 501(a), such notice of redemption shall be given in the

manner provided in Section 106 not less than twenty-five (25) nor more than (60) days prior to the Redemption Date.

With respect to Securities of each series, or any Tranche thereof, to be redeemed, each notice of redemption shall identify the Securities to be redeemed (including CUSIP, "private placement" or similar numbers) and shall state:

(1) the Redemption Date;

(2) the Redemption Price, or if not then ascertainable, the manner of calculation thereof;

(3) if less than all the Outstanding Securities of any series, or any Tranche thereof, consisting of more than a single Security are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series, or any Tranche thereof, consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed;

(4) that on the Redemption Date, the Redemption Price, together with accrued interest, if any, to the Redemption Date, 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 and accrued interest, if any, unless it shall have been specified as contemplated by Section 301 with respect to such Securities that such surrender shall not be required;

(6) that the redemption is for a sinking fund, if such is the case; and

(7) such other matters as the Company shall deem desirable or appropriate.

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 and, subject to the preceding paragraph, shall be irrevocable. The notice if mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, a failure to give such notice by mail or any defect in the notice to the Holder of any Security designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security.

SECTION 505. Deposit of Redemption Price.

On or before the Redemption Date specified in the notice of redemption given as provided in Section 504 (but in any event at or prior to 10:00 a.m. New York City time on the applicable Redemption Date), the Company shall deposit with the Trustee or with a Paying Agent an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date with respect to which interest shall be payable to the Holders as of the immediately preceding Regular Record Date) accrued interest on, all the Securities which are to be redeemed on that date.

SECTION 506. Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid the Securities or portions thereof 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, if any, such Securities or portions thereof, if interest bearing, shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with such notice, such Security or portion thereof shall be paid by the Company at the Redemption Price, together with accrued interest, if any, to the Redemption Date; provided, however, that no such surrender shall be a condition to such payment if so specified as contemplated by Section 301 with respect to such Security; and provided, further, that, except as otherwise specified as contemplated by Section 301 with respect to such Security, any installment of interest on any Security the Stated Maturity of which installment is on or prior to the Redemption Date shall be payable to the Holder of such Security, or one or more Predecessor Securities, registered as such at the close of business on the related Regular Record Date according to the terms of such Security and subject to the provisions of Section 307. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal, premium if any, and any unpaid interest shall, until paid, bear interest (to the extent permitted by applicable law) from the Redemption Date at the rate or rates prescribed therefor in the Security.

SECTION 507. Securities Redeemed in Part.

Except as otherwise specified as contemplated by Section 301 with respect to Securities of any series, or any Tranche thereof, any Securities of any series which are to be redeemed only in part shall be surrendered 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 of like tenor, 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 SIX.

COVENANTS

The Company covenants and agrees for the benefit of the Holders and the Trustee that, for so long as any Securities are Outstanding, it shall observe the following covenants:

SECTION 601. Payment of Securities.

The Company covenants and agrees that it will duly and punctually pay the principal of and any premium and interest on the Securities in accordance with the terms of such Securities and this Indenture. For the avoidance of doubt and except as otherwise specified as contemplated by Section 301 with respect to any series of Collateral Securities, or any Tranche thereof, with respect to any Collateral Securities issued pursuant to this Indenture, (i) a principal payment on Other Senior Secured Debt Securities with respect to which the Collateral Securities were issued as security therefor shall be automatically deemed to be a corresponding principal payment with respect to the related Collateral Securities (and shall automatically be deemed to decrease the principal amount of such Collateral Securities by the amount of such payment), and (ii) any borrowing or reborrowing by, or other extension of credit in favor of, the Company under such Other Senior Secured Debt Securities shall, whether or not such borrowing, reborrowing or other extension of credit would result in a Default or Event of Default,

automatically be deemed to increase the principal amount of the related Collateral Securities by the amount of such borrowing or reborrowing, or other extension of credit.

SECTION 602. Maintenance of Office or Agency.

The Company will maintain in each Place of Payment for the Securities of each series, or any Tranche thereof, an office or agency where Securities of that series or Tranche may be presented or surrendered for payment, where Securities of that series or Tranche may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series or Tranche and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency and prompt notice to the Holders of any such change in the manner specified in Section 106. 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 Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series, or any Tranche thereof, may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee, and prompt notice to the Holders in the manner specified in Section 106, of any such designation or rescission and of any change in the location of any such other office or agency.

SECTION 603. Money for Securities Payments to Be Held in Trust.

Whenever the Company shall have one or more Paying Agents for the Securities of any series, or any Tranche thereof, it shall, on or before each due date of the principal of and premium, if any, on any of such Securities (subject to Section 505), provide to such Paying Agent or Agents a sum sufficient (without duplication) to pay the principal of or any premium or interest on such Securities, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

The Company will cause each Paying Agent for the Securities of any series, or any Tranche thereof, 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 603, that such Paying Agent will:

(1) comply with the provisions of the Trust Indenture Act that would be applicable to it as a Paying Agent if this Indenture were qualified thereunder;

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

(3) during the continuance of any default by the Company (or any other obligor upon such Securities), upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of such Securities.

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 in trust for the payment of the principal of or any premium or interest on any Security and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, 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 or such Paying Agent, before being required to make any such repayment, shall, upon receipt of a Company Request and at the expense of the Company, cause to be published once, in an Authorized Publication, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than thirty (30) days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

SECTION 604. Maintenance of Existence, etc.

Except as permitted pursuant to Article Eleven, the Company shall at all times (i) preserve and maintain in full force and effect its existence as a limited liability company under the laws of the State of Michigan and its qualification to do business in each other jurisdiction in which the conduct of its business requires such qualification, and (ii) obtain, preserve and maintain all of its rights, privileges and franchises necessary for the ownership and operation of the Transmission System in accordance with all applicable Laws and Governmental Approvals and the Transmission Documents to which it is a party, except where the termination of or failure to obtain or maintain such rights, privileges and franchises could not reasonably be expected to have a Material Adverse Effect.

SECTION 605. Books and Records.

The Company shall keep, independently from those of its Affiliates, proper books of records and accounts in which full, true and correct entries shall be made of all of its transactions, assets and businesses, and costs and expenses, in each case in accordance with GAAP and all applicable Laws. The Company shall maintain in all material respects all operating and maintenance logs and records with respect to the Transmission System which are required to be maintained by all applicable Laws and Governmental Approvals or recommended to be maintained in accordance with Good Utility Practice.

SECTION 606. Payment of Taxes and Other Claims.

The Company shall file all tax returns required to be filed in any jurisdiction and pay or discharge, or cause to be paid or discharged, no later than the date that the same shall become due all taxes, assessments and governmental charges or levies, as well as all material claims of any kind (including, without limitation, claims for labor, materials and supplies), levied or imposed upon (A) the Company or (B) the Property of the Company; provided that the Company shall not be required to pay or discharge, or cause to be paid or discharged, any such tax or other claim, (x) the applicability or validity of which is being contested in good faith through appropriate means and for which adequate cash reserves in accordance with GAAP have been established or (y) the non-filing or non-payment of which, as the case may be, could not reasonably be expected to have a Material Adverse Effect.

SECTION 607. Certain Additional Covenants with Respect to the Mortgaged Property.