Nicor Gas Company
                                                              Form 10-K
                                                              Exhibit 4.09


                             Supplemental Indenture


                          DATED AS OF DECEMBER 1, 2003


                          NORTHERN ILLINOIS GAS COMPANY

                                       TO

                            BNY MIDWEST TRUST COMPANY

                       TRUSTEE UNDER INDENTURE DATED AS OF

                        JANUARY 1, 1954 AND SUPPLEMENTAL

                               INDENTURES THERETO


                              FIRST MORTGAGE BONDS
                        5.80% SERIES DUE DECEMBER 1, 2023

This instrument was prepared by George M. Behrens, 1844 Ferry Road,
Naperville, Illinois 60563-9600

Return to:          Nicor Gas
                    Attn: Joe Johnson
                    P.O. Box 190
                    Aurora, IL 60507-0190

                                       1
<PAGE>

THIS SUPPLEMENTAL INDENTURE, dated as of the first day of December, 2003,
    between NORTHERN ILLINOIS GAS COMPANY, a corporation organized and existing
    under the laws of the State of Illinois (hereinafter called the "Company"),
    and BNY MIDWEST TRUST COMPANY, an Illinois trust company (hereinafter called
    the "Trustee"), as successor Trustee under an Indenture dated as of January
    1, 1954, as supplemented by Supplemental Indentures dated, respectively,
    February 9, 1954, April 1, 1956, June 1, 1959, July 1, 1960, June 1, 1963,
    July 1, 1963, August 1, 1964, August 1, 1965, May 1, 1966, August 1, 1966,
    July 1, 1967, June 1, 1968, December 1, 1969, August 1, 1970, June 1, 1971,
    July 1, 1972, July 1, 1973, April 1, 1975, April 30, 1976, April 30, 1976,
    July 1, 1976, August 1, 1976, December 1, 1977, January 15, 1979, December
    1, 1981, March 1, 1983, October 1, 1984, December 1, 1986, March 15, 1988,
    July 1, 1988, July 1, 1989, July 15, 1990, August 15, 1991, July 15, 1992,
    February 1, 1993, March 15, 1993, May 1, 1993, July 1, 1993, August 15,
    1994, October 15, 1995, May 10, 1996, August 1, 1996, June 1, 1997, October
    15, 1997 February 15, 1998, June 1, 1998, February 1, 1999, February 1,
    2001, May 15, 2001, August 15, 2001 and December 15, 2001, such Indenture
    dated as of January 1, 1954, as so supplemented, being hereinafter called
    the "Indenture."

WITNESSETH:

    WHEREAS, the Indenture provides for this issuance from time to time
thereunder, in series, of bonds of the Company for the purposes and subject to
the limitations therein specified; and

    WHEREAS, the Company desires, by this Supplemental Indenture, to create an
additional series of bonds to be issuable under the Indenture, such bonds to be
designated "First Mortgage Bonds, 5.80% Series due December 1, 2023"
(hereinafter called the "bonds of this Series"), and the terms and provisions to
be contained in the bonds of this Series or to be otherwise applicable thereto
to be as set forth in this Supplemental Indenture; and

    WHEREAS, the forms, respectively, of the bonds of this Series, and the
Trustee's certificate to be endorsed on all bonds of this Series, are to be
substantially as follows:

                             (FORM OF FACE OF BOND)

THIS SECURITY IS A GLOBAL BOND WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY
REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO NORTHERN ILLINOIS
GAS COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NO. RU-_______ $________

                                                           CUSIP No.__________

                          NORTHERN ILLINOIS GAS COMPANY

            First Mortgage Bond, 5.80% Series due December 1, 2023

    NORTHERN ILLINOIS GAS COMPANY, an Illinois corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to     or registered
assigns, the sum of    Dollars, on the first day of December, 2023, and to pay
to the registered owner hereof interest on said sum from the date hereof until
said sum shall be paid, at the rate of five and eighty hundredths per centum
(5.80%) per annum, payable semiannually on the first day of June and the first
day of December in each year. Both the principal of and the interest on this
bond shall be payable at the office or agency of the Company in the City of
Chicago, State of Illinois, or, at the option of the registered owner, at the
office or agency of the Company in the Borough of Manhattan, The City and State
of New York, in any coin or currency of the United States of America which at
the time of payment is legal tender for the payment of public and private debts.
Any installment of interest on this bond may, at the Company's option, be paid
by mailing checks for such interest payable to or upon the written order of the
person entitled thereto to the address of such person as it appears on the
registration books.

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<PAGE>

    So long as there is no existing default in the payment of interest on this
bond, the interest so payable on any interest payment date will be paid to the
person in whose name this bond is registered on May 15 or November 15 (whether
or not a business day), as the case may be, next preceding such interest payment
date. If and to the extent that the Company shall default in the payment of
interest due on such interest payment date, such defaulted interest shall be
paid to the person in whose name this bond is registered on the record date
fixed, in advance, by the Company for the payment of such defaulted interest.

    Additional provisions of this bond are set forth on the reverse hereof.

    This bond shall not be entitled to any security or benefit under the
Indenture or be valid or become obligatory for any purpose unless and until it
shall have been authenticated by the execution by the Trustee, or its successor
in trust under the Indenture, of the certificate endorsed hereon.

   IN WITNESS WHEREOF, Northern Illinois Gas Company has caused this bond to be
executed in its name by its President, manually or by facsimile signature, and
has caused its corporate seal to be impressed hereon or a facsimile thereof to
be imprinted hereon and to be attested by its Assistant Secretary, manually or
by facsimile signature.

Dated:_______________

                                                 NORTHERN ILLINOIS GAS COMPANY

                                                 BY:__________________________
                                                            President

ATTEST:

_________________________________
      Assistant Secretary


              (FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)

    This bond is one of the bonds of the series designated therein, referred to
and described in the within-mentioned Supplemental Indenture dated as of
December 1, 2003.

BNY MIDWEST TRUST COMPANY,
   TRUSTEE

BY:________________________
      Authorized Officer

                         (FORM OF REVERSE SIDE OF BOND)

    This bond is one, of the series hereinafter specified, of the bonds issued
and to be issued in series from time to time under and in accordance with and
secured by an Indenture dated as of January 1, 1954, to BNY Midwest Trust
Company, as Trustee, as supplemented by certain indentures supplemental thereto,
executed and delivered to the Trustee; and this bond is one of a series of such
bonds, designated "Northern Illinois Gas Company First Mortgage Bonds, 5.80%
Series due December 1, 2023 ("herein called "bonds of this Series"), the
issuance of which is provided for by a Supplemental Indenture dated as of
December 1, 2003 (hereinafter called the "Supplemental Indenture"), executed and
delivered by the Company to the Trustee. The term "Indenture", as hereinafter
used, means said Indenture dated as of January 1, 1954, and all indentures
supplemental thereto (including, without limitation, the Supplemental Indenture)
from time to time in effect. Reference is made to the Indenture for a
description of the property mortgaged and pledged, the nature and extent of the
security, the rights of the holders and registered owners of said bonds, of the
Company and of the Trustee in respect of the security, and the terms and
conditions governing the issuance and security of said bonds.

    With the consent of the Company and to the extent permitted by and as
provided in the Indenture, modifications or alterations of the Indenture or of
any supplemental indenture and of the rights and obligations of the Company and
of the holders and registered owners of the bonds may be made, and compliance
with any provision of the Indenture or of any supplemental indenture may be
waived, by the affirmative vote of the holders and registered owners of not less
than sixty-six and two-thirds per centum (66 2/3%) in principal amount of the
bonds then outstanding under the Indenture, and by the affirmative vote of the
holders and registered owners of not less than sixty-six and two-thirds per
centum (66 2/3%) in principal amount of the bonds of any series then outstanding
under the Indenture and affected by such modification or alteration, in case one
or more but less than all of the series of bonds then outstanding under the
Indenture are so affected, but in any case excluding bonds disqualified from
voting by reason of the Company's interest therein as provided in the Indenture;
subject, however, to the condition, among other conditions stated in the
Indenture, that no such

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<PAGE>

modification or alteration shall be made which, among
other things, will permit the extension of the time or times of payment of the
principal of or the interest or the premium, if any, on this bond, or the
reduction in the principal amount hereof or in the rate of interest or the
amount of any premium hereon, or any other modification in the terms of payment
of such principal, interest or premium, which terms of payment are
unconditional, or, otherwise than as permitted by the Indenture, the creation of
any lien ranking prior to or on a parity with the lien of the Indenture with
respect to any of the mortgaged property, all as more fully provided in the
Indenture.

    The bonds of this Series may be called for redemption by the Company, as a
whole at any time or in part from time to time, at a redemption price equal to
the greater of (i) 100% of the principal amount of the bonds of this Series to
be redeemed or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (exclusive of interest accrued to the
date of redemption) discounted, at the then current Treasury Rate (as defined in
the Supplemental Indenture) plus 12.5 basis points, to the date of redemption on
a semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
plus, in each case, accrued and unpaid interest on the principal amount being
redeemed to the date of redemption.
    Notice of each redemption shall be mailed to all registered owners not less
than thirty nor more than forty-five days before the redemption date.

    In case of certain completed defaults specified in the Indenture, the
principal of this bond may be declared or may become due and payable in the
manner and with the effect provided in the Indenture.

    No recourse shall be had for the payment of the principal of or the interest
or the premium, if any, on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, officer or director, past, present or future, of the Company or of
any predecessor or successor corporation, either directly or through the Company
or such predecessor or successor corporation, under any constitution or statute
or rule of law, or by the enforcement of any assessment or penalty, or
otherwise, all such liability of incorporators, stockholders, directors and
officers being waived and released by the registered owner hereof by the
acceptance of this bond and being likewise waived and released by the terms of
the Indenture, all as more fully provided therein.

    This bond is transferable by the registered owner hereof, in person or by
duly authorized attorney, at the office or agency of the Company in the City of
Chicago, State of Illinois, or, at the option of registered owner, at the office
or agency of the Company in the Borough of Manhattan, The City and State of New
York, upon surrender and cancellation of this bond; and thereupon a new
registered bond or bonds without coupons of the same aggregate principal amount
and series will, upon the payment of any transfer tax or taxes payable, be
issued to the transferee in exchange herefor. The Company shall not be required
to exchange or transfer this bond if this bond or a portion hereof has been
selected for redemption.

                               (END OF BOND FORM)

and

    WHEREAS, all acts and things necessary to make this Supplemental Indenture,
when duly executed and delivered, a valid, binding and legal instrument in
accordance with its terms, and for the purposes herein expressed, have been done
and performed, and the execution and delivery of this Supplemental Indenture
have in all respects been duly authorized;

    NOW, THEREFORE, in consideration of the premises and of the sum of one
dollar paid by the Trustee to the Company, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, for the purpose of
securing the due and punctual payment of the principal of and the interest and
premium, if any, on all bonds which shall be issued under the Indenture, and for
the purpose of securing the faithful performance and observance of all the
covenants and conditions set forth in the Indenture and in all indentures
supplemental thereto, the Company by these presents does grant, bargain, sell,
transfer, assign, pledge, mortgage, warrant and convey unto BNY Midwest Trust
Company, as Trustee, and its successor or successors in the trust hereby
created, all property, real and personal (other than property expressly excepted
from the lien and operation of the Indenture), which, at the actual date of
execution and delivery of this Supplemental Indenture, is solely used or held
for use in the operation by the Company of its gas utility system and in the
conduct of its gas utility business and all property, real and personal, used or
useful in the gas utility business (other than property expressly excepted form
the lien and operation of the Indenture) acquired by the Company after the
actual date of execution and delivery of this Supplemental Indenture or (subject
to the provisions of Section 16.03 of the Indenture) by any successor
corporation after such execution and delivery, and it is further agreed by and
between the Company and the Trustee as follows:

                                   ARTICLE I.

                              BONDS OF THIS SERIES

    SECTION 1. The bonds of this Series shall, as hereinbefore recited, be
designated as the Company's "First Mortgage Bonds, 5.80% Series due December 1,
2023". The bonds of this Series will be initially limited to $50,000,000 in
aggregate principal amount, exclusive of bonds of such series authenticated and
delivered pursuant to Section 4.12 of the Indenture. The Company may, without
the consent of the holders of the bonds of this Series, increase the principal
amount of the bonds of this Series by issuing additional bonds of this Series in
the future on the same terms and conditions, except for any differences in the
issue price and interest accrued

                                       4
<PAGE>

prior to the issue date of the additional bonds of this Series and with the same
CUSIP numbers as the bonds of this Series initially issued. Any additional bonds
of this Series would rank equally and ratably with the bonds of this Series
initially issued and would be treated as a single series of bonds for all
purposes under the Indenture.

    SECTION 2. The bonds of this Series shall be registered bonds without
coupons, and the form of such bonds, and of the Trustee's certificate of
authentication to be endorsed on all bonds of this Series, shall be
substantially as hereinbefore recited, respectively.

    SECTION 3. The bonds of this Series shall be issued in the denomination of
$1,000 each and in such integral multiple or multiples thereof as shall be
determined and authorized by the Board of Directors of the Company or by any
officer of the Company authorized by the Board of Directors to make such
determination, the authorization of the denomination of any bond to be
conclusively evidenced by the execution thereof on behalf of the Company. The
bonds of this Series shall be numbered RU-1 and consecutively upwards, or in
such other appropriate manner as shall be determined and authorized by the Board
of Directors of the Company.

    All bonds of this Series shall be dated December 1, 2003 except that each
bond issued on or after the first payment of interest thereon shall be dated as
of the date of the interest payment date thereof to which interest shall have
been paid on the bonds of such series next preceding the date of issue, unless
issued on an interest payment date to which interest shall have been so paid, in
which event such bonds shall be dated as of the date of issue; provided,
however, that bonds issued on or after November 15 and before the next
succeeding December 1 or on or after May 15 and before the next succeeding June
1 shall be dated the next succeeding interest payment date if interest shall
have been paid to such date. All bonds of this Series shall mature December 1,
2023 and shall bear interest at the rate of 5.80% per annum until the principal
thereof shall be paid. Such interest shall be calculated on the basis of a
360-day year consisting of twelve 30-day months and shall be payable
semi-annually on the first day of June and the first day of December in each
year, beginning June 1, 2004. So long as there is no existing default in the
payment of interest on the bonds of this Series, such interest shall be payable
to the person in whose name each such bond is registered on the November 15 or
May 15 (whether or not business day), as the case may be, next preceding the
respective interest payment dates; provided, however, if and to the extent that
the Company shall default in the payment of interest due on such interest
payment date, such defaulted interest shall be paid to the person in whose name
each such bond is registered on the record date fixed, in advance, by the
Company for the payment of such defaulted interest. Interest will accrue on
overdue interest installments at the rate of 5.80% per annum.

    The principal of and interest and premium, if any, on the bonds of this
Series shall be payable in any coin or currency of the United States of America
which at the time of payment is legal tender for the payment of public and
private debts, and shall be payable at the office or agency of the Company in
the City of Chicago, State of Illinois, or, at the option of the registered
owner, at the office or agency of the Company in the Borough of Manhattan, The
City and State of New York. Any installment of interest on the bonds may, at the
Company's option, be paid by mailing checks for such interest payable to or upon
the written order of the person entitled thereto to the address of such person
as it appears on the registration books. The bonds of this Series shall be
registrable, transferable and exchangeable in the manner provided in Sections
4.08 and 4.09 of the Indenture, at either of such offices or agencies. With
respect to a Global Bond (as defined herein), the Company may make payments of
principal of, premium, if any, and interest, if any, on such Global Bond
pursuant to and in accordance with such arrangements as are agreed upon by the
Company and the depositary for such Global Bond.

    SECTION 4. The bonds of this Series, upon the mailing of notice and in the
manner provided in Section 7.01 of the Indenture (except that no published
notice shall be required for the bonds of this Series) and with the effect
provided in Section 7.02 thereof, shall be redeemable at the option of the
Company, as a whole at any time or in part from time to time, at a redemption
price equal to the greater of (i) 100% of the principal amount of the bonds of
this Series to be redeemed or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest thereon (exclusive of
interest accrued to the date of redemption) discounted, at the then current
Treasury Rate plus 12.5 basis points, to the date of redemption on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) plus, in each
case, accrued and unpaid interest of the principal amount being redeemed to the
date of redemption.

    "Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.

    "Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the bonds of this Series to be redeemed that would be
used, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the bonds of this Series.

    "Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.

                                       5

<PAGE>

    "Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with the Company.

    "Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such redemption date.

    "Reference Treasury Dealer" means each of Banc One Capital Markets, Inc. and
its successors and three other nationally recognized investment banking firms
that are Primary Treasury Dealers specified from time to time by the Company;
provided, however, that if any of the foregoing shall cease to be a Primary
Treasury Dealer, the Company shall replace it with another Primary Treasury
Dealer.

    "Primary Treasury Dealer" means a primary U.S. government securities
dealer in New York City.

    "Business Day" means, for purpose of this Section 4, any day other than a
Saturday or Sunday and other than a day on which banking institutions in
Chicago, Illinois or New York, New York are authorized or obligated by law or
executive order to close.

    SECTION 5. No sinking fund is to be provided for the bonds of this Series.

    SECTION 6. (a) The bonds of this Series shall be issued initially in the
form of one or more global bonds (each such global bond, a "Global Bond") to or
on behalf of The Depository Trust Company ("DTC"), as depositary therefor, and
registered in the name of DTC or its nominee. Any bonds of this Series to be
issued or transferred to, or to be held by or on behalf of, DTC as such
depositary or such nominee (or any successor of such nominee) for such purpose
shall bear the depositary legends in substantially the form set forth at the top
of the form of bonds of this Series in this Supplemental Indenture, unless
otherwise agreed by the Company, and, in the case of a successor depositary,
such legend or legends as such depositary and/or the Company shall require and
to which they shall agree, in each case such agreement to be confirmed in
writing to the Trustee.
      (b) Notwithstanding any other provision of this Section 6 or of Section
4.08 of the Indenture, except as contemplated by the provisions of Section 6(c)
hereof, a Global Bond may be transferred, in whole but not in part and in the
manner provided in Section 4.08 of the Indenture, only to a nominee of the
depositary for such Global Bond, or to DTC, or to a successor depositary for
such Global Bond selected or approved by the Company, or to a nominee of such
successor depositary.

      (c) (1) If at any time the depositary for a Global Bond notifies the
Company that it is unwilling or unable to continue as the depositary for such
Global Bond or if at any time the depositary for a Global Bond shall no longer
be eligible or in good standing under any applicable statute or regulation, the
Company shall appoint a successor depositary with respect to such Global Bond.
If a successor depositary for such Global Bond is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee, upon receipt of an
order of the Company for the authentication and delivery of bonds of this Series
in the form of definitive certificates in exchange for such Global Bond, will
authenticate and deliver, without service charge, bonds of this Series in the
form of definitive certificates of like tenor and terms in an aggregate
principal amount equal to the principal amount of the Global Bond in exchange
for such Global Bond. Such bonds of this Series will be issued to and registered
in the name of such person or persons as are specified by the depositary.

       (2) The Company may at any time and in its sole discretion determine that
any bonds of this Series issued or issuable in the form of one or more Global
Bonds shall no longer be represented by such global bond or bonds. In any such
event the Company will execute, and the Trustee, upon receipt of an order of the
Company for the authentication and delivery of bonds of this Series in the form
of definitive certificates in exchange in whole or in part for such Global Bond
or Global Bonds, will authenticate and deliver, without service charge, to each
person specified by the depositary, bonds of this Series in the form of
definitive certificates of like tenor and terms in an aggregate principal amount
equal to the principal amount of such Global Bond or the aggregate principal
amount of such Global Bonds in exchange for such Global Bond or Global Bonds.

       (3) If the Company so elects in an officers' certificate, the depositary
may surrender bonds of this Series issued in the form of a Global Bond in
exchange in whole or in part for bonds of this Series in the form of definitive
certificates of like tenor and terms on such terms as are acceptable to the
Company and such Depositary. Thereupon the Company shall execute, and the
Trustee shall authenticate and deliver, without service charge, (A) to each
person specified by such depositary a new Global Bond or Global Bonds of this
Series of like tenor and terms and any authorized denomination as requested by
such person in aggregate principal amount equal to and in exchange for such
person's beneficial interest in the Global Bond, and (B) to such depositary a
new Global Bond of like tenor and terms and in an authorized denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Bond and the aggregate principal amount of bonds delivered to holders
thereof.

       (4) Within seven days after the occurrence and continuance of a completed
default with respect to the bonds of this Series, the Company shall execute, and
the Trustee shall authenticate and deliver, bonds of this Series in definitive
registered form in any authorized denominations and in aggregate principal
amount equal to the principal amount of such Global Bonds in exchange for such
Global Bonds.

                                       6
<PAGE>

       (5) In any exchange provided for in any of Section 6(c)(1), Section
6(c)(2), Section 6(c)(3) or Section 6(c)(4), the Company shall execute and the
Trustee shall authenticate and deliver bonds of this Series in the form of
definitive certificates in authorized denominations. Upon the exchange of the
entire principal amount of a Global Bond for bonds of this Series in the form of
definitive certificates, such Global Bond shall be canceled by the Trustee.
Except as provided in Section 6(c)(3), bonds of this Series issued in exchange
for a Global Bond pursuant to this Section 6 shall be registered in such names
and in such authorized denominations as the depositary for such Global Bond,
acting pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. Provided that the Company and the Trustee
have so agreed, the Trustee shall deliver such bonds of this Series to the
persons in whose names the bonds of this Series are so to be registered.

       (6) Any endorsement of a Global Bond to reflect the principal amount
thereof, or any increase or decrease in such principal amount, shall be made in
such manner and by such person or persons as shall be specified in or pursuant
to any applicable letter of representations or other arrangement entered into
with, or procedures of, the depositary with respect to such Global Bond or in
the order of the Company delivered or to be delivered pursuant to the Indenture
with respect thereto. Subject to the provisions of the Indenture, the Trustee
shall deliver and redeliver any such Global Bond in the manner and upon
instructions given by the person or persons specified in or pursuant to any
applicable letter of representations or other arrangement entered into with, or
procedures of, the depositary with respect to such Global Bond or in any
applicable order of the Company. If an order of the Company pursuant to the
Indenture is so delivered, any instructions by the Company with respect to such
Global Bond contained therein shall be in writing but need not be accompanied by
or contained in an officers' certificate and need not be accompanied by an
opinion of counsel.

                                   ARTICLE II.

                            MISCELLANEOUS PROVISIONS

    SECTION 1. This Supplemental Indenture is executed by the Company and the
Trustee pursuant to provisions of Section 4.02 of the Indenture and the terms
and conditions hereof shall be deemed to be a part of the terms and conditions
of the Indenture for any and all purposes. The Indenture, as heretofore
supplemented and as supplemented by this Supplemental Indenture, is in all
respects ratified and confirmed.

    SECTION 2. This Supplemental Indenture shall bind and, subject to the
provisions of Article XVI of the Indenture, inure to the benefit of the
respective successors and assigns of the parties hereto.

    SECTION 3. Although this Supplemental Indenture is dated as of December 1,
2003, it shall be effective only from and after the actual time of its execution
and delivery by the Company and the Trustee on the date indicated by their
respective acknowledgements hereto.

    SECTION 4. This Supplemental Indenture may be simultaneously executed in any
number of counterparts, and all such counterparts executed and delivered, each
as an original, shall constitute but one and the same instrument.

                                       7
<PAGE>

    IN WITNESS WHEREOF, Northern Illinois Gas Company has caused this
Supplemental Indenture to be executed in its name by its Vice President and
Treasurer, and its corporate seal to be hereunto affixed and attested by its
Assistant Secretary, and BNY Midwest Trust Company, as Trustee under the
Indenture, has caused this Supplemental Indenture to be executed in its name by
one of its Assistant Vice Presidents, and its seal to be hereunto affixed and
attested by one of its Assistant Secretaries, all as of the day and year first
above written.


NORTHERN ILLINOIS GAS COMPANY

BY:   /S/  GEORGE M. BEHRENS
   ---------------------------
      GEORGE M. BEHRENS
      Vice President and Treasurer

                                               ATTEST:

                                                          /S/  MARK KNOX
                                               -------------------------------
                                                              MARK KNOX
                                                         Assistant Secretary


BNY MIDWEST TRUST COMPANY,
   as Trustee

BY: /S/ D.G. DONOVAN
    ---------------------
    D.G. DONOVAN
    Assistant Vice President

                                               ATTEST:

                                                         /S/ C. POTTER
                                               -------------------------------
                                                          C. POTTER
                                                      Assistant Secretary

                                     SS
 -    STATE OF ILLINOIS       }      :
      COUNTY OF DUPAGE        }


                                       8

<PAGE>

    I, Jennifer M. Dziewior, a Notary Public in the State aforesaid, DO HEREBY
CERTIFY that George M. Behrens, Vice President and Treasurer of Northern
Illinois Gas Company, an Illinois corporation, one of the parties described in
and which executed the foregoing instrument, and Mark Knox, Assistant Secretary
of said corporation, who are both personally known to me to be the same persons
whose names are subscribed to the foregoing instrument as such Vice President
and Treasurer and Assistant Secretary, respectively, and who are both personally
known to me to be the Vice President and Treasurer and an Assistant Secretary,
respectively, of said corporation, appeared before me this day in person and
severally acknowledged that they signed, sealed, executed and delivered said
instrument as their free and voluntary act as such Vice President and Treasurer
and Assistant Secretary, respectively, of said corporation, and as the free and
voluntary act of said corporation, for the uses and purposes therein set forth.


    GIVEN under my hand and notarial seal this 5th day of December, 2003 A.D.



                                                    /S/ JENNIFER M. DZIEWIOR
                                                   --------------------------
                                                          Notary Public

My Commission expires June 19, 2007.
                                    SS
 -    STATE OF ILLINOIS       }     :
      COUNTY OF COOK          }


                                       9

<PAGE>

    I, A. Hernandez, a Notary Public in and for the said County, in the State
aforesaid, DO HEREBY CERTIFY that D.G. Donovan, Assistant Vice President of BNY
Midwest Trust Company, an Illinois trust company, one of the parties described
in and which executed the foregoing instrument, and C. Potter, an Assistant
Secretary of said trust company, who are both personally known to me to be the
same persons whose names are subscribed to the foregoing instrument as such
Assistant Vice President and Assistant Secretary, respectively, and who are both
personally known to me to be an Assistant Vice President and an Assistant
Secretary, respectively, of said trust company, appeared before me this day in
person and severally acknowledged that they signed, sealed, executed and
delivered said instrument as their free and voluntary act as such Assistant Vice
President and Assistant Secretary, respectively, of said trust company, and as
the free and voluntary act of said trust company, for the uses and purposes
therein set forth.

    GIVEN under my hand and notarial seal this 5th day of December, 2003 A.D.

                                                       /S/  A. HERNANDEZ
                                                   -------------------------
                                                           Notary Public

My Commission expires July 8, 2007.

                                       10
<PAGE>

                                 RECORDING DATA

    This Supplemental Indenture was recorded on December 8, 9 and 10, 2003, in
the office of the Recorder of Deeds in certain counties in the State of
Illinois, as follows:

County                                      Document No.
---------                                   ------------
Cook                                        0334344141
Adams                                       200319157
Boone                                       2003R20357
Bureau                                      03-10345
Carroll                                     480426
Champaign                                   2003R53444
DeKalb                                      2003-034956
DeWitt                                      206630
DuPage                                      R2003-462781
Ford                                        228168
Grundy                                      427538
Hancock                                     2003-5246
Henderson                                   158145
Henry                                       20-0315435
Iroquois                                    03R7180
JoDaviess                                   308238
Kane                                        2003K209925
Kankakee                                    200331526
Kendall                                     03 42678
Lake                                        5449578
LaSalle                                     R2003-41727
Lee                                         2003-12465
Livingston                                  551525
McHenry                                     2003R0163064
McLean                                      200360868
Mercer                                      341295
Ogle                                        0321220
Piatt                                       314631
Pike                                        03-4574
Rock Island                                 2003-46818
Stephenson                                  200300050952
Tazewell                                    200300045007
Vermilion                                   20074
Whiteside                                   16704-2003
Will                                        R2003297381
Winnebago                                   3111335
Woodford                                    313285

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