Document:

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                                                            EXHIBIT (4)(e)(xiii)

                       NINETY-FIFTH SUPPLEMENTAL INDENTURE

                        PROVIDING AMONG OTHER THINGS FOR

                              FIRST MORTGAGE BONDS,

                   2004-1 COLLATERAL SERIES (INTEREST BEARING)

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

                           DATED AS OF AUGUST 3, 2004

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

                            CONSUMERS ENERGY COMPANY

                                       TO

                              JPMORGAN CHASE BANK,

                                     TRUSTEE

                                                          Counterpart ____ of 80

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      THIS NINETY-FIFTH SUPPLEMENTAL INDENTURE, dated as of August 3, 2004
(herein sometimes referred to as "this Supplemental Indenture"), made and
entered into by and between CONSUMERS ENERGY COMPANY, a corporation organized
and existing under the laws of the State of Michigan, with its principal
executive office and place of business at One Energy Plaza, Jackson, Jackson
County, Michigan 49201, formerly known as Consumers Power Company (hereinafter
sometimes referred to as the "Company"), and JPMORGAN CHASE BANK, a corporation
organized and existing under the laws of the State of New York, with its
corporate trust offices at 4 New York Plaza, New York, New York 10004
(hereinafter sometimes referred to as the "Trustee"), as Trustee under the
Indenture dated as of September 1, 1945 between Consumers Power Company, a Maine
corporation (hereinafter sometimes referred to as the "Maine corporation"), and
City Bank Farmers Trust Company (Citibank, N.A., successor, hereinafter
sometimes referred to as the "Predecessor Trustee"), securing bonds issued and
to be issued as provided therein (hereinafter sometimes referred to as the
"Indenture"),

      WHEREAS at the close of business on January 30, 1959, City Bank Farmers
Trust Company was converted into a national banking association under the title
"First National City Trust Company"; and

      WHEREAS at the close of business on January 15, 1963, First National City
Trust Company was merged into First National City Bank; and

      WHEREAS at the close of business on October 31, 1968, First National City
Bank was merged into The City Bank of New York, National Association, the name
of which was thereupon changed to First National City Bank; and

      WHEREAS effective March 1, 1976, the name of First National City Bank was
changed to Citibank, N.A.; and

      WHEREAS effective July 16, 1984, Manufacturers Hanover Trust Company
succeeded Citibank, N.A. as Trustee under the Indenture; and

      WHEREAS effective June 19, 1992, Chemical Bank succeeded by merger to
Manufacturers Hanover Trust Company as Trustee under the Indenture; and

      WHEREAS effective July 15, 1996, The Chase Manhattan Bank (National
Association), merged with and into Chemical Bank which thereafter was renamed
The Chase Manhattan Bank; and

      WHEREAS effective November 11, 2001, The Chase Manhattan Bank merged with
Morgan Guaranty Trust Company of New York and the surviving corporation was
renamed JPMorgan Chase Bank; and

        WHEREAS the Indenture was executed and delivered for the purpose of
securing such bonds as may from time to time be issued under and in accordance
with the terms of the Indenture, the aggregate principal amount of bonds to be
secured thereby being limited to $5,000,000,000 at any one time outstanding
(except as provided in Section 2.01 of the Indenture), and the Indenture
describes and sets forth the property conveyed thereby and is filed in the
Office of the Secretary of State of the State of Michigan and is of record in
the Office of

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the Register of Deeds of each county in the State of Michigan in which this
Supplemental Indenture is to be recorded; and

      WHEREAS the Indenture has been supplemented and amended by various
indentures supplemental thereto, each of which is filed in the Office of the
Secretary of State of the State of Michigan and is of record in the Office of
the Register of Deeds of each county in the State of Michigan in which this
Supplemental Indenture is to be recorded; and

      WHEREAS the Company and the Maine corporation entered into an Agreement of
Merger and Consolidation, dated as of February 14, 1968, which provided for the
Maine corporation to merge into the Company; and

      WHEREAS the effective date of such Agreement of Merger and Consolidation
was June 6, 1968, upon which date the Maine corporation was merged into the
Company and the name of the Company was changed from "Consumers Power Company of
Michigan" to "Consumers Power Company"; and

      WHEREAS the Company and the Predecessor Trustee entered into a Sixteenth
Supplemental Indenture, dated as of June 4, 1968, which provided, among other
things, for the assumption of the Indenture by the Company; and

      WHEREAS said Sixteenth Supplemental Indenture became effective on the
effective date of such Agreement of Merger and Consolidation; and

      WHEREAS the Company has succeeded to and has been substituted for the
Maine corporation under the Indenture with the same effect as if it had been
named therein as the mortgagor corporation; and

      WHEREAS effective March 11, 1997, the name of Consumers Power Company was
changed to Consumers Energy Company; and

      WHEREAS, the Company has entered into an Amended and Restated Credit
Agreement dated as of August 3, 2004 (as amended or otherwise modified from time
to time, the "Credit Agreement") with various financial institutions and Bank
One, NA, as administrative agent (in such capacity, the "Agent") for the Banks
(as such term is defined in the Credit Agreement), providing for the making of
certain financial accommodations thereunder, and pursuant to such Credit
Agreement the Company has agreed to issue to the Agent, as evidence of and
security for the Obligations (as such term is defined in the Credit Agreement),
a new series of bonds under the Indenture; and

      WHEREAS, for such purposes the Company desires to issue a new series of
bonds, to be designated First Mortgage Bonds, 2004-1 Collateral Series (Interest
Bearing), each of which bonds shall also bear the descriptive title "First
Mortgage Bond" (hereinafter provided for and hereinafter sometimes referred to
as the "2004-1 Collateral Bonds"), the bonds of which series are to be issued as
registered bonds without coupons and are to bear interest at the rate per annum
specified herein and are to mature on the Termination Date (as such term is
defined in the Credit Agreement); and

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      WHEREAS, each of the registered bonds without coupons of the 2004-1
Collateral Bonds and the Trustee's Authentication Certificate thereon are to be
substantially in the following form, to wit:

                            [FORM OF REGISTERED BOND

                         OF THE 2004-1 COLLATERAL BONDS]

                                     [FACE]

                            CONSUMERS ENERGY COMPANY
                               FIRST MORTGAGE BOND

                   2004-1 COLLATERAL SERIES (INTEREST BEARING)

      No. ___                                                       $500,000,000

      CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called the
"Company"), for value received, hereby promises to pay to Bank One, NA, as agent
(in such capacity, the "Agent") for the Banks under and as defined in the
Amended and Restated Credit Agreement dated as of August 3, 2004 among the
Company, the Banks and the Agent (as amended or otherwise modified from time to
time, the "Credit Agreement"), or registered assigns, the principal sum of Five
Hundred Million Dollars ($500,000,000) or such lesser principal amount as shall
be equal to the aggregate principal amount of the Loans (as defined in the
Credit Agreement) and Reimbursement Obligations (as defined in the Credit
Agreement) included in the Obligations (as defined in the Credit Agreement)
outstanding on the Termination Date (as defined in the Credit Agreement) (the
"Maturity Date"), but not in excess, however, of the principal amount of this
bond, and to pay interest thereon at the Interest Rate (as defined below) until
the principal hereof is paid or duly made available for payment on the Maturity
Date, or, in the event of redemption of this bond, until the redemption date,
or, in the event of default in the payment of the principal hereof, until the
Company's obligations with respect to the payment of such principal shall be
discharged as provided in the Indenture (as defined on the reverse hereof).
Interest on this bond shall be payable on each Interest Payment Date (as defined
below), commencing on the first Interest Payment Date next succeeding August 3,
2004. If the Maturity Date falls on a day which is not a Business Day, as
defined below, principal and any interest and/or fees payable with respect to
the Maturity Date will be paid on the immediately preceding Business Day. The
interest payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions, be paid to the person in whose
name this bond (or one or more predecessor bonds) is registered at the close of
business on the Record Date (as defined below); provided, however, that interest
payable on the Maturity Date will be payable to the person to whom the principal
hereof shall be payable. Should the Company default in the payment of interest
("Defaulted Interest"), the Defaulted Interest shall be paid to the person in
whose name this bond (or one or more predecessor bonds) is registered on a
subsequent record date fixed by the Company, which subsequent record date shall
be fifteen (15) days prior to the payment of such Defaulted Interest. As used
herein, (A) "Business Day" shall mean any day, other than a Saturday or Sunday,
on which banks generally are open in Chicago,

                                      -3-
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Illinois and New York, New York for the conduct of substantially all of their
commercial lending activities and on which interbank wire transfers can be made
on the Fedwire system; (B) "Interest Payment Date" shall mean each date on which
Obligations constituting interest and/or fees are due and payable from time to
time pursuant to the Credit Agreement; (C) "Interest Rate" shall mean a rate of
interest per annum, adjusted as necessary, to result in an interest payment
equal to the aggregate amount of Obligations constituting interest and fees due
under the Credit Agreement on the applicable Interest Payment Date; and (D)
"Record Date" with respect to any Interest Payment Date shall mean the day
(whether or not a Business Day) immediately next preceding such Interest Payment
Date.

      Payment of the principal of and interest on this bond will be made in
immediately available funds at the office or agency of the Company maintained
for that purpose in the City of Jackson, Michigan, in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.

      The provisions of this bond are continued on the reverse hereof and such
continued provisions shall for all purposes have the same effect as though fully
set forth at this place.

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

      IN WITNESS WHEREOF, Consumers Energy Company has caused this bond to be
executed in its name by its Chairman of the Board, its President or one of its
Vice Presidents by his or her signature or a facsimile thereof, and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon
and attested by its Secretary or one of its Assistant Secretaries by his or her
signature or a facsimile thereof.

                                            CONSUMERS ENERGY COMPANY

Dated:

                                            By _____________________________

                                            Printed ________________________

                                            Title __________________________

Attest: ________________________

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                      TRUSTEE'S AUTHENTICATION CERTIFICATE

      This is one of the bonds, of the series designated therein, described in
the within-mentioned Indenture.

                                            JPMORGAN CHASE BANK, Trustee

                                            By
                                               -----------------------------
                                                     Authorized Officer

                                    [REVERSE]

                            CONSUMERS ENERGY COMPANY

                               FIRST MORTGAGE BOND
                   2004-1 COLLATERAL SERIES (INTEREST BEARING)

      This bond is one of the bonds of a series designated as First Mortgage
Bonds, 2004-1 Collateral Series (Interest Bearing) (sometimes herein referred to
as the "2004-1 Collateral Bonds") issued under and in accordance with and
secured by an Indenture dated as of September 1, 1945, given by the Company (or
its predecessor, Consumers Power Company, a Maine corporation) to City Bank
Farmers Trust Company (JPMorgan Chase Bank, successor) (hereinafter sometimes
referred to as the "Trustee"), together with indentures supplemental thereto,
heretofore or hereafter executed, to which indenture and indentures supplemental
thereto (hereinafter referred to collectively as the "Indenture") reference is
hereby made for a description of the property mortgaged and pledged, the nature
and extent of the security and the rights, duties and immunities thereunder of
the Trustee and the rights of the holders of said bonds and of the Trustee and
of the Company in respect of such security, and the limitations on such rights.
By the terms of the Indenture, the bonds to be secured thereby are issuable in
series which may vary as to date, amount, date of maturity, rate of interest and
in other respects as provided in the Indenture.

      The 2004-1 Collateral Bonds are to be issued and delivered to the Agent in
order to evidence and secure the obligation of the Company under the Credit
Agreement to make payments to the Banks under the Credit Agreement and to
provide the Banks the benefit of the lien of the Indenture with respect to the
2004-1 Collateral Bonds.

      The obligation of the Company to make payments with respect to the
principal of 2004-1 Collateral Bonds shall be fully or partially, as the case
may be, satisfied and discharged to the extent that, at the time that any such
payment shall be due, the then due principal of the Loans and/or the
Reimbursement Obligations included in the Obligations shall have been fully or

                                      -5-
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partially paid. Satisfaction of any obligation to the extent that payment is
made with respect to the Loans and/or the Reimbursement Obligations means that
if any payment is made on the principal of the Loans and/or the Reimbursement
Obligations, a corresponding payment obligation with respect to the principal of
the 2004-1 Collateral Bonds shall be deemed discharged in the same amount as the
payment with respect to the Loans and/or the Reimbursement Obligations
discharges the outstanding obligation with respect to such Loans and/or
Reimbursement Obligations. No such payment of principal shall reduce the
principal amount of the 2004-1 Collateral Bonds.

      The obligation of the Company to make payments with respect to the
interest on 2004-1 Collateral Bonds shall be fully or partially, as the case may
be, satisfied and discharged to the extent that, at the time that any such
payment shall be due, the then due interest and/or fees under the Credit
Agreement shall have been fully or partially paid. Satisfaction of any
obligation to the extent that payment is made with respect to the interest
and/or fees under the Credit Agreement means that if any payment is made on the
interest and/or fees under the Credit Agreement, a corresponding payment
obligation with respect to the interest on the 2004-1 Collateral Bonds shall be
deemed discharged in the same amount as the payment with respect to the Loans
and/or the Reimbursement Obligations discharges the outstanding obligation with
respect to such Loans and/or Reimbursement Obligations.

      The Trustee may at any time and all times conclusively assume that the
obligation of the Company to make payments with respect to the principal of and
interest on this bond, so far as such payments at the time have become due, has
been fully satisfied and discharged unless and until the Trustee shall have
received a written notice from the Agent stating (i) that timely payment of
principal and interest on the 2004-1 Collateral Bonds has not been made, (ii)
that the Company is in arrears as to the payments required to be made by it to
the Agent in connection with the Obligations pursuant to the Credit Agreement,
and (iii) the amount of the arrearage.

      If an Event of Default (as defined in the Credit Agreement) with respect
to the payment of the principal of the Loans and/or the Reimbursement
Obligations shall have occurred, it shall be deemed to be a default for purposes
of Section 11.01 of the Indenture in the payment of the principal of the 2004-1
Collateral Bonds equal to the amount of such unpaid principal or Reimbursement
Obligations (but in no event in excess of the principal amount of the 2004-1
Collateral Bonds). If an Event of Default (as defined in the Credit Agreement)
with respect to the payment of interest on the Loans and/or the Reimbursement
Obligations or any fees shall have occurred, it shall be deemed to be a default
for purposes of Section 11.01 of the Indenture in the payment of the interest on
the 2004-1 Collateral Bonds equal to the amount of such unpaid interest or fees.

      This bond is not redeemable except upon written demand of the Agent
following the occurrence of an Event of Default under the Credit Agreement and
the acceleration of the Obligations, as provided in Section 9.2 of the Credit
Agreement. This bond is not redeemable by the operation of the improvement fund
or the maintenance and replacement provisions of the Indenture or with the
proceeds of released property.

      In case of certain defaults as specified in the Indenture, the principal
of this bond may be declared or may become due and payable on the conditions, at
the time, in the manner and with

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the effect provided in the Indenture. The holders of certain specified
percentages of the bonds at the time outstanding, including in certain cases
specified percentages of bonds of particular series, may in certain cases, to
the extent and as provided in the Indenture, waive certain defaults thereunder
and the consequences of such defaults.

      The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than seventy-five per centum in
principal amount of the bonds (exclusive of bonds disqualified by reason of the
Company's interest therein) at the time outstanding, including, if more than one
series of bonds shall be at the time outstanding, not less than sixty per centum
in principal amount of each series affected, to effect, by an indenture
supplemental to the Indenture, modifications or alterations of the Indenture and
of the rights and obligations of the Company and the rights of the holders of
the bonds and coupons; provided, however, that no such modification or
alteration shall be made without the written approval or consent of the holder
hereof which will (a) extend the maturity of this bond or reduce the rate or
extend the time of payment of interest hereon or reduce the amount of the
principal hereof, or (b) permit the creation of any lien, not otherwise
permitted, prior to or on a parity with the lien of the Indenture, or (c) reduce
the percentage of the principal amount of the bonds the holders of which are
required to approve any such supplemental indenture.

      The Company reserves the right, without any consent, vote or other action
by holders of the 2004-1 Collateral Bonds or any other series created after the
Sixty-eighth Supplemental Indenture, to amend the Indenture to reduce the
percentage of the principal amount of bonds the holders of which are required to
approve any supplemental indenture (other than any supplemental indenture which
is subject to the proviso contained in the immediately preceding sentence) (a)
from not less than seventy-five per centum (including sixty per centum of each
series affected) to not less than a majority in principal amount of the bonds at
the time outstanding or (b) in case fewer than all series are affected, not less
than a majority in principal amount of the bonds of all affected series, voting
together.

      No recourse shall be had for the payment of the principal of or interest
on this bond, or for any claim based hereon, or otherwise in respect hereof or
of the Indenture, to or against any incorporator, stockholder, director or
officer, past, present or future, as such, of the Company, or of any predecessor
or successor company, either directly or through the Company, or such
predecessor or successor company, or otherwise, 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, as such, being waived and released by the holder and owner hereof by
the acceptance of this bond and being likewise waived and released by the terms
of the Indenture.

      This bond shall be exchangeable for other registered bonds of the same
series, in the manner and upon the conditions prescribed in the Indenture, upon
the surrender of such bonds at the Investor Services Department of the Company,
as transfer agent. However, notwithstanding the provisions of Section 2.05 of
the Indenture, no charge shall be made upon any registration of transfer or
exchange of bonds of said series other than for any tax or taxes or other
governmental charge required to be paid by the Company.

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      The Agent shall surrender this bond to the Trustee when all of the
principal of and interest on the Loans and Reimbursement Obligations arising
under the Credit Agreement, and all of the fees payable pursuant to the Credit
Agreement with respect to the Obligations shall have been duly paid, and the
Credit Agreement shall have been terminated.

                         [END OF FORM OF REGISTERED BOND

                         OF THE 2004-1 COLLATERAL BONDS]

      AND WHEREAS all acts and things necessary to make the 2004-1 Collateral
Bonds (the "Collateral Bonds"), when duly executed by the Company and
authenticated by the Trustee or its agent and issued as prescribed in the
Indenture, as heretofore supplemented and amended, and this Supplemental
Indenture provided, the valid, binding and legal obligations of the Company, and
to constitute the Indenture, as supplemented and amended as aforesaid, as well
as by this Supplemental Indenture, a valid, binding and legal instrument for the
security thereof, have been done and performed, and the creation, execution and
delivery of this Supplemental Indenture and the creation, execution and issuance
of bonds subject to the terms hereof and of the Indenture, as so supplemented
and amended, have in all respects been duly authorized;

      NOW, THEREFORE, in consideration of the premises, of the acceptance and
purchase by the holders thereof of the bonds issued and to be issued under the
Indenture, as supplemented and amended as above set forth, and of the sum of One
Dollar duly paid by the Trustee to the Company, and of other good and valuable
considerations, the receipt whereof is hereby acknowledged, and for the purpose
of securing the due and punctual payment of the principal of and premium, if
any, and interest on all bonds now outstanding under the Indenture and the
$500,000,000 principal amount of the Collateral Bonds and all other bonds which
shall be issued under the Indenture, as supplemented and amended from time to
time, and for the purpose of securing the faithful performance and observance of
all covenants and conditions therein, and in any indenture supplemental thereto,
set forth, the Company has given, granted, bargained, sold, released,
transferred, assigned, hypothecated, pledged, mortgaged, confirmed, set over,
warranted, alienated and conveyed and by these presents does give, grant,
bargain, sell, release, transfer, assign, hypothecate, pledge, mortgage,
confirm, set over, warrant, alien and convey unto JPMorgan Chase Bank, as
Trustee, as provided in the Indenture, and its successor or successors in the
trust thereby and hereby created and to its or their assigns forever, all the
right, title and interest of the Company in and to all the property, described
in Section 11 hereof, together (subject to the provisions of Article X of the
Indenture) with the tolls, rents, revenues, issues, earnings, income, products
and profits thereof, excepting, however, the property, interests and rights
specifically excepted from the lien of the Indenture as set forth in the
Indenture.

      TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in any wise appertaining to the premises, property,
franchises and rights, or any thereof, referred to in the foregoing granting
clause, with the reversion and reversions, remainder and remainders and (subject
to the provisions of Article X of the Indenture) the tolls, rents, revenues,
issues, earnings, income, products and profits thereof, and all the estate,
right, title and interest and claim whatsoever, at law as well as in equity,
which the Company now has or may

                                      -8-
<PAGE>

hereafter acquire in and to the aforesaid premises, property, franchises and
rights and every part and parcel thereof.

      SUBJECT, HOWEVER, with respect to such premises, property, franchises and
rights, to excepted encumbrances as said term is defined in Section 1.02 of the
Indenture, and subject also to all defects and limitations of title and to all
encumbrances existing at the time of acquisition. TO HAVE AND TO HOLD all said
premises, property, franchises and rights hereby conveyed, assigned, pledged or
mortgaged, or intended so to be, unto the Trustee, its successor or successors
in trust and their assigns forever;

      BUT IN TRUST, NEVERTHELESS, with power of sale for the equal and
proportionate benefit and security of the holders of all bonds now or hereafter
authenticated and delivered under and secured by the Indenture and interest
coupons appurtenant thereto, pursuant to the provisions of the Indenture and of
any supplemental indenture, and for the enforcement of the payment of said bonds
and coupons when payable and the performance of and compliance with the
covenants and conditions of the Indenture and of any supplemental indenture,
without any preference, distinction or priority as to lien or otherwise of any
bond or bonds over others by reason of the difference in time of the actual
authentication, delivery, issue, sale or negotiation thereof or for any other
reason whatsoever, except as otherwise expressly provided in the Indenture; and
so that each and every bond now or hereafter authenticated and delivered
thereunder shall have the same lien, and so that the principal of and premium,
if any, and interest on every such bond shall, subject to the terms thereof, be
equally and proportionately secured, as if it had been made, executed,
authenticated, delivered, sold and negotiated simultaneously with the execution
and delivery thereof.

      AND IT IS EXPRESSLY DECLARED by the Company that all bonds authenticated
and delivered under and secured by the Indenture, as supplemented and amended as
above set forth, are to be issued, authenticated and delivered, and all said
premises, property, franchises and rights hereby and by the Indenture and
indentures supplemental thereto conveyed, assigned, pledged or mortgaged, or
intended so to be, are to be dealt with and disposed of under, upon and subject
to the terms, conditions, stipulations, covenants, agreements, trusts, uses and
purposes expressed in the Indenture, as supplemented and amended as above set
forth, and the parties hereto mutually agree as follows:

      SECTION 1. There is hereby created a series of bonds (the "2004-1 Interest
Bearing Collateral Bonds") designated as hereinabove provided, which shall also
bear the descriptive title "First Mortgage Bond", and the form thereof shall be
substantially as hereinbefore set forth (the "Sample Bond"). The 2004-1 Interest
Bearing Collateral Bonds shall be issued in the aggregate principal amount of
$500,000,000, shall mature on the Termination Date (as such term is defined in
the Credit Agreement) and shall be issued only as registered bonds without
coupons in denominations of $1,000 and any multiple thereof. The serial numbers
of the Collateral Bonds shall be such as may be approved by any officer of the
Company, the execution thereof by any such officer either manually or by
facsimile signature to be conclusive evidence of such approval. The Collateral
Bonds are to be issued to and registered in the name of the Agent under the
Credit Agreement (as such terms are defined in the Sample Bond) to evidence and
secure any and all Obligations (as such term is defined in the Credit Agreement)
of the Company under the Credit Agreement.

                                      -9-
<PAGE>

      The 2004-1 Collateral Bonds shall bear interest as set forth in the Sample
Bond. The principal of and the interest on said bonds shall be payable as set
forth in the Sample Bond.

      The obligation of the Company to make payments with respect to the
principal of 2004-1 Interest Bearing Collateral Bonds shall be fully or
partially, as the case may be, satisfied and discharged to the extent that, at
the time that any such payment shall be due, the then due principal of the Loans
and/or the Reimbursement Obligations included in the the Obligations shall have
been fully or partially paid. Satisfaction of any obligation to the extent that
payment is made with respect to the Loans and/or the Reimbursement Obligations
means that if any payment is made on the principal of the Loans and/or the
Reimbursement Obligations, a corresponding payment obligation with respect to
the principal of the 2004-1 Collateral Bonds shall be deemed discharged in the
same amount as the payment with respect to the Loans and/or the Reimbursement
Obligations discharges the outstanding obligation with respect to such Loans
and/or Reimbursement Obligations. No such payment of principal shall reduce the
principal amount of the 2004-1 Collateral Bonds.

      The obligation of the Company to make payments with respect to the
interest on 2004-1 Collateral Bonds shall be fully or partially, as the case may
be, satisfied and discharged to the extent that, at the time that any such
payment shall be due, the then due interest and/or fees under the Credit
Agreement, shall have been fully or partially paid. Satisfaction of any
obligation to the extent that payment is made with respect to the interest
and/or fees under the Credit Agreement means that if any payment is made on the
interest and/or fees under the Credit Agreement, a corresponding payment
obligation with respect to the interest on the 2004-1 Collateral Bonds shall be
deemed discharged in the same amount as the payment with respect to the interest
and/or fees discharges the outstanding obligation with respect to such interest
and/or fees.

      The Trustee may at any time and all times conclusively assume that the
obligation of the Company to make payments with respect to the principal of and
interest on the Collateral Bonds, so far as such payments at the time have
become due, has been fully satisfied and discharged unless and until the Trustee
shall have received a written notice from the Agent stating (i) that timely
payment of principal and interest on the 2004-1 Collateral Bonds has not been
made, (ii) that the Company is in arrears as to the payments required to be made
by it to the Agent pursuant to the Credit Agreement, and (iii) the amount of the
arrearage.

      The Collateral Bonds shall be exchangeable for other registered bonds of
the same series, in the manner and upon the conditions prescribed in the
Indenture, upon the surrender of such bonds at the Investor Services Department
of the Company, as transfer agent. However, notwithstanding the provisions of
Section 2.05 of the Indenture, no charge shall be made upon any registration of
transfer or exchange of bonds of said series other than for any tax or taxes or
other governmental charge required to be paid by the Company.

      SECTION 2. The Collateral Bonds are not redeemable by the operation of the
maintenance and replacement provisions of this Indenture or with the proceeds of
released property.

      SECTION 3. Upon the occurrence of an Event of Default under the Credit
Agreement and the acceleration of the Obligations, the Collateral Bonds shall be
redeemable in whole upon

                                      -10-
<PAGE>

receipt by the Trustee of a written demand from the Agent stating that there has
occurred under the Credit Agreement both an Event of Default and a declaration
of acceleration of the Obligations and demanding redemption of the Collateral
Bonds (including a description of the amount of principal, interest and fees
which comprise such Obligations). The Company waives any right it may have to
prior notice of such redemption under the Indenture. Upon surrender of the
Collateral Bonds by the Agent to the Trustee, the Collateral Bonds shall be
redeemed at a redemption price equal to the aggregate amount of the Obligations.

      SECTION 4. The Company reserves the right, without any consent, vote or
other action by the holder of the Collateral Bonds or of any subsequent series
of bonds issued under the Indenture, to make such amendments to the Indenture,
as supplemented, as shall be necessary in order to amend Section 17.02 to read
as follows:

            SECTION 17.02. With the consent of the holders of not less than a
      majority in principal amount of the bonds at the time outstanding or their
      attorneys-in-fact duly authorized, or, if fewer than all series are
      affected, not less than a majority in principal amount of the bonds at the
      time outstanding of each series the rights of the holders of which are
      affected, voting together, the Company, when authorized by a resolution,
      and the Trustee may from time to time and at any time enter into an
      indenture or indentures supplemental hereto for the purpose of adding any
      provisions to or changing in any manner or eliminating any of the
      provisions of this Indenture or of any supplemental indenture or modifying
      the rights and obligations of the Company and the rights of the holders of
      any of the bonds and coupons; provided, however, that no such supplemental
      indenture shall (1) extend the maturity of any of the bonds or reduce the
      rate or extend the time of payment of interest thereon, or reduce the
      amount of the principal thereof, or reduce any premium payable on the
      redemption thereof, without the consent of the holder of each bond so
      affected, or (2) permit the creation of any lien, not otherwise permitted,
      prior to or on a parity with the lien of this Indenture, without the
      consent of the holders of all the bonds then outstanding, or (3) reduce
      the aforesaid percentage of the principal amount of bonds the holders of
      which are required to approve any such supplemental indenture, without the
      consent of the holders of all the bonds then outstanding. For the purposes
      of this Section, bonds shall be deemed to be affected by a supplemental
      indenture if such supplemental indenture adversely affects or diminishes
      the rights of holders thereof against the Company or against its property.
      The Trustee may in its discretion determine whether or not, in accordance
      with the foregoing, bonds of any particular series would be affected by
      any supplemental indenture and any such determination shall be conclusive
      upon the holders of bonds of such series and all other series. Subject to
      the provisions of Sections 16.02 and 16.03 hereof, the Trustee shall not
      be liable for any determination made in good faith in connection herewith.

            Upon the written request of the Company, accompanied by a resolution
      authorizing the execution of any such supplemental indenture, and upon the
      filing with the Trustee of evidence of the consent of bondholders as
      aforesaid (the instrument or instruments evidencing such consent to be
      dated within one year of

                                      -11-
<PAGE>

      such request), the Trustee shall join with the Company in the execution of
      such supplemental indenture unless such supplemental indenture affects the
      Trustee's own rights, duties or immunities under this Indenture or
      otherwise, in which case the Trustee may in its discretion but shall not
      be obligated to enter into such supplemental indenture.

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

            The Company and the Trustee, if they so elect, and either before or
      after such consent has been obtained, may require the holder of any bond
      consenting to the execution of any such supplemental indenture to submit
      his bond to the Trustee or to ask such bank, banker or trust company as
      may be designated by the Trustee for the purpose, for the notation thereon
      of the fact that the holder of such bond has consented to the execution of
      such supplemental indenture, and in such case such notation, in form
      satisfactory to the Trustee, shall be made upon all bonds so submitted,
      and such bonds bearing such notation shall forthwith be returned to the
      persons entitled thereto.

            Prior to the execution by the Company and the Trustee of any
      supplemental indenture pursuant to the provisions of this Section, the
      Company shall publish a notice, setting forth in general terms the
      substance of such supplemental indenture, at least once in one daily
      newspaper of general circulation in each city in which the principal of
      any of the bonds shall be payable, or, if all bonds outstanding shall be
      registered bonds without coupons or coupon bonds registered as to
      principal, such notice shall be sufficiently given if mailed, first class,
      postage prepaid, and registered if the Company so elects, to each
      registered holder of bonds at the last address of such holder appearing on
      the registry books, such publication or mailing, as the case may be, to be
      made not less than thirty days prior to such execution. Any failure of the
      Company to give such notice, or any defect therein, shall not, however, in
      any way impair or affect the validity of any such supplemental indenture.

      SECTION 5. As supplemented and amended as above set forth, the Indenture
is in all respects ratified and confirmed, and the Indenture and all indentures
supplemental thereto shall be read, taken and construed as one and the same
instrument.

      SECTION 6. Nothing contained in this Supplemental Indenture shall, or
shall be construed to, confer upon any person other than a holder of bonds
issued under the Indenture, as supplemented and amended as above set forth, the
Company, the Trustee and the Agent, for the benefit of the Banks (as such term
is defined in the Credit Agreement), any right or interest to avail himself of
any benefit under any provision of the Indenture, as so supplemented and
amended.

      SECTION 7. The Trustee assumes no responsibility for or in respect of the
validity or sufficiency of this Supplemental Indenture or of the Indenture as
hereby supplemented or the due execution hereof by the Company or for or in
respect of the recitals and statements contained

                                      -12-
<PAGE>

herein (other than those contained in the sixth, seventh and eighth recitals
hereof), all of which recitals and statements are made solely by the Company.

        SECTION 8. This Supplemental Indenture may be simultaneously executed in
several counterparts and all such counterparts executed and delivered, each as
an original, shall constitute but one and the same instrument.

        SECTION 9. In the event the date of any notice required or permitted
hereunder shall not be a Business Day, then (notwithstanding any other provision
of the Indenture or of any supplemental indenture thereto) such notice need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the date fixed for such notice.
"Business Day" means, with respect to this Section 9, any day, other than a
Saturday or Sunday, on which banks generally are open in Chicago, Illinois and
New York, New York for the conduct of substantially all of their commercial
lending activities and on which interbank wire transfers can be made on the
Fedwire system.

        SECTION 10. This Supplemental Indenture and the Collateral Bonds shall
be governed by and deemed to be a contract under, and construed in accordance
with, the laws of the State of Michigan, and for all purposes shall be construed
in accordance with the laws of such state, except as may otherwise be required
by mandatory provisions of law.

      SECTION 11. Detailed Description of Property Mortgaged:

                                       I.

                       ELECTRIC GENERATING PLANTS AND DAMS

      All the electric generating plants and stations of the Company,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture, including all powerhouses, buildings, reservoirs, dams,
pipelines, flumes, structures and works and the land on which the same are
situated and all water rights and all other lands and easements, rights of way,
permits, privileges, towers, poles, wires, machinery, equipment, appliances,
appurtenances and supplies and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with such
plants and stations or any of them, or adjacent thereto.

                                       II.

                           ELECTRIC TRANSMISSION LINES

      All the electric transmission lines of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including towers, poles, pole lines, wires, switches, switch racks,
switchboards, insulators and other appliances and equipment, and all other
property, real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with such transmission lines or any of them or
adjacent thereto; together with all real property, rights of way, easements,
permits, privileges, franchises and rights for or relating to the construction,
maintenance or operation thereof, through, over, under or upon any private

                                      -13-
<PAGE>

property or any public streets or highways, within as well as without the
corporate limits of any municipal corporation. Also all the real property,
rights of way, easements, permits, privileges and rights for or relating to the
construction, maintenance or operation of certain transmission lines, the land
and rights for which are owned by the Company, which are either not built or now
being constructed.

                                      III.

                          ELECTRIC DISTRIBUTION SYSTEMS

      All the electric distribution systems of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including substations, transformers, switchboards, towers, poles, wires,
insulators, subways, trenches, conduits, manholes, cables, meters and other
appliances and equipment, and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with such
distribution systems or any of them or adjacent thereto; together with all real
property, rights of way, easements, permits, privileges, franchises, grants and
rights, for or relating to the construction, maintenance or operation thereof,
through, over, under or upon any private property or any public streets or
highways within as well as without the corporate limits of any municipal
corporation.

                                       IV.

               ELECTRIC SUBSTATIONS, SWITCHING STATIONS AND SITES

      All the substations, switching stations and sites of the Company,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture, for transforming, regulating, converting or distributing or
otherwise controlling electric current at any of its plants and elsewhere,
together with all buildings, transformers, wires, insulators and other
appliances and equipment, and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with any
of such substations and switching stations, or adjacent thereto, with sites to
be used for such purposes.

                                       V.

        GAS COMPRESSOR STATIONS, GAS PROCESSING PLANTS, DESULPHURIZATION
         STATIONS, METERING STATIONS, ODORIZING STATIONS, REGULATORS AND
                                     SITES

      All the compressor stations, processing plants, desulphurization stations,
metering stations, odorizing stations, regulators and sites of the Company,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture, for compressing, processing, desulphurizing, metering, odorizing
and regulating manufactured or natural gas at any of its plants and elsewhere,
together with all buildings, meters and other appliances and equipment, and all
other property, real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with any of such purposes, with sites to be
used for such purposes.

                                      -14-
<PAGE>

                                       VI.

                               GAS STORAGE FIELDS

      The natural gas rights and interests of the Company, including wells and
well lines (but not including natural gas, oil and minerals), the gas gathering
system, the underground gas storage rights, the underground gas storage wells
and injection and withdrawal system used in connection therewith, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture:
In the Overisel Gas Storage Field, located in the Township of Overisel, Allegan
County, and in the Township of Zeeland, Ottawa County, Michigan; in the
Northville Gas Storage Field located in the Township of Salem, Washtenaw County,
Township of Lyon, Oakland County, and the Townships of Northville and Plymouth
and City of Plymouth, Wayne County, Michigan; in the Salem Gas Storage Field,
located in the Township of Salem, Allegan County, and in the Township of
Jamestown, Ottawa County, Michigan; in the Ray Gas Storage Field, located in the
Townships of Ray and Armada, Macomb County, Michigan; in the Lenox Gas Storage
Field, located in the Townships of Lenox and Chesterfield, Macomb County,
Michigan; in the Ira Gas Storage Field, located in the Township of Ira, St.
Clair County, Michigan; in the Puttygut Gas Storage Field, located in the
Township of Casco, St. Clair County, Michigan; in the Four Corners Gas Storage
Field, located in the Townships of Casco, China, Cottrellville and Ira, St.
Clair County, Michigan; in the Swan Creek Gas Storage Field, located in the
Township of Casco and Ira, St. Clair County, Michigan; and in the Hessen Gas
Storage Field, located in the Townships of Casco and Columbus, St. Clair,
Michigan.

                                      VII.

                             GAS TRANSMISSION LINES

      All the gas transmission lines of the Company, constructed or otherwise
acquired by it and not heretofore described in the Indenture or any supplement
thereto and not heretofore released from the lien of the Indenture, including
gas mains, pipes, pipelines, gates, valves, meters and other appliances and
equipment, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with such
transmission lines or any of them or adjacent thereto; together with all real
property, right of way, easements, permits, privileges, franchises and rights
for or relating to the construction, maintenance or operation thereof, through,
over, under or upon any private property or any public streets or highways,
within as well as without the corporate limits of any municipal corporation.

                                      VIII.

                            GAS DISTRIBUTION SYSTEMS

      All the gas distribution systems of the Company, constructed or otherwise
acquired by it and not heretofore described in the Indenture or any supplement
thereto and not heretofore released from the lien of the Indenture, including
tunnels, conduits, gas mains and pipes, service pipes, fittings, gates, valves,
connections, meters and other appliances and equipment, and all other property,
real or personal, forming a part of or appertaining to or used, occupied or
enjoyed in connection with such distribution systems or any of them or adjacent
thereto; together with all

                                      -15-
<PAGE>

real property, rights of way, easements, permits, privileges, franchises, grants
and rights, for or relating to the construction, maintenance or operation
thereof, through, over, under or upon any private property or any public streets
or highways within as well as without the corporate limits of any municipal
corporation.

                                       IX.

               OFFICE BUILDINGS, SERVICE BUILDINGS, GARAGES, ETC.

      All office, garage, service and other buildings of the Company, wherever
located, in the State of Michigan, constructed or otherwise acquired by it and
not heretofore described in the Indenture or any supplement thereto and not
heretofore released from the lien of the Indenture, together with the land on
which the same are situated and all easements, rights of way and appurtenances
to said lands, together with all furniture and fixtures located in said
buildings.

                                       X.

                            TELEPHONE PROPERTIES AND
                         RADIO COMMUNICATION EQUIPMENT

      All telephone lines, switchboards, systems and equipment of the Company,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture, used or available for use in the operation of its properties, and
all other property, real or personal, forming a part of or appertaining to or
used, occupied or enjoyed in connection with such telephone properties or any of
them or adjacent thereto; together with all real estate, rights of way,
easements, permits, privileges, franchises, property, devices or rights related
to the dispatch, transmission, reception or reproduction of messages,
communications, intelligence, signals, light, vision or sound by electricity,
wire or otherwise, including all telephone equipment installed in buildings used
as general and regional offices, substations and generating stations and all
telephone lines erected on towers and poles; and all radio communication
equipment of the Company, together with all property, real or personal (except
any in the Indenture expressly excepted), fixed stations, towers, auxiliary
radio buildings and equipment, and all appurtenances used in connection
therewith, wherever located, in the State of Michigan.

                                       XI.

                               OTHER REAL PROPERTY

      All other real property of the Company and all interests therein, of every
nature and description (except any in the Indenture expressly excepted) wherever
located, in the State of Michigan, acquired by it and not heretofore described
in the Indenture or any supplement thereto and not heretofore released from the
lien of the Indenture. Such real property includes but is not limited to the
following described property, such property is subject to any interests that
were excepted or reserved in the conveyance to the Company:

                                      -16-
<PAGE>

                                  ALCONA COUNTY

      Certain land in Caledonia Township, Alcona County, Michigan described as:

            The East 330 feet of the South 660 feet of the SW 1/4 of the SW 1/4
      of Section 8, T28N, R8E, except the West 264 feet of the South 330 feet
      thereof; said land being more particularly described as follows: To find
      the place of beginning of this description, commence at the Southwest
      corner of said section, run thence East along the South line of said
      section 1243 feet to the place of beginning of this description, thence
      continuing East along said South line of said section 66 feet to the West
      1/8 line of said section, thence N 02 degrees 09' 30" E along the said
      West 1/8 line of said section 660 feet, thence West 330 feet, thence S 02
      degrees 09' 30" W, 330 feet, thence East 264 feet, thence S 02 degrees 09'
      30" W, 330 feet to the place of beginning.

                                 ALLEGAN COUNTY

      Certain land in Lee Township, Allegan County, Michigan described as:

            The NE 1/4 of the NW 1/4 of Section 16, T1N, R15W.

                                  ALPENA COUNTY

      Certain land in Wilson and Green Townships, Alpena County, Michigan
      described as:

            All that part of the S'ly 1/2 of the former Boyne City-Gaylord and
      Alpena Railroad right of way, being the Southerly 50 feet of a 100 foot
      strip of land formerly occupied by said Railroad, running from the East
      line of Section 31, T31N, R7E, Southwesterly across said Section 31 and
      Sections 5 and 6 of T30N, R7E and Sections 10, 11 and the E 1/2 of Section
      9, except the West 1646 feet thereof, all in T30N, R6E.

                                  ANTRIM COUNTY

      Certain land in Mancelona Township, Antrim County, Michigan described as:

            The S 1/2 of the NE 1/4 of Section 33, T29N, R6W, excepting
      therefrom all mineral, coal, oil and gas and such other rights as were
      reserved unto the State of Michigan in that certain deed running from the
      State of Michigan to August W. Schack and Emma H. Schack, his wife, dated
      April 15, 1946 and recorded May 20, 1946 in Liber 97 of Deeds on page 682
      of Antrim County Records.

                                  ARENAC COUNTY

      Certain land in Standish Township, Arenac County, Michigan described as:

            A parcel of land in the SW 1/4 of the NW 1/4 of Section 12, T18N,
      R4E, described as follows: To find the place of beginning of said parcel
      of land,

                                      -17-
<PAGE>

      commence at the Northwest corner of Section 12, T18N, R4E; run thence
      South along the West line of said section, said West line of said section
      being also the center line of East City Limits Road 2642.15 feet to the W
      1/4 post of said section and the place of beginning of said parcel of
      land; running thence N 88 degrees 26' 00" E along the East and West 1/4
      line of said section, 660.0 feet; thence North parallel with the West line
      of said section, 310.0 feet; thence S 88 degrees 26' 00" W, 330.0 feet;
      thence South parallel with the West line of said section, 260.0 feet;
      thence S 88 degrees 26' 00" W, 330.0 feet to the West line of said section
      and the center line of East City Limits Road; thence South along the said
      West line of said section, 50.0 feet to the place of beginning.

                                  BARRY COUNTY

      Certain land in Johnstown Township, Barry County, Michigan described as:

            A strip of land 311 feet in width across the SW 1/4 of the NE 1/4 of
      Section 31, T1N, R8W, described as follows: To find the place of beginning
      of this description, commence at the E 1/4 post of said section; run
      thence N 00 degrees 55' 00" E along the East line of said section, 555.84
      feet; thence N 59 degrees 36' 20" W, 1375.64 feet; thence N 88 degrees 30'
      00" W, 130 feet to a point on the East 1/8 line of said section and the
      place of beginning of this description; thence continuing N 88 degrees 30'
      00" W, 1327.46 feet to the North and South 1/4 line of said section;
      thence S 00 degrees 39'35" W along said North and South 1/4 line of said
      section, 311.03 feet to a point, which said point is 952.72 feet distant
      N'ly from the East and West 1/4 line of said section as measured along
      said North and South 1/4 line of said section; thence S 88 degrees 30' 00"
      E, 1326.76 feet to the East 1/8 line of said section; thence N 00 degrees
      47' 20" E along said East 1/8 line of said section, 311.02 feet to the
      place of beginning.

                                   BAY COUNTY

      Certain land in Frankenlust Township, Bay County, Michigan described as:

            The South 250 feet of the N 1/2 of the W 1/2 of the W 1/2 of the SE
      1/4 of Section 9, T13N, R4E.

                                  BENZIE COUNTY

      Certain land in Benzonia Township, Benzie County, Michigan described as:

            A parcel of land in the Northeast 1/4 of Section 7, Township 26
      North, Range 14 West, described as beginning at a point on the East line
      of said Section 7, said point being 320 feet North measured along the East
      line of said section from the East 1/4 post; running thence West 165 feet;
      thence North parallel with the East line of said section 165 feet; thence
      East 165 feet to the East line of said section; thence South 165 feet to
      the place of beginning.

                                      -18-
<PAGE>

                                  BRANCH COUNTY

      Certain land in Girard Township, Branch County, Michigan described as:

            A parcel of land in the NE 1/4 of Section 23 T5S, R6W, described as
      beginning at a point on the North and South quarter line of said section
      at a point 1278.27 feet distant South of the North quarter post of said
      section, said distance being measured along the North and South quarter
      line of said section, running thence S89 degrees21'E 250 feet, thence
      North along a line parallel with the said North and South quarter line of
      said section 200 feet, thence N89 degrees21'W 250 feet to the North and
      South quarter line of said section, thence South along said North and
      South quarter line of said section 200 feet to the place of beginning.

                                 CALHOUN COUNTY

      Certain land in Convis Township, Calhoun County, Michigan described as:

            A parcel of land in the SE 1/4 of the SE 1/4 of Section 32, T1S,
      R6W, described as follows: To find the place of beginning of this
      description, commence at the Southeast corner of said section; run thence
      North along the East line of said section 1034.32 feet to the place of
      beginning of this description; running thence N 89 degrees 39' 52" W,
      333.0 feet; thence North 290.0 feet to the South 1/8 line of said section;
      thence S 89 degrees 39' 52" E along said South 1/8 line of said section
      333.0 feet to the East line of said section; thence South along said East
      line of said section 290.0 feet to the place of beginning. (Bearings are
      based on the East line of Section 32, T1S, R6W, from the Southeast corner
      of said section to the Northeast corner of said section assumed as North.)

                                   CASS COUNTY

      Certain easement rights located across land in Marcellus Township, Cass
County, Michigan described as:

            The East 6 rods of the SW 1/4 of the SE 1/4 of Section 4, T5S, R13W.

                                CHARLEVOIX COUNTY

      Certain land in South Arm Township, Charlevoix County, Michigan described
      as:

            A parcel of land in the SW 1/4 of Section 29, T32N, R7W, described
      as follows: Beginning at the Southwest corner of said section and running
      thence North along the West line of said section 788.25 feet to a point
      which is 528 feet distant South of the South 1/8 line of said section as
      measured along the said West line of said section; thence N 89 degrees 30'
      19" E, parallel with said South 1/8 line of said section 442.1 feet;
      thence South 788.15 feet to the South line of said section; thence S 89
      degrees 29' 30" W, along said South line of said section 442.1 feet to the
      place of beginning.

                                      -19-
<PAGE>

                                CHEBOYGAN COUNTY

      Certain land in Inverness Township, Cheboygan County, Michigan described
      as:

            A parcel of land in the SW frl 1/4 of Section 31, T37N, R2W,
      described as beginning at the Northwest corner of the SW frl 1/4, running
      thence East on the East and West quarter line of said Section, 40 rods,
      thence South parallel to the West line of said Section 40 rods, thence
      West 40 rods to the West line of said Section, thence North 40 rods to the
      place of beginning.

                                  CLARE COUNTY

      Certain land in Frost Township, Clare County, Michigan described as:

            The East 150 feet of the North 225 feet of the NW 1/4 of the NW 1/4
      of Section 15, T20N, R4W.

                                 CLINTON COUNTY

      Certain land in Watertown Township, Clinton County, Michigan described as:

            The NE 1/4 of the NE 1/4 of the SE 1/4 of Section 22, and the North
      165 feet of the NW 1/4 of the NE 1/4 of the SE 1/4 of Section 22, T5N,
      R3W.

                                 CRAWFORD COUNTY

      Certain land in Lovells Township, Crawford County, Michigan described as:

            A parcel of land in Section 1, T28N, R1W, described as: Commencing
      at NW corner said section; thence South 89 degrees53'30" East along North
      section line 105.78 feet to point of beginning; thence South 89
      degrees53'30" East along North section line 649.64 feet; thence South 55
      degrees 42'30" East 340.24 feet; thence South 55 degrees 44' 37"" East
      5,061.81 feet to the East section line; thence South 00 degrees 00' 08""
      West along East section line 441.59 feet; thence North 55 degrees 44' 37"
      West 5,310.48 feet; thence North 55 degrees 42'30" West 877.76 feet to
      point of beginning.

                                  EATON COUNTY

      Certain land in Eaton Township, Eaton County, Michigan described as:

            A parcel of land in the SW 1/4 of Section 6, T2N, R4W, described as
      follows: To find the place of beginning of this description commence at
      the Southwest corner of said section; run thence N 89 degrees 51' 30" E
      along the South line of said section 400 feet to the place of beginning of
      this description; thence continuing N 89 degrees 51' 30" E, 500 feet;
      thence N 00 degrees 50' 00" W, 600 feet; thence S 89 degrees 51' 30" W
      parallel with the South line of said section 500 feet; thence S 00 degrees
      50' 00" E, 600 feet to the place of beginning.

                                      -20-
<PAGE>

                                  EMMET COUNTY

      Certain land in Wawatam Township, Emmet County, Michigan described as:

            The West 1/2 of the Northeast 1/4 of the Northeast 1/4 of Section
      23, T39N, R4W.

                                 GENESEE COUNTY

      Certain land in Argentine Township, Genesee County, Michigan described as:

            A parcel of land of part of the SW 1/4 of Section 8, T5N, R5E, being
      more particularly described as follows:

            Beginning at a point of the West line of Duffield Road, 100 feet
      wide, (as now established) distant 829.46 feet measured N01 degrees42'56"W
      and 50 feet measured S88 degrees14'04"W from the South quarter corner,
      Section 8, T5N, R5E; thence S88 degrees14'04"W a distance of 550 feet;
      thence N01 degrees42'56"W a distance of 500 feet to a point on the North
      line of the South half of the Southwest quarter of said Section 8; thence
      N88 degrees14'04"E along the North line of South half of the Southwest
      quarter of said Section 8 a distance 550 feet to a point on the West line
      of Duffield Road, 100 feet wide (as now established); thence S01
      degrees42'56"E along the West line of said Duffield Road a distance of 500
      feet to the point of beginning.

                                 GLADWIN COUNTY

      Certain land in Secord Township, Gladwin County, Michigan described as:

            The East 400 feet of the South 450 feet of Section 2, T19N, R1E.

                              GRAND TRAVERSE COUNTY

      Certain land in Mayfield Township, Grand Traverse County, Michigan
      described as:

            A parcel of land in the Northwest 1/4 of Section 3, T25N, R11W,
      described as follows: Commencing at the Northwest corner of said section,
      running thence S 89 degrees19'15" E along the North line of said section
      and the center line of Clouss Road 225 feet, thence South 400 feet, thence
      N 89 degrees19'15" W 225 feet to the West line of said section and the
      center line of Hannah Road, thence North along the West line of said
      section and the center line of Hannah Road 400 feet to the place of
      beginning for this description.

                                      -21-
<PAGE>

                                 GRATIOT COUNTY

      Certain land in Fulton Township, Gratiot County, Michigan described as:

            A parcel of land in the NE 1/4 of Section 7, Township 9 North, Range
      3 West, described as beginning at a point on the North line of George
      Street in the Village of Middleton, which is 542 feet East of the North
      and South one-quarter (1/4) line of said Section 7; thence North 100 feet;
      thence East 100 feet; thence South 100 feet to the North line of George
      Street; thence West along the North line of George Street 100 feet to
      place of beginning.

                                HILLSDALE COUNTY

      Certain land in Litchfield Village, Hillsdale County, Michigan described
      as:

            Lot 238 of Assessors Plat of the Village of Litchfield.

                                  HURON COUNTY

      Certain easement rights located across land in Sebewaing Township, Huron
County, Michigan described as:

            The North 1/2 of the Northwest 1/4 of Section 15, T15N, R9E.

                                  INGHAM COUNTY

      Certain land in Vevay Township, Ingham County, Michigan described as:

            A parcel of land 660 feet wide in the Southwest 1/4 of Section 7
      lying South of the centerline of Sitts Road as extended to the North-South
      1/4 line of said Section 7, T2N, R1W, more particularly described as
      follows: Commence at the Southwest corner of said Section 7, thence North
      along the West line of said Section 2502.71 feet to the centerline of
      Sitts Road; thence South 89 degrees54'45" East along said centerline
      2282.38 feet to the place of beginning of this description; thence
      continuing South 89 degrees54'45" East along said centerline and said
      centerline extended 660.00 feet to the North-South 1/4 line of said
      section; thence South 00 degrees07'20" West 1461.71 feet; thence North 89
      degrees34'58" West 660.00 feet; thence North 00 degrees07'20" East 1457.91
      feet to the centerline of Sitts Road and the place of beginning.

                                  IONIA COUNTY

      Certain land in Sebewa Township, Ionia County, Michigan described as:

            A strip of land 280 feet wide across that part of the SW 1/4 of the
      NE 1/4 of Section 15, T5N, R6W, described as follows:

            To find the place of beginning of this description commence at the E
      1/4 corner of said section; run thence N 00 degrees 05' 38" W along the
      East line of

                                      -22-
<PAGE>

      said section, 1218.43 feet; thence S 67 degrees 18' 24" W, 1424.45 feet to
      the East 1/8 line of said section and the place of beginning of this
      description; thence continuing S 67 degrees 18' 24" W, 1426.28 feet to the
      North and South 1/4 line of said section at a point which said point is
      105.82 feet distant N'ly of the center of said section as measured along
      said North and South 1/4 line of said section; thence N 00 degrees 04' 47"
      E along said North and South 1/4 line of said section, 303.67 feet; thence
      N 67 degrees 18' 24" E, 1425.78 feet to the East 1/8 line of said section;
      thence S 00 degrees 00' 26" E along said East 1/8 line of said section,
      303.48 feet to the place of beginning. (Bearings are based on the East
      line of Section 15, T5N, R6W, from the E 1/4 corner of said section to the
      Northeast corner of said section assumed as N 00 degrees 05' 38" W.)

                                  IOSCO COUNTY

      Certain land in Alabaster Township, Iosco County, Michigan described as:

            A parcel of land in the NW 1/4 of Section 34, T21N, R7E, described
      as follows: To find the place of beginning of this description commence at
      the N 1/4 post of said section; run thence South along the North and South
      1/4 line of said section, 1354.40 feet to the place of beginning of this
      description; thence continuing South along the said North and South 1/4
      line of said section, 165.00 feet to a point on the said North and South
      1/4 line of said section which said point is 1089.00 feet distant North of
      the center of said section; thence West 440.00 feet; thence North 165.00
      feet; thence East 440.00 feet to the said North and South 1/4 line of said
      section and the place of beginning.

                                 ISABELLA COUNTY

      Certain land in Chippewa Township, Isabella County, Michigan described as:

            The North 8 rods of the NE 1/4 of the SE 1/4 of Section 29, T14N,
      R3W.

                                 JACKSON COUNTY

      Certain land in Waterloo Township, Jackson County, Michigan described as:

            A parcel of land in the North fractional part of the N fractional
      1/2 of Section 2, T1S, R2E, described as follows: To find the place of
      beginning of this description commence at the E 1/4 post of said section;
      run thence N 01 degrees 03' 40" E along the East line of said section
      1335.45 feet to the North 1/8 line of said section and the place of
      beginning of this description; thence N 89 degrees 32' 00" W, 2677.7 feet
      to the North and South 1/4 line of said section; thence S 00 degrees 59'
      25" W along the North and South 1/4 line of said section 22.38 feet to the
      North 1/8 line of said section; thence S 89 degrees 59' 10" W along the
      North 1/8 line of said section 2339.4 feet to the center line of State
      Trunkline Highway M-52; thence N 53 degrees 46' 00" W along the center
      line of said State Trunkline Highway 414.22 feet to the West line of said
      section; thence N 00 degrees 55' 10" E along the West line of said section
      74.35 feet; thence S 89

                                      -23-
<PAGE>

      degrees 32' 00" E, 5356.02 feet to the East line of said section; thence S
      01 degrees 03' 40" W along the East line of said section 250 feet to the
      place of beginning.

                                KALAMAZOO COUNTY

      Certain land in Alamo Township, Kalamazoo County, Michigan described as:

            The South 350 feet of the NW 1/4 of the NW 1/4 of Section 16, T1S,
      R12W, being more particularly described as follows: To find the place of
      beginning of this description, commence at the Northwest corner of said
      section; run thence S 00 degrees 36' 55" W along the West line of said
      section 971.02 feet to the place of beginning of this description; thence
      continuing S 00 degrees 36' 55" W along said West line of said section
      350.18 feet to the North 1/8 line of said section; thence S 87 degrees 33'
      40" E along the said North 1/8 line of said section 1325.1 feet to the
      West 1/8 line of said section; thence N 00 degrees 38' 25" E along the
      said West 1/8 line of said section 350.17 feet; thence N 87 degrees 33'
      40" W, 1325.25 feet to the place of beginning.

                                 KALKASKA COUNTY

      Certain land in Kalkaska Township, Kalkaska County, Michigan described as:

            The NW 1/4 of the SW 1/4 of Section 4, T27N, R7W, excepting
      therefrom all mineral, coal, oil and gas and such other rights as were
      reserved unto the State of Michigan in that certain deed running from the
      Department of Conservation for the State of Michigan to George Welker and
      Mary Welker, his wife, dated October 9, 1934 and recorded December 28,
      1934 in Liber 39 on page 291 of Kalkaska County Records, and subject to
      easement for pipeline purposes as granted to Michigan Consolidated Gas
      Company by first party herein on April 4, 1963 and recorded June 21, 1963
      in Liber 91 on page 631 of Kalkaska County Records.

                                   KENT COUNTY

      Certain land in Caledonia Township, Kent County, Michigan described as:

            A parcel of land in the Northwest fractional 1/4 of Section 15, T5N,
      R10W, described as follows: To find the place of beginning of this
      description commence at the North 1/4 corner of said section, run thence S
      0 degrees 59' 26" E along the North and South 1/4 line of said section
      2046.25 feet to the place of beginning of this description, thence
      continuing S 0 degrees 59' 26" E along said North and South 1/4 line of
      said section 332.88 feet, thence S 88 degrees 58' 30" W 2510.90 feet to a
      point herein designated "Point A" on the East bank of the Thornapple
      River, thence continuing S 88 degrees 53' 30" W to the center thread of
      the Thornapple River, thence NW'ly along the center thread of said
      Thornapple River to a point which said point is S 88 degrees 58' 30" W of
      a point on the East bank of the Thornapple River herein designated "Point
      B", said "Point B" being N

                                      -24-
<PAGE>

      23 degrees 41' 35" W 360.75 feet from said above-described "Point A",
      thence N 88 degrees 58' 30" E to said "Point B", thence continuing N 88
      degrees 58' 30" E 2650.13 feet to the place of beginning. (Bearings are
      based on the East line of Section 15, T5N, R10W between the East 1/4
      corner of said section and the Northeast corner of said section assumed as
      N 0 degrees 59' 55" W.)

                                   LAKE COUNTY

      Certain land in Pinora and Cherry Valley Townships, Lake County, Michigan
described as:

            A strip of land 50 feet wide East and West along and adjoining the
      West line of highway on the East side of the North 1/2 of Section 13 T18N,
      R12W. Also a strip of land 100 feet wide East and West along and adjoining
      the East line of the highway on the West side of following described land:
      The South 1/2 of NW 1/4, and the South 1/2 of the NW 1/4 of the SW 1/4,
      all in Section 6, T18N, R11W.

                                  LAPEER COUNTY

      Certain land in Hadley Township, Lapeer County, Michigan described as:

            The South 825 feet of the W 1/2 of the SW 1/4 of Section 24, T6N,
      R9E, except the West 1064 feet thereof.

                                 LEELANAU COUNTY

      Certain land in Cleveland Township, Leelanau County, Michigan described
as:

            The North 200 feet of the West 180 feet of the SW 1/4 of the SE 1/4
      of Section 35, T29N, R13W.

                                 LENAWEE COUNTY

      Certain land in Madison Township, Lenawee County, Michigan described as:

            A strip of land 165 feet wide off the West side of the following
      described premises: The E 1/2 of the SE 1/4 of Section 12. The E 1/2 of
      the NE 1/4 and the NE 1/4 of the SE 1/4 of Section 13, being all in T7S,
      R3E, excepting therefrom a parcel of land in the E 1/2 of the SE 1/4 of
      Section 12, T7S, R3E, beginning at the Northwest corner of said E 1/2 of
      the SE 1/4 of Section 12, running thence East 4 rods, thence South 6 rods,
      thence West 4 rods, thence North 6 rods to the place of beginning.

                                      -25-
<PAGE>

                                LIVINGSTON COUNTY

      Certain land in Cohoctah Township, Livingston County, Michigan described
as:

            Parcel 1

            The East 390 feet of the East 50 rods of the SW 1/4 of Section 30,
      T4N, R4E.

            Parcel 2

            A parcel of land in the NW 1/4 of Section 31, T4N, R4E, described as
      follows: To find the place of beginning of this description commence at
      the N 1/4 post of said section; run thence N 89 degrees 13' 06" W along
      the North line of said section, 330 feet to the place of beginning of this
      description; running thence S 00 degrees 52' 49" W, 2167.87 feet; thence N
      88 degrees 59' 49" W, 60 feet; thence N 00 degrees 52' 49" E, 2167.66 feet
      to the North line of said section; thence S 89 degrees 13' 06" E along
      said North line of said section, 60 feet to the place of beginning.

                                  MACOMB COUNTY

      Certain land in Macomb Township, Macomb County, Michigan described as:

            A parcel of land commencing on the West line of the E 1/2 of the NW
      1/4 of fractional Section 6, 20 chains South of the NW corner of said E
      1/2 of the NW 1/4 of Section 6; thence South on said West line and the
      East line of A. Henry Kotner's Hayes Road Subdivision #15, according to
      the recorded plat thereof, as recorded in Liber 24 of Plats, on page 7,
      24.36 chains to the East and West 1/4 line of said Section 6; thence East
      on said East and West 1/4 line 8.93 chains; thence North parallel with the
      said West line of the E 1/2 of the NW 1/4 of Section 6, 24.36 chains;
      thence West 8.93 chains to the place of beginning, all in T3N, R13E.

                                 MANISTEE COUNTY

      Certain land in Manistee Township, Manistee County, Michigan described as:

            A parcel of land in the SW 1/4 of Section 20, T22N, R16W, described
      as follows: To find the place of beginning of this description, commence
      at the Southwest corner of said section; run thence East along the South
      line of said section 832.2 feet to the place of beginning of this
      description; thence continuing East along said South line of said section
      132 feet; thence North 198 feet; thence West 132 feet; thence South 198
      feet to the place of beginning, excepting therefrom the South 2 rods
      thereof which was conveyed to Manistee Township for highway purposes by a
      Quitclaim Deed dated June 13, 1919 and recorded July 11, 1919 in Liber 88
      of Deeds on page 638 of Manistee County Records.

                                      -26-
<PAGE>

                                  MASON COUNTY

      Certain land in Riverton Township, Mason County, Michigan described as:

Parcel 1

            The South 10 acres of the West 20 acres of the S 1/2 of the NE 1/4
      of Section 22, T17N, R17W.

Parcel 2

            A parcel of land containing 4 acres of the West side of highway,
      said parcel of land being described as commencing 16 rods South of the
      Northwest corner of the NW 1/4 of the SW 1/4 of Section 22, T17N, R17W,
      running thence South 64 rods, thence NE'ly and N'ly and NW'ly along the
      W'ly line of said highway to the place of beginning, together with any and
      all right, title, and interest of Howard C. Wicklund and Katherine E.
      Wicklund in and to that portion of the hereinbefore mentioned highway
      lying adjacent to the E'ly line of said above described land.

                                 MECOSTA COUNTY

      Certain land in Wheatland Township, Mecosta County, Michigan described as:

            A parcel of land in the SW 1/4 of the SW 1/4 of Section 16, T14N,
      R7W, described as beginning at the Southwest corner of said section;
      thence East along the South line of Section 133 feet; thence North
      parallel to the West section line 133 feet; thence West 133 feet to the
      West line of said Section; thence South 133 feet to the place of
      beginning.

                                 MIDLAND COUNTY

      Certain land in Ingersoll Township, Midland County, Michigan described as:

            The West 200 feet of the W 1/2 of the NE 1/4 of Section 4, T13N,
      R2E.

                                MISSAUKEE COUNTY

      Certain land in Norwich Township, Missaukee County, Michigan described as:

            A parcel of land in the NW 1/4 of the NW 1/4 of Section 16, T24N,
      R6W, described as follows: Commencing at the Northwest corner of said
      section, running thence N 89 degrees 01' 45" E along the North line of
      said section 233.00 feet; thence South 233.00 feet; thence S 89 degrees
      01' 45" W, 233.00 feet to the West line of said section; thence North
      along said West line of said section 233.00 feet to the place of
      beginning. (Bearings are based on the West line of Section 16, T24N, R6W,
      between the Southwest and Northwest corners of said section assumed as
      North.)

                                      -27-
<PAGE>

                                  MONROE COUNTY

      Certain land in Whiteford Township, Monroe County, Michigan described as:

            A parcel of land in the SW1/4 of Section 20, T8S, R6E, described as
      follows: To find the place of beginning of this description commence at
      the S 1/4 post of said section; run thence West along the South line of
      said section 1269.89 feet to the place of beginning of this description;
      thence continuing West along said South line of said section 100 feet;
      thence N 00 degrees 50' 35" E, 250 feet; thence East 100 feet; thence S 00
      degrees 50' 35" W parallel with and 16.5 feet distant W'ly of as measured
      perpendicular to the West 1/8 line of said section, as occupied, a
      distance of 250 feet to the place of beginning.

                                 MONTCALM COUNTY

      Certain land in Crystal Township, Montcalm County, Michigan described as:

            The N 1/2 of the S 1/2 of the SE 1/4 of Section 35, T10N, R5W.

                               MONTMORENCY COUNTY

      Certain land in the Village of Hillman, Montmorency County, Michigan
described as:

            Lot 14 of Hillman Industrial Park, being a subdivision in the South
      1/2 of the Northwest 1/4 of Section 24, T31N, R4E, according to the plat
      thereof recorded in Liber 4 of Plats on Pages 32-34, Montmorency County
      Records.

                                 MUSKEGON COUNTY

      Certain land in Casnovia Township, Muskegon County, Michigan described as:

            The West 433 feet of the North 180 feet of the South 425 feet of the
      SW 1/4 of Section 3, T10N, R13W.

                                 NEWAYGO COUNTY

      Certain land in Ashland Township, Newaygo County, Michigan described as:

            The West 250 feet of the NE 1/4 of Section 23, T11N, R13W.

                                 OAKLAND COUNTY

      Certain land in Wixcom City, Oakland County, Michigan described as:

            The E 75 feet of the N 160 feet of the N 330 feet of the W 526.84
      feet of the NW 1/4 of the NW 1/4 of Section 8, T1N, R8E, more particularly
      described as follows: Commence at the NW corner of said Section 8, thence
      N 87 degrees 14' 29" E along the North line of said Section 8 a distance
      of 451.84 feet to the place of beginning for this description; thence
      continuing N 87 degrees 14' 29" E along

                                      -28-
<PAGE>

      said North section line a distance of 75.0 feet to the East line of the
      West 526.84 feet of the NW 1/4 of the NW 1/4 of said Section 8; thence S
      02 degrees 37' 09" E along said East line a distance of 160.0 feet; thence
      S 87 degrees 14' 29" W a distance of 75.0 feet; thence N 02 degrees 37'
      09" W a distance of 160.0 feet to the place of beginning.

                                  OCEANA COUNTY

      Certain land in Crystal Township, Oceana County, Michigan described as:

            The East 290 feet of the SE 1/4 of the NW 1/4 and the East 290 feet
      of the NE 1/4 of the SW 1/4, all in Section 20, T16N, R16W.

                                  OGEMAW COUNTY

      Certain land in West Branch Township, Ogemaw County, Michigan described
as:

            The South 660 feet of the East 660 feet of the NE 1/4 of the NE 1/4
      of Section 33, T22N, R2E.

                                 OSCEOLA COUNTY

      Certain land in Hersey Township, Osceola County, Michigan described as:

            A parcel of land in the North 1/2 of the Northeast 1/4 of Section
      13, T17N, R9W, described as commencing at the Northeast corner of said
      Section; thence West along the North Section line 999 feet to the point of
      beginning of this description; thence S 01 degrees 54' 20" E 1327.12 feet
      to the North 1/8 line; thence S 89 degrees 17' 05" W along the North 1/8
      line 330.89 feet; thence N 01 degrees 54' 20" W 1331.26 feet to the North
      Section line; thence East along the North Section line 331 feet to the
      point of beginning.

                                  OSCODA COUNTY

      Certain land in Comins Township, Oscoda County, Michigan described as:

            The East 400 feet of the South 580 feet of the W 1/2 of the SW 1/4
      of Section 15, T27N, R3E.

                                  OTSEGO COUNTY

      Certain land in Corwith Township, Otsego County, Michigan described as:

            Part of the NW 1/4 of the NE 1/4 of Section 28, T32N, R3W, described
      as: Beginning at the N 1/4 corner of said section; running thence S 89
      degrees 04' 06" E along the North line of said section, 330.00 feet;
      thence S 00 degrees 28' 43" E, 400.00 feet; thence N 89 degrees 04' 06" W,
      330.00 feet to the

                                      -29-
<PAGE>

      North and South 1/4 line of said section; thence N 00 degrees 28' 43" W
      along the said North and South 1/4 line of said section, 400.00 feet to
      the point of beginning; subject to the use of the N'ly 33.00 feet thereof
      for highway purposes.

                                  OTTAWA COUNTY

      Certain land in Robinson Township, Ottawa County, Michigan described as:

            The North 660 feet of the West 660 feet of the NE 1/4 of the NW 1/4
      of Section 26, T7N, R15W.

                               PRESQUE ISLE COUNTY

      Certain land in Belknap and Pulawski Townships, Presque Isle County,
Michigan described as:

            Part of the South half of the Northeast quarter, Section 24, T34N,
      R5E, and part of the Northwest quarter, Section 19, T34N, R6E, more fully
      described as: Commencing at the East 1/4 corner of said Section 24; thence
      N 00 degrees15'47" E, 507.42 feet, along the East line of said Section 24
      to the point of beginning; thence S 88 degrees15'36" W, 400.00 feet,
      parallel with the North 1/8 line of said Section 24; thence N 00
      degrees15'47" E, 800.00 feet, parallel with said East line of Section 24;
      thence N 88 degrees15'36"E, 800.00 feet, along said North 1/8 line of
      Section 24 and said line extended; thence S 00 degrees15'47" W, 800.00
      feet, parallel with said East line of Section 24; thence S 88
      degrees15'36" W, 400.00 feet, parallel with said North 1/8 line of Section
      24 to the point of beginning.

            Together with a 33 foot easement along the West 33 feet of the
      Northwest quarter lying North of the North 1/8 line of Section 24, Belknap
      Township, extended, in Section 19, T34N, R6E.

                                ROSCOMMON COUNTY

      Certain land in Gerrish Township, Roscommon County, Michigan described as:

            A parcel of land in the NW 1/4 of Section 19, T24N, R3W, described
      as follows: To find the place of beginning of this description commence at
      the Northwest corner of said section, run thence East along the North line
      of said section 1,163.2 feet to the place of beginning of this description
      (said point also being the place of intersection of the West 1/8 line of
      said section with the North line of said section), thence S 01 degrees 01'
      E along said West 1/8 line 132 feet, thence West parallel with the North
      line of said section 132 feet, thence N 01 degrees 01' W parallel with
      said West 1/8 line of said section 132 feet to the North line of said
      section, thence East along the North line of said section 132 feet to the
      place of beginning.

                                      -30-
<PAGE>

                                 SAGINAW COUNTY

      Certain land in Chapin Township, Saginaw County, Michigan described as:

            A parcel of land in the SW 1/4 of Section 13, T9N, R1E, described as
      follows: To find the place of beginning of this description commence at
      the Southwest corner of said section; run thence North along the West line
      of said section 1581.4 feet to the place of beginning of this description;
      thence continuing North along said West line of said section 230 feet to
      the center line of a creek; thence S 70 degrees 07' 00" E along said
      center line of said creek 196.78 feet; thence South 163.13 feet; thence
      West 185 feet to the West line of said section and the place of beginning.

                                 SANILAC COUNTY

      Certain easement rights located across land in Minden Township, Sanilac
County, Michigan described as:

            The Southeast 1/4 of the Southeast 1/4 of Section 1, T14N, R14E,
      excepting therefrom the South 83 feet of the East 83 feet thereof.

                                SHIAWASSEE COUNTY

      Certain land in Burns Township, Shiawassee County, Michigan described as:

            The South 330 feet of the E 1/2 of the NE 1/4 of Section 36, T5N,
      R4E.

                                ST. CLAIR COUNTY

      Certain land in Ira Township, St. Clair County, Michigan described as:

            The N 1/2 of the NW 1/4 of the NE 1/4 of Section 6, T3N, R15E.

                                ST. JOSEPH COUNTY

      Certain land in Mendon Township, St. Joseph County, Michigan described as:

            The North 660 feet of the West 660 feet of the NW 1/4 of SW 1/4,
      Section 35, T5S, R10W.

                                 TUSCOLA COUNTY

      Certain land in Millington Township, Tuscola County, Michigan described
as:

            A strip of land 280 feet wide across the East 96 rods of the South
      20 rods of the N 1/2 of the SE 1/4 of Section 34, T10N, R8E, more
      particularly described as commencing at the Northeast corner of Section 3,
      T9N, R8E, thence S 89 degrees 55' 35" W along the South line of said
      Section 34 a distance of 329.65 feet, thence N 18 degrees 11' 50" W a
      distance of 1398.67 feet to the South 1/8

                                      -31-
<PAGE>

      line of said Section 34 and the place of beginning for this description;
      thence continuing N 18 degrees 11' 50" W a distance of 349.91 feet; thence
      N 89 degrees 57' 01" W a distance of 294.80 feet; thence S 18 degrees 11'
      50" E a distance of 350.04 feet to the South 1/8 line of said Section 34;
      thence S 89 degrees 58' 29" E along the South 1/8 line of said section a
      distance of 294.76 feet to the place of beginning.

                                VAN BUREN COUNTY

      Certain land in Covert Township, Van Buren County, Michigan described as:

            All that part of the West 20 acres of the N 1/2 of the NE fractional
      1/4 of Section 1, T2S, R17W, except the West 17 rods of the North 80 rods,
      being more particularly described as follows: To find the place of
      beginning of this description commence at the N 1/4 post of said section;
      run thence N 89 degrees 29' 20" E along the North line of said section
      280.5 feet to the place of beginning of this description; thence
      continuing N 89 degrees 29' 20" E along said North line of said section
      288.29 feet; thence S 00 degrees 44' 00" E, 1531.92 feet; thence S 89
      degrees 33' 30" W, 568.79 feet to the North and South 1/4 line of said
      section; thence N 00 degrees 44' 00" W along said North and South 1/4 line
      of said section 211.4 feet; thence N 89 degrees 29' 20" E, 280.5 feet;
      thence N 00 degrees 44' 00" W, 1320 feet to the North line of said section
      and the place of beginning.

                                WASHTENAW COUNTY

      Certain land in Manchester Township, Washtenaw County, Michigan described
as:

            A parcel of land in the NE 1/4 of the NW 1/4 of Section 1, T4S, R3E,
      described as follows: To find the place of beginning of this description
      commence at the Northwest corner of said section; run thence East along
      the North line of said section 1355.07 feet to the West 1/8 line of said
      section; thence S 00 degrees 22' 20" E along said West 1/8 line of said
      section 927.66 feet to the place of beginning of this description; thence
      continuing S 00 degrees 22' 20" E along said West 1/8 line of said section
      660 feet to the North 1/8 line of said section; thence N 86 degrees 36'
      57" E along said North 1/8 line of said section 660.91 feet; thence N 00
      degrees22' 20" W, 660 feet; thence S 86 degrees 36' 57" W, 660.91 feet to
      the place of beginning.

                                  WAYNE COUNTY

      Certain land in Livonia City, Wayne County, Michigan described as:

            Commencing at the Southeast corner of Section 6, T1S, R9E; thence
      North along the East line of Section 6 a distance of 253 feet to the point
      of beginning; thence continuing North along the East line of Section 6 a
      distance of 50 feet; thence Westerly parallel to the South line of Section
      6, a distance of 215 feet; thence Southerly parallel to the East line of
      Section 6 a distance of 50 feet;

                                      -32-
<PAGE>

      thence easterly parallel with the South line of Section 6 a distance of
      215 feet to the point of beginning.

                                 WEXFORD COUNTY

      Certain land in Selma Township, Wexford County, Michigan described as:

            A parcel of land in the NW 1/4 of Section 7, T22N, R10W, described
      as beginning on the North line of said section at a point 200 feet East of
      the West line of said section, running thence East along said North
      section line 450 feet, thence South parallel with said West section line
      350 feet, thence West parallel with said North section line 450 feet,
      thence North parallel with said West section line 350 feet to the place of
      beginning.

      SECTION 12. The Company is a transmitting utility under Section 9501(2) of
the Michigan Uniform Commercial Code (M.C.L. 440.9501(2)) as defined in M.C.L.
440.9102(1)(aaaa).

      IN WITNESS WHEREOF, said Consumers Energy Company has caused this
Supplemental Indenture to be executed in its corporate name by its Chairman of
the Board, President, a Vice President or its Treasurer and its corporate seal
to be hereunto affixed and to be attested by its Secretary or an Assistant
Secretary, and said JPMorgan Chase Bank, as Trustee as aforesaid, to evidence
its acceptance hereof, has caused this Supplemental Indenture to be executed in
its corporate name by a Vice President and its corporate seal to be hereunto
affixed and to be attested by a Trust Officer, in several counterparts, all as
of the day and year first above written.

                                      -33-
<PAGE>

                                            CONSUMERS ENERGY COMPANY

(SEAL)                                      By /s/ Laura L. Mountcastle
                                               ---------------------------------
                                               Laura L. Mountcastle
                                               Vice President and Treasurer

/s/ Joyce H. Norkey
---------------------------------
Joyce H. Norkey
Assistant Secretary

Signed, sealed and delivered
by CONSUMERS ENERGY COMPANY
in the presence of

/s/ Kimberly C. Wilson
---------------------------------
Kimberly C. Wilson

/s/ Sammie B. Dalton
---------------------------------
Sammie B. Dalton

STATE OF MICHIGAN     )
                        ss.
COUNTY OF JACKSON     )

            The foregoing instrument was acknowledged before me this 3rd day of
August, 2004, by Laura L. Mountcastle, Vice President and Treasurer of CONSUMERS
ENERGY COMPANY, a Michigan corporation, on behalf of the corporation.

                                            /s/ Margaret Hillman
                                            ------------------------------------
[Seal]                                      Margaret Hillman, Notary Public
                                            State of Michigan, County of Jackson
                                            My Commission Expires:  06/14/10
                                            Acting in the County of Jackson

                                      S-1

<PAGE>

                                         JPMORGAN CHASE BANK, AS TRUSTEE

(SEAL)                                   By /s/ L.O'Brien
                                            ------------------------------------
                                            L.O'Brien
Attest:                                     Vice President

/s/ Virginia Dominguez
------------------------------------
Virginia Dominguez
Trust Officer

Signed, sealed and delivered
by JPMORGAN CHASE BANK
in the presence of

/s/ William G. Keenan
------------------------------------
William G. Keenan
Vice President

/s/ Rosa Ciaccia
------------------------------------
Rosa Ciaccia
Trust Officer

STATE OF NEW YORK     )
                        ss.
COUNTY OF NEW YORK    )

            The foregoing instrument was acknowledged before me this 3rd of
August, 2004, by L. O'Brien, a Vice President of JPMORGAN CHASE BANK, a New York
corporation, on behalf of the corporation.

                                            /s/ Emily Fayan
                                            ------------------------------------
                                            EMILY FAYAN
                                            Notary Public, State of New York
[Seal]                                      No. 01FA4737006
                                            Qualified in Kings County
                                            Certificate Filed in New York County
                                            Commission Expires Dec. 31, 2005

Prepared by:                                When recorded, return to:
Kimberly C. Wilson                          Consumers Energy Company
One Energy Plaza, EP11-219                  Business Services Real Estate Dept.
Jackson, MI 49201                           Attn:  Nancy Fisher EP7-439
                                            One Energy Plaza
                                            Jackson, MI 49201

                                       S-2<PAGE>

                                                              EXHIBIT(4)(e)(xiv)

                       NINETY-SIXTH SUPPLEMENTAL INDENTURE

                        PROVIDING AMONG OTHER THINGS FOR

                              FIRST MORTGAGE BONDS,

                  $150,000,000 4.40% SERIES DUE 2009, SERIES K,

                  $150,000,000 4.40% SERIES DUE 2009, SERIES N,

                  $300,000,000 5.00% SERIES DUE 2012, SERIES L,

                  $300,000,000 5.00% SERIES DUE 2012, SERIES O,

                  $350,000,000 5.50% SERIES DUE 2016, SERIES M

                                       AND

                  $350,000,000 5.50% SERIES DUE 2016, SERIES P

                           DATED AS OF AUGUST 17, 2004

                            CONSUMERS ENERGY COMPANY

                                       TO

                              JPMORGAN CHASE BANK,

                                     TRUSTEE

                                                         Counterpart _____ of 80

<PAGE>

            THIS NINETY-SIXTH SUPPLEMENTAL INDENTURE, dated as of August 17,
2004 (herein sometimes referred to as "this Supplemental Indenture"), made and
entered into by and between CONSUMERS ENERGY COMPANY, a corporation organized
and existing under the laws of the State of Michigan, with its principal
executive office and place of business at One Energy Plaza, in Jackson, Jackson
County, Michigan 49201, formerly known as Consumers Power Company (hereinafter
sometimes referred to as the "Company"), and JPMORGAN CHASE BANK, a corporation
organized and existing under the laws of the State of New York, with its
corporate trust offices at 4 New York Plaza, New York, New York 10004
(hereinafter sometimes referred to as the "Trustee"), as Trustee under the
Indenture dated as of September 1, 1945 between Consumers Power Company, a Maine
corporation (hereinafter sometimes referred to as the "Maine corporation"), and
City Bank Farmers Trust Company (Citibank, N.A., successor, hereinafter
sometimes referred to as the "Predecessor Trustee"), securing bonds issued and
to be issued as provided therein (hereinafter sometimes referred to as the
"Indenture"),

            WHEREAS at the close of business on January 30, 1959, City Bank
Farmers Trust Company was converted into a national banking association under
the title "First National City Trust Company"; and

            WHEREAS at the close of business on January 15, 1963, First National
City Trust Company was merged into First National City Bank; and

            WHEREAS at the close of business on October 31, 1968, First National
City Bank was merged into The City Bank of New York, National Association, the
name of which was thereupon changed to First National City Bank; and

            WHEREAS effective March 1, 1976, the name of First National City
Bank was changed to Citibank, N.A.; and

            WHEREAS effective July 16, 1984, Manufacturers Hanover Trust Company
succeeded Citibank, N.A. as Trustee under the Indenture; and

            WHEREAS effective June 19, 1992, Chemical Bank succeeded by merger
to Manufacturers Hanover Trust Company as Trustee under the Indenture; and

            WHEREAS effective July 15, 1996, The Chase Manhattan Bank (National
Association), merged with and into Chemical Bank which thereafter was renamed
The Chase Manhattan Bank; and

            WHEREAS effective November 11, 2001, The Chase Manhattan Bank merged
with Morgan Guaranty Trust Company of New York and the surviving corporation was
renamed JPMorgan Chase Bank; and

            WHEREAS the Indenture was executed and delivered for the purpose of
securing such bonds as may from time to time be issued under and in accordance
with the terms of the Indenture, the aggregate principal amount of bonds to be
secured thereby being limited to $5,000,000,000 at any one time outstanding
(except as provided in Section 2.01 of the Indenture), and the Indenture
describes and sets forth the property conveyed thereby and is filed in the
Office of the Secretary of State of the State of Michigan and is of record in
the Office of

                                        1
<PAGE>

the Register of Deeds of each county in the State of Michigan in which this
Supplemental Indenture is to be recorded; and

            WHEREAS the Indenture has been supplemented and amended by various
indentures supplemental thereto, each of which is filed in the Office of the
Secretary of State of the State of Michigan and is of record in the Office of
the Register of Deeds of each county in the State of Michigan in which this
Supplemental Indenture is to be recorded; and

            WHEREAS the Company and the Maine corporation entered into an
Agreement of Merger and Consolidation, dated as of February 14, 1968, which
provided for the Maine corporation to merge into the Company; and

            WHEREAS the effective date of such Agreement of Merger and
Consolidation was June 6, 1968, upon which date the Maine corporation was merged
into the Company and the name of the Company was changed from "Consumers Power
Company of Michigan" to "Consumers Power Company"; and

            WHEREAS the Company and the Predecessor Trustee entered into a
Sixteenth Supplemental Indenture, dated as of June 4, 1968, which provided,
among other things, for the assumption of the Indenture by the Company; and

            WHEREAS said Sixteenth Supplemental Indenture became effective on
the effective date of such Agreement of Merger and Consolidation; and

            WHEREAS the Company has succeeded to and has been substituted for
the Maine corporation under the Indenture with the same effect as if it had been
named therein as the mortgagor corporation; and

            WHEREAS effective March 11, 1997, the name of Consumers Power
Company was changed to Consumers Energy Company; and

            WHEREAS, the Indenture provides for the issuance of bonds thereunder
in one or more series, and the Company, by appropriate corporate action in
conformity with the terms of the Indenture, has duly determined to create, and
does hereby create, a new series of bonds under the Indenture designated 4.40%
Series due 2009, Series K, each of which bonds shall also bear the descriptive
title "First Mortgage Bonds" (hereinafter provided for and hereinafter sometimes
referred to as the "2009 Bonds, Series K"), the bonds of which series are to be
issued as registered bonds without coupons and are to bear interest at the rate
per annum specified in the title thereof and are to mature August 15, 2009; and

            WHEREAS, the Indenture provides for the issuance of bonds thereunder
in one or more series, and the Company, by appropriate corporate action in
conformity with the terms of the Indenture, has duly determined to create, and
does hereby create, a new series of bonds under the Indenture designated 5.00%
Series due 2012, Series L, each of which bonds shall also bear the descriptive
title "First Mortgage Bonds" (hereinafter provided for and hereinafter sometimes
referred to as the "2012 Bonds, Series L"), the bonds of which series are to be
issued as registered bonds without coupons and are to bear interest at the rate
per annum specified in the title thereof and are to mature February 15, 2012;
and

                                        2
<PAGE>

            WHEREAS, the Indenture provides for the issuance of bonds thereunder
in one or more series, and the Company, by appropriate corporate action in
conformity with the terms of the Indenture, has duly determined to create, and
does hereby create, a new series of bonds under the Indenture designated 5.50%
Series due 2016, Series M, each of which bonds shall also bear the descriptive
title "First Mortgage Bonds" (hereinafter provided for and hereinafter sometimes
referred to as the "2016 Bonds, Series M"), the bonds of which series are to be
issued as registered bonds without coupons and are to bear interest at the rate
per annum specified in the title thereof and are to mature August 15, 2016; and

            WHEREAS the Company and Barclays Capital Inc., Citigroup Global
Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs
& Co., ABN AMRO Incorporated, BNP Paribas Securities Corp., Comerica Securities,
Inc., Fifth Third Securities, Inc., Huntington Capital Corp., J.P. Morgan
Securities Inc. and Wedbush Morgan Securities Inc., (the "Initial Purchasers")
have entered into a Purchase Agreement dated August 11, 2004 (the "Purchase
Agreement"), pursuant to which the Company agreed to sell and the Initial
Purchasers agreed to buy $150,000,000 in aggregate principal amount of 2009
Bonds, Series K, $300,000,000 of 2012 Bonds, Series L and $350,000,000 of 2016
Bonds, Series M (such 2009 Bonds, Series K, 2012 Bonds, Series L and 2016 Bonds,
Series M together, the "Initial Bonds"); and

            WHEREAS the Company and the Initial Purchasers have entered into a
Registration Rights Agreement dated as of August 17, 2004 (the "Registration
Rights Agreement"); and

            WHEREAS the Registration Rights Agreement requires the Company to
use its reasonable best efforts to make an Exchange Offer (as defined therein)
which would allow (i) the Initial Purchasers, or permitted successor holders, of
the 2009 Bonds, Series K to exchange such bonds for bonds not subject to certain
restrictions under the Securities Act of 1933, as amended (the "Securities Act")
or to cause a Shelf Registration Statement (as defined in the Registration
Rights Agreement) to be declared effective with respect to the 2009 Bonds,
Series K, (ii) the Initial Purchasers, or permitted successor holders, of the
2012 Bonds, Series L to exchange such bonds for bonds not subject to certain
restrictions under the Securities Act or to cause a Shelf Registration Statement
(as defined in the Registration Rights Agreement) to be declared effective with
respect to the 2012 Bonds, Series L, and (iii) the Initial Purchasers, or
permitted successor holders, of the 2016 Bonds, Series M to exchange such bonds
for bonds not subject to certain restrictions under the Securities Act or to
cause a Shelf Registration Statement (as defined in the Registration Rights
Agreement) to be declared effective with respect to the 2016 Bonds, Series M;
and

            WHEREAS the Company has duly determined to create, and does hereby
create, a series of bonds under the Indenture to be issued in exchange for the
2009 Bonds, Series K, such bonds to be designated 4.40% Series due 2009, Series
N, each of which bonds shall also bear the descriptive title "First Mortgage
Bonds" (the "2009 Bonds, Series N"), the bonds of which series are to be issued
as registered bonds without coupons and are to bear interest at the rate per
annum specified in the title thereof and are to mature August 15, 2009; and

                                        3
<PAGE>

            WHEREAS the Company has duly determined to create, and does hereby
create, a series of bonds under the Indenture to be issued in exchange for the
2012 Bonds, Series L, such bonds to be designated 5.00% Series due 2012, Series
O, each of which bonds shall also bear the descriptive title "First Mortgage
Bonds" (the "2012 Bonds, Series O"), the bonds of which series are to be issued
as registered bonds without coupons and are to bear interest at the rate per
annum specified in the title thereof and are to mature February 15, 2012; and

            WHEREAS the Company has duly determined to create, and does hereby
create, a series of bonds under the Indenture to be issued in exchange for the
2016 Bonds, Series M, such bonds to be designated 5.50% Series due 2016, Series
P, each of which bonds shall also bear the descriptive title "First Mortgage
Bonds" (the "2016 Bonds, Series P" and, together with the 2009 Bonds, Series N
and the 2012 Bonds, Series O the "Exchange Bonds"), the bonds of which series
are to be issued as registered bonds without coupons and are to bear interest at
the rate per annum specified in the title thereof and are to mature August 15,
2016; and

            WHEREAS, each of the registered bonds without coupons of 2009 Bonds,
Series K, and the Trustee's Authentication Certificate thereon, each of the
registered bonds without coupons of the 2009 Bonds, Series N, and the Trustee's
Authentication Certificate thereon, each of the registered bonds without coupons
of the 2012 Bonds, Series L, and the Trustee's Authentication Certificate
thereon, each of the registered bonds without coupons of the 2012 Bonds, Series
O, and the Trustee's Authentication Certificate thereon, each of the registered
bonds without coupons of 2016 Bonds, Series M, and the Trustee's Authentication
Certificate thereon, and each of the registered bonds without coupons of 2016
Bonds, Series P, and the Trustee's Authentication Certificate thereon, are to be
substantially in the following forms, respectively, to wit:

              [FORM OF REGISTERED BOND OF THE 2009 BONDS, SERIES K]

                                     [FACE]

            THIS BOND IS A GLOBAL BOND REGISTERED IN THE NAME OF THE DEPOSITARY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL BONDS REPRESENTED HEREBY, THIS GLOBAL
BOND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
GLOBAL BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK CORPORATION (THE
"DEPOSITARY"), TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY) ANY
TRANSFER,

                                       4
<PAGE>

PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

            THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
(5) TO CONSUMERS ENERGY COMPANY OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES.

                            CONSUMERS ENERGY COMPANY
                               FIRST MORTGAGE BOND
                         4.40% SERIES DUE 2009, SERIES K

CUSIP: _______
                                                               $150,000,000
ISIN: ________

No.: ________________

            CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of One Hundred Fifty Million Dollars
($150,000,000) on August 15, 2009, and to pay to the registered holder hereof
interest on said sum from the latest semi-annual interest payment date to which
interest has been paid on the bonds of this series preceding the date hereof,
unless the date hereof be an interest payment date to which interest is being
paid, in which case from the date hereof, or unless the date hereof is prior to
February 15, 2005, in which case from August 17, 2004 (or if this bond is dated
between the record date for any interest payment date and such interest payment
date, then from such interest payment date, provided, however, that if the
Company shall default in payment of the interest due on such interest payment
date, then from the next preceding semi-annual interest payment date to which
interest has been paid on the bonds of this series, or if such interest payment
date is February 15, 2005, from August 17, 2004), at the rate per annum, until
the principal hereof shall have become due and payable, specified in the title
of this bond, payable on February 15 and August 15 in each

                                        5
<PAGE>

year. If the Company does not comply with certain of its obligations under the
Registration Rights Agreement entered into by the Company as of August 17, 2004
(in which case the Company shall notify the Trustee thereof), the bonds of this
series shall, in accordance with Section 5 of such Registration Rights
Agreement, bear additional interest ("Additional Interest") in addition to the
interest provided for in the immediately preceding sentence. For purposes of the
bonds of this series, the term "interest" shall be deemed to include interest
provided for in the second immediately preceding sentence and Additional
Interest, if any.

            The provisions of this bond are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.

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

            IN WITNESS WHEREOF, Consumers Energy Company has caused this bond to
be executed in its name by its Chairman of the Board, its President or one of
its Vice Presidents by his or her signature or a facsimile thereof, and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon
and attested by its Secretary or one of its Assistant Secretaries by his or her
signature or a facsimile thereof.

                                          CONSUMERS ENERGY COMPANY

Dated:

                                          By:      _____________________________
                                          Printed: _____________________________
                                          Title:   _____________________________

Attest: _________________________

                      TRUSTEE'S AUTHENTICATION CERTIFICATE

            This is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.

                                            JPMORGAN CHASE BANK, Trustee

                                            By: ________________________________
                                                       Authorized Officer

                                        6
<PAGE>

                                    [REVERSE]

                            CONSUMERS ENERGY COMPANY

                               FIRST MORTGAGE BOND
                         4.40% SERIES DUE 2009, SERIES K

            The interest payable on any February 15 or August 15 will, subject
to certain exceptions provided in the Indenture hereinafter mentioned, be paid
to the person in whose name this bond is registered at the close of business on
the record date, which shall be the first calendar day of the month next
preceding such interest payment date, or, if such February 15 or August 15 shall
be a legal holiday or a day on which banking institutions in the Borough of
Manhattan, The City of New York, are authorized to close, the next preceding day
which shall not be a legal holiday or a day on which such institutions are so
authorized to close. The principal of and the premium, if any, and interest on
this bond shall be payable at the office or agency of the Company in the Borough
of Manhattan, The City of New York, designated for that purpose, in any coin or
currency of the United States of America which at the time of payment is legal
tender for public and private debts.

            This bond is one of the bonds of a series designated as First
Mortgage Bonds, 4.40% Series due 2009, Series K (sometimes herein referred to as
the "2009 Bonds, Series K" or the "Bonds") issued and to be issued from time to
time under and in accordance with and secured by an indenture dated as of
September 1, 1945, given by the Company (or its predecessor, Consumers Power
Company, a Maine corporation) to City Bank Farmers Trust Company (JPMorgan Chase
Bank, successor) (hereinafter sometimes referred to as the "Trustee"), together
with indentures supplemental thereto, heretofore or hereafter executed, to which
indenture and indentures supplemental thereto (hereinafter referred to
collectively as the "Indenture") reference is hereby made for a description of
the property mortgaged and pledged, the nature and extent of the security and
the rights, duties and immunities thereunder of the Trustee and the rights of
the holders of said bonds and of the Trustee and of the Company in respect of
such security, and the limitations on such rights. By the terms of the
Indenture, the bonds to be secured thereby are issuable in series which may vary
as to date, amount, date of maturity, rate of interest and in other respects as
provided in the Indenture.

            The 2009 Bonds, Series K are redeemable upon notice given by mailing
the same, postage prepaid, not less than thirty days nor more than sixty days
prior to the date fixed for redemption to each registered holder of a bond to be
redeemed (in whole or in part) at the last address of such holder appearing on
the registry books. Any or all of the bonds of this series may be redeemed by
the Company, at any time and from time to time prior to maturity, at a
redemption price equal to the greater of (1) 100% of the principal amount of the
Bonds and (2) the sum of the present values of the Remaining Scheduled Payments
(as defined below) of principal and interest on the Bonds discounted to the
redemption date semiannually (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as defined below), plus 20 basis points,
plus in either case accrued interest on the Bonds 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 (as

                                        7
<PAGE>

defined below), assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price (as
defined below) for such redemption date.

            "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker (as defined below) as
having a maturity comparable to the remaining term of the Bonds 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.

            "Independent Investment Banker" means either Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated or, if such firms are unwilling or unable to select the Comparable
Treasury Issues, an independent banking institution of national standing
selected by the Company.

            "Comparable Treasury Price" means, with respect to any redemption
date, (1) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "H.15(519)" or (2) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (a) the average of the Reference Treasury Dealer Quotations (as
defined below) for such redemption date, after excluding the highest and lowest
of such Reference Treasury Dealer Quotations, or (b) if the Company obtains
fewer than four such Reference Treasury Dealer Quotations, the average of all
such quotations.

            "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer (as defined below) and any redemption date, the
average, as determined by the Company, 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 Company by such Reference Treasury
Dealer at 5:00 p.m. on the third business day preceding such redemption date.

            "Reference Treasury Dealer" means (1) each of Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and their respective successors; provided, however, that if any of
the foregoing shall cease to be a primary U.S. government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall replace that
former dealer with another Primary Treasury Dealer and (2) up to four other
Primary Treasury Dealers selected by the Company.

            "Remaining Scheduled Payments" means, with respect to each Bond to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if that redemption date is prior to an
interest payment date with respect to such Bond, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to that redemption date.

                                        8
<PAGE>

            In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture. The holders of certain specified percentages of the bonds at the time
outstanding, including in certain cases specified percentages of bonds of
particular series, may in certain cases, to the extent and as provided in the
Indenture, waive certain defaults thereunder and the consequences of such
defaults.

            The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than seventy-five per
centum in principal amount of the bonds (exclusive of bonds disqualified by
reason of the Company's interest therein) at the time outstanding, including, if
more than one series of bonds shall be at the time outstanding, not less than
sixty per centum in principal amount of each series affected, to effect, by an
indenture supplemental to the Indenture, modifications or alterations of the
Indenture and of the rights and obligations of the Company and the rights of the
holders of the bonds and coupons; provided, however, that no such modification
or alteration shall be made without the written approval or consent of the
holder hereof which will (a) extend the maturity of this bond or reduce the rate
or extend the time of payment of interest hereon or reduce the amount of the
principal hereof or reduce any premium payable on the redemption hereof, or (b)
permit the creation of any lien, not otherwise permitted, prior to or on a
parity with the lien of the Indenture, or (c) reduce the percentage of the
principal amount of the bonds upon the approval or consent of the holders of
which modifications or alterations may be made as aforesaid.

            The Company reserves the right, without any consent, vote or other
action by holders of the 2009 Bonds, Series K or any other series created after
the Sixty-eighth Supplemental Indenture to amend the Indenture to reduce the
percentage of the principal amount of bonds the holders of which are required to
approve any supplemental indenture (other than any supplemental indenture which
is subject to the proviso contained in the immediately preceding sentence) (a)
from not less than seventy-five per centum (including sixty per centum of each
series affected) to not less than a majority in principal amount of the bonds at
the time outstanding or (b) in case fewer than all series are affected, not less
than a majority in principal amount of the bonds of all affected series, voting
together.

            No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, or otherwise, 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, as such, being waived and released by the holder and
owner hereof by the acceptance of this bond and being likewise waived and
released by the terms of the Indenture.

          [END OF FORM OF REGISTERED BOND OF THE 2009 BONDS, SERIES K]

                                        9
<PAGE>

              [FORM OF REGISTERED BOND OF THE 2009 BONDS, SERIES N]

                                     [FACE]

            THIS BOND IS A GLOBAL BOND REGISTERED IN THE NAME OF THE DEPOSITARY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL BONDS REPRESENTED HEREBY, THIS GLOBAL
BOND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
GLOBAL BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK CORPORATION (THE
"DEPOSITARY"), TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

                            CONSUMERS ENERGY COMPANY
                               FIRST MORTGAGE BOND
                         4.40% SERIES DUE 2009, SERIES N

CUSIP: ________________
                                                            $150,000,000
ISIN: ________________

No.: ________________

            CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of One Hundred Fifty Million Dollars
($150,000,000) on August 15, 2009 and to pay to the registered holder hereof
interest on said sum from the latest semi-annual interest payment date to which
interest has been paid on the bonds of this series preceding the date hereof,
unless the date hereof be an interest payment date to which interest is being
paid, in which case from the date hereof, or unless the date hereof is prior to
February 15, 2005, in which case from August 17, 2004 or unless the date hereof
is after February 15, 2005 but prior to the first date when any interest hereon
has been paid, in which case from the last interest payment date on the
Company's First Mortgage Bonds, 4.40% Series due 2009, Series K, to which
interest has been paid (or if this bond is dated between the record date for any
interest payment

                                       10
<PAGE>

date and such interest payment date, then from such interest payment date,
provided, however, that if the Company shall default in payment of the interest
due on such interest payment date, then from the next preceding semi-annual
interest payment date to which interest has been paid on the bonds of this
series, or if such interest payment date is February 15, 2005, from August 17,
2004), at the rate per annum, until the principal hereof shall have become due
and payable, specified in the title of this bond, payable on February 15 and
August 15 in each year.

            The provisions of this bond are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.

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

            IN WITNESS WHEREOF, Consumers Energy Company has caused this bond to
be executed in its name by its Chairman of the Board, its President or one of
its Vice Presidents by his or her signature or a facsimile thereof, and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon
and attested by its Secretary or one of its Assistant Secretaries by his or her
signature or a facsimile thereof.

                                            CONSUMERS ENERGY COMPANY

Dated:

                                            By: ________________________________
                                            Printed: ___________________________
                                            Title: _____________________________

Attest: _________________________

                      TRUSTEE'S AUTHENTICATION CERTIFICATE

            This is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.

                                             JPMORGAN CHASE BANK, Trustee

                                             By: _______________________________
                                                       Authorized Officer

                                       11
<PAGE>

                                    [REVERSE]

                            CONSUMERS ENERGY COMPANY

                               FIRST MORTGAGE BOND
                         4.40% SERIES DUE 2009, SERIES N

            The interest payable on any February 15 or August 15 will, subject
to certain exceptions provided in the Indenture hereinafter mentioned, be paid
to the person in whose name this bond is registered at the close of business on
the record date, which shall be the first calendar day of the month next
preceding such interest payment date, or, if such February 15 or August 15 shall
be a legal holiday or a day on which banking institutions in the Borough of
Manhattan, The City of New York, are authorized to close, the next preceding day
which shall not be a legal holiday or a day on which such institutions are so
authorized to close. The principal of and the premium, if any, and interest on
this bond shall be payable at the office or agency of the Company in the Borough
of Manhattan, The City of New York, designated for that purpose, in any coin or
currency of the United States of America which at the time of payment is legal
tender for public and private debts.

            This bond is one of the bonds of a series designated as First
Mortgage Bonds, 4.40% Series due 2009, Series N (sometimes herein referred to as
the "2009 Bonds, Series N" or the "Bonds") issued and to be issued from time to
time under and in accordance with and secured by an indenture dated as of
September 1, 1945, given by the Company (or its predecessor, Consumers Power
Company, a Maine corporation) to City Bank Farmers Trust Company (JPMorgan Chase
Bank, successor) (hereinafter sometimes referred to as the "Trustee"), together
with indentures supplemental thereto, heretofore or hereafter executed, to which
indenture and indentures supplemental thereto (hereinafter referred to
collectively as the "Indenture") reference is hereby made for a description of
the property mortgaged and pledged, the nature and extent of the security and
the rights, duties and immunities thereunder of the Trustee and the rights of
the holders of said bonds and of the Trustee and of the Company in respect of
such security, and the limitations on such rights. By the terms of the
Indenture, the bonds to be secured thereby are issuable in series which may vary
as to date, amount, date of maturity, rate of interest and in other respects as
provided in the Indenture.

            The 2009 Bonds, Series N are redeemable upon notice given by mailing
the same, postage prepaid, not less than thirty days nor more than sixty days
prior to the date fixed for redemption to each registered holder of a bond to be
redeemed (in whole or in part) at the last address of such holder appearing on
the registry books. Any or all of the bonds of this series may be redeemed by
the Company, at any time and from time to time prior to maturity, at a
redemption price equal to the greater of (1) 100% of the principal amount of the
Bonds and (2) the sum of the present values of the Remaining Scheduled Payments
(as defined below) of principal and interest on the Bonds discounted to the
redemption date semiannually (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as defined below), plus 20 basis points,
plus in either case accrued interest on the Bonds 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 (as

                                       12
<PAGE>

defined below), assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price (as
defined below) for such redemption date.

            "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker (as defined below) as
having a maturity comparable to the remaining term of the Bonds 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.

            "Independent Investment Banker" means either Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated or, if such firms are unwilling or unable to select the Comparable
Treasury Issues, an independent banking institution of national standing
selected by the Company.

            "Comparable Treasury Price" means, with respect to any redemption
date, (1) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "H.15(519)" or (2) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (a) the average of the Reference Treasury Dealer Quotations (as
defined below) for such redemption date, after excluding the highest and lowest
of such Reference Treasury Dealer Quotations, or (b) if the Company obtains
fewer than four such Reference Treasury Dealer Quotations, the average of all
such quotations.

            "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer (as defined below) and any redemption date, the
average, as determined by the Company, 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 Company by such Reference Treasury
Dealer at 5:00 p.m. on the third business day preceding such redemption date.

            "Reference Treasury Dealer" means (1) each of Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and their respective successors; provided, however, that if any of
the foregoing shall cease to be a primary U.S. government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall replace that
former dealer with another Primary Treasury Dealer and (2) up to four other
Primary Treasury Dealers selected by the Company.

            "Remaining Scheduled Payments" means, with respect to each Bond to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if that redemption date is prior to an
interest payment date with respect to such Bond, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to that redemption date.

                                       13
<PAGE>

            In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture. The holders of certain specified percentages of the bonds at the time
outstanding, including in certain cases specified percentages of bonds of
particular series, may in certain cases, to the extent and as provided in the
Indenture, waive certain defaults thereunder and the consequences of such
defaults.

            The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than seventy-five per
centum in principal amount of the bonds (exclusive of bonds disqualified by
reason of the Company's interest therein) at the time outstanding, including, if
more than one series of bonds shall be at the time outstanding, not less than
sixty per centum in principal amount of each series affected, to effect, by an
indenture supplemental to the Indenture, modifications or alterations of the
Indenture and of the rights and obligations of the Company and the rights of the
holders of the bonds and coupons; provided, however, that no such modification
or alteration shall be made without the written approval or consent of the
holder hereof which will (a) extend the maturity of this bond or reduce the rate
or extend the time of payment of interest hereon or reduce the amount of the
principal hereof or reduce any premium payable on the redemption hereof, or (b)
permit the creation of any lien, not otherwise permitted, prior to or on a
parity with the lien of the Indenture, or (c) reduce the percentage of the
principal amount of the bonds upon the approval or consent the holders of which
modifications or alterations may be made as aforesaid.

            The Company reserves the right, without any consent, vote or other
action by holders of the 2009 Bonds, Series N or any other series created after
the Sixty-eighth Supplemental Indenture to amend the Indenture to reduce the
percentage of the principal amount of bonds the holders of which are required to
approve any supplemental indenture (other than any supplemental indenture which
is subject to the proviso contained in the immediately preceding sentence) (a)
from not less than seventy-five per centum (including sixty per centum of each
series affected) to not less than a majority in principal amount of the bonds at
the time outstanding or (b) in case fewer than all series are affected, not less
than a majority in principal amount of the bonds of all affected series, voting
together.

            No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, or otherwise, 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, as such, being waived and released by the holder and
owner hereof by the acceptance of this bond and being likewise waived and
released by the terms of the Indenture.

          [END OF FORM OF REGISTERED BOND OF THE 2009 BONDS, SERIES N]

                                       14
<PAGE>

              [FORM OF REGISTERED BOND OF THE 2012 BONDS, SERIES L]

                                     [FACE]

            THIS BOND IS A GLOBAL BOND REGISTERED IN THE NAME OF THE DEPOSITARY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL BONDS REPRESENTED HEREBY, THIS GLOBAL
BOND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
GLOBAL BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK CORPORATION (THE
"DEPOSITARY"), TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

            THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
(5) TO CONSUMERS ENERGY COMPANY OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES.

                                       15
<PAGE>

                            CONSUMERS ENERGY COMPANY
                               FIRST MORTGAGE BOND
                         5.00% SERIES DUE 2012, SERIES L

CUSIP: __________________
                                                         $300,000,000
ISIN: __________________

No.: ________________

            CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of Three Hundred Million Dollars
($300,000,000) on February 15, 2012 and to pay to the registered holder hereof
interest on said sum from the latest semi-annual interest payment date to which
interest has been paid on the bonds of this series preceding the date hereof,
unless the date hereof be an interest payment date to which interest is being
paid, in which case from the date hereof, or unless the date hereof is prior to
February 15, 2005, in which case from August 17, 2004 (or if this bond is dated
between the record date for any interest payment date and such interest payment
date, then from such interest payment date, provided, however, that if the
Company shall default in payment of the interest due on such interest payment
date, then from the next preceding semi-annual interest payment date to which
interest has been paid on the bonds of this series, or if such interest payment
date is February 15, 2005, from August 17, 2004), at the rate per annum, until
the principal hereof shall have become due and payable, specified in the title
of this bond, payable on February 15 and August 15 in each year. If the Company
does not comply with certain of its obligations under the Registration Rights
Agreement entered into by the Company as of August 17, 2004 (in which case the
Company shall notify the Trustee thereof), the bonds of this series shall, in
accordance with Section 5 of such Registration Rights Agreement, bear additional
interest ("Additional Interest") in addition to the interest provided for in the
immediately preceding sentence. For purposes of the bonds of this series, the
term "interest" shall be deemed to include interest provided for in the second
immediately preceding sentence and Additional Interest, if any.

            The provisions of this bond are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.

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

                                       16
<PAGE>

            IN WITNESS WHEREOF, Consumers Energy Company has caused this bond to
be executed in its name by its Chairman of the Board, its President or one of
its Vice Presidents by his or her signature or a facsimile thereof, and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon
and attested by its Secretary or one of its Assistant Secretaries by his or her
signature or a facsimile thereof.

                                             CONSUMERS ENERGY COMPANY

Dated:

                                             By: _______________________________
                                             Printed: __________________________
                                             Title: ____________________________

Attest: _________________________

                      TRUSTEE'S AUTHENTICATION CERTIFICATE

            This is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.

                                             JPMORGAN CHASE BANK, Trustee

                                             By: _______________________________
                                                       Authorized Officer

                                    [REVERSE]

                            CONSUMERS ENERGY COMPANY

                               FIRST MORTGAGE BOND
                         5.00% SERIES DUE 2012, SERIES L

            The interest payable on any February 15 or August 15 will, subject
to certain exceptions provided in the Indenture hereinafter mentioned, be paid
to the person in whose name this bond is registered at the close of business on
the record date, which shall be the first calendar day of the month next
preceding such interest payment date, or, if such February 15 or August 15 shall
be a legal holiday or a day on which banking institutions in the Borough of
Manhattan, The City of New York, are authorized to close, the next preceding day
which shall not be a legal holiday or a day on which such institutions are so
authorized to close. The principal of and the premium, if any, and interest on
this bond shall be payable at the office or agency of the Company in the Borough
of Manhattan, The City of New York, designated for that purpose, in any coin or
currency of the United States of America which at the time of payment is legal
tender for public and private debts.

            This bond is one of the bonds of a series designated as First
Mortgage Bonds, 5.00% Series due 2012, Series L (sometimes herein referred to as
the "2012 Bonds, Series L" or

                                       17
<PAGE>

the "Bonds") issued and to be issued from time to time under and in accordance
with and secured by an indenture dated as of September 1, 1945, given by the
Company (or its predecessor, Consumers Power Company, a Maine corporation) to
City Bank Farmers Trust Company (JPMorgan Chase Bank, successor) (hereinafter
sometimes referred to as the "Trustee"), together with indentures supplemental
thereto, heretofore or hereafter executed, to which indenture and indentures
supplemental thereto (hereinafter referred to collectively as the "Indenture")
reference is hereby made for a description of the property mortgaged and
pledged, the nature and extent of the security and the rights, duties and
immunities thereunder of the Trustee and the rights of the holders of said bonds
and of the Trustee and of the Company in respect of such security, and the
limitations on such rights. By the terms of the Indenture, the bonds to be
secured thereby are issuable in series which may vary as to date, amount, date
of maturity, rate of interest and in other respects as provided in the
Indenture.

            The 2012 Bonds, Series L are redeemable upon notice given by mailing
the same, postage prepaid, not less than thirty days nor more than sixty days
prior to the date fixed for redemption to each registered holder of a bond to be
redeemed (in whole or in part) at the last address of such holder appearing on
the registry books. Any or all of the bonds of this series may be redeemed by
the Company, at any time and from time to time prior to maturity, at a
redemption price equal to the greater of (1) 100% of the principal amount of the
Bonds and (2) the sum of the present values of the Remaining Scheduled Payments
(as defined below) of principal and interest on the Bonds discounted to the
redemption date semiannually (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as defined below), plus 20 basis points,
plus in either case accrued interest on the Bonds 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 (as defined below), assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price (as defined below) for such redemption date.

            "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker (as defined below) as
having a maturity comparable to the remaining term of the Bonds 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.

            "Independent Investment Banker" means either Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated or, if such firms are unwilling or unable to select the Comparable
Treasury Issues, an independent banking institution of national standing
selected by the Company.

            "Comparable Treasury Price" means, with respect to any redemption
date, (1) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "H.15(519)" or (2) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (a) the average of

                                       18
<PAGE>

the Reference Treasury Dealer Quotations (as defined below) for such redemption
date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (b) if the Company obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.

            "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer (as defined below) and any redemption date, the
average, as determined by the Company, 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 Company by such Reference Treasury
Dealer at 5:00 p.m. on the third business day preceding such redemption date.

            "Reference Treasury Dealer" means (1) each of Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and their respective successors; provided, however, that if any of
the foregoing shall cease to be a primary U.S. government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall replace that
former dealer with another Primary Treasury Dealer and (2) up to four other
Primary Treasury Dealers selected by the Company.

            "Remaining Scheduled Payments" means, with respect to each Bond to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if that redemption date is prior to an
interest payment date with respect to such Bond, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to that redemption date.

            In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture. The holders of certain specified percentages of the bonds at the time
outstanding, including in certain cases specified percentages of bonds of
particular series, may in certain cases, to the extent and as provided in the
Indenture, waive certain defaults thereunder and the consequences of such
defaults.

            The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than seventy-five per
centum in principal amount of the bonds (exclusive of bonds disqualified by
reason of the Company's interest therein) at the time outstanding, including, if
more than one series of bonds shall be at the time outstanding, not less than
sixty per centum in principal amount of each series affected, to effect, by an
indenture supplemental to the Indenture, modifications or alterations of the
Indenture and of the rights and obligations of the Company and the rights of the
holders of the bonds and coupons; provided, however, that no such modification
or alteration shall be made without the written approval or consent of the
holder hereof which will (a) extend the maturity of this bond or reduce the rate
or extend the time of payment of interest hereon or reduce the amount of the
principal hereof or reduce any premium payable on the redemption hereof, or (b)
permit the creation of any lien, not otherwise permitted, prior to or on a
parity with the lien of the Indenture, or (c) reduce the percentage of the
principal amount of the bonds upon the approval or consent of the holders of
which modifications or alterations may be made as aforesaid.

                                       19
<PAGE>

            The Company reserves the right, without any consent, vote or other
action by holders of the 2012 Bonds, Series L or any other series created after
the Sixty-eighth Supplemental Indenture to amend the Indenture to reduce the
percentage of the principal amount of bonds the holders of which are required to
approve any supplemental indenture (other than any supplemental indenture which
is subject to the proviso contained in the immediately preceding sentence) (a)
from not less than seventy-five per centum (including sixty per centum of each
series affected) to not less than a majority in principal amount of the bonds at
the time outstanding or (b) in case fewer than all series are affected, not less
than a majority in principal amount of the bonds of all affected series, voting
together.

            No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, or otherwise, 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, as such, being waived and released by the holder and
owner hereof by the acceptance of this bond and being likewise waived and
released by the terms of the Indenture.

          [END OF FORM OF REGISTERED BOND OF THE 2012 BONDS, SERIES L]

              [FORM OF REGISTERED BOND OF THE 2012 BONDS, SERIES O]

                                     [FACE]

            THIS BOND IS A GLOBAL BOND REGISTERED IN THE NAME OF THE DEPOSITARY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL BONDS REPRESENTED HEREBY, THIS GLOBAL
BOND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
GLOBAL BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK CORPORATION (THE
"DEPOSITARY"), TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY

                                       20
<PAGE>

PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

                            CONSUMERS ENERGY COMPANY
                               FIRST MORTGAGE BOND
                         5.00% SERIES DUE 2012, SERIES O

CUSIP: __________________
                                                            $300,000,000
ISIN: __________________

No.: ________________

            CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of Three Hundred Million Dollars
($300,000,000) on February 15, 2012 and to pay to the registered holder hereof
interest on said sum from the latest semi-annual interest payment date to which
interest has been paid on the bonds of this series preceding the date hereof,
unless the date hereof be an interest payment date to which interest is being
paid, in which case from the date hereof, or unless the date hereof is prior to
February 15, 2005, in which case from August 17, 2004 or unless the date hereof
is after February 15, 2005 but prior to the first date when any interest hereon
has been paid, in which case from the last interest payment date on the
Company's First Mortgage Bonds, 5.00% Series due 2012, Series L, to which
interest has been paid (or if this bond is dated between the record date for any
interest payment date and such interest payment date, then from such interest
payment date, provided, however, that if the Company shall default in payment of
the interest due on such interest payment date, then from the next preceding
semi-annual interest payment date to which interest has been paid on the bonds
of this series, or if such interest payment date is February 15, 2005, from
August 17, 2004), at the rate per annum, until the principal hereof shall have
become due and payable, specified in the title of this bond, payable on February
15 and August 15 in each year.

            The provisions of this bond are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.

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

                                       21
<PAGE>

            IN WITNESS WHEREOF, Consumers Energy Company has caused this bond to
be executed in its name by its Chairman of the Board, its President or one of
its Vice Presidents by his or her signature or a facsimile thereof, and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon
and attested by its Secretary or one of its Assistant Secretaries by his or her
signature or a facsimile thereof.

                                            CONSUMERS ENERGY COMPANY

Dated:

                                            By: ________________________________
                                            Printed: ___________________________
                                            Title: _____________________________

Attest: _________________________

                      TRUSTEE'S AUTHENTICATION CERTIFICATE

            This is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.

                                            JPMORGAN CHASE BANK, Trustee

                                            By: ________________________________
                                                       Authorized Officer

                                    [REVERSE]

                            CONSUMERS ENERGY COMPANY

                               FIRST MORTGAGE BOND
                         5.00% SERIES DUE 2012, SERIES O

            The interest payable on any February 15 or August 15 will, subject
to certain exceptions provided in the Indenture hereinafter mentioned, be paid
to the person in whose name this bond is registered at the close of business on
the record date, which shall be the first calendar day of the month next
preceding such interest payment date, or, if such February 15 or August 15 shall
be a legal holiday or a day on which banking institutions in the Borough of
Manhattan, The City of New York, are authorized to close, the next preceding day
which shall not be a legal holiday or a day on which such institutions are so
authorized to close. The principal of and the premium, if any, and interest on
this bond shall be payable at the office or agency of the Company in the Borough
of Manhattan, The City of New York, designated for that purpose, in

                                       22
<PAGE>

any coin or currency of the United States of America which at the time of
payment is legal tender for public and private debts.

            This bond is one of the bonds of a series designated as First
Mortgage Bonds, 5.00% Series due 2012, Series O (sometimes herein referred to as
the "2012 Bonds, Series O" or the "Bonds") issued and to be issued from time to
time under and in accordance with and secured by an indenture dated as of
September 1, 1945, given by the Company (or its predecessor, Consumers Power
Company, a Maine corporation) to City Bank Farmers Trust Company (JPMorgan Chase
Bank, successor) (hereinafter sometimes referred to as the "Trustee"), together
with indentures supplemental thereto, heretofore or hereafter executed, to which
indenture and indentures supplemental thereto (hereinafter referred to
collectively as the "Indenture") reference is hereby made for a description of
the property mortgaged and pledged, the nature and extent of the security and
the rights, duties and immunities thereunder of the Trustee and the rights of
the holders of said bonds and of the Trustee and of the Company in respect of
such security, and the limitations on such rights. By the terms of the
Indenture, the bonds to be secured thereby are issuable in series which may vary
as to date, amount, date of maturity, rate of interest and in other respects as
provided in the Indenture.

            The 2012 Bonds, Series O are redeemable upon notice given by mailing
the same, postage prepaid, not less than thirty days but no more than sixty days
prior to the date fixed for redemption to each registered holder of a bond to be
redeemed (in whole or in part) at the last address of such holder appearing on
the registry books. Any or all of the bonds of this series may be redeemed by
the Company, at any time and from time to time prior to maturity, at a
redemption price equal to the greater of (1) 100% of the principal amount of the
Bonds and (2) the sum of the present values of the Remaining Scheduled Payments
(as defined below) of principal and interest on the Bonds discounted to the
redemption date semiannually (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as defined below), plus 20 basis points,
plus in either case accrued interest on the Bonds 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 (as defined below), assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price (as defined below) for such redemption date.

            "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker (as defined below) as
having a maturity comparable to the remaining term of the Bonds 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.

            "Independent Investment Banker" means either Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated or, if such firms are unwilling or unable to select the Comparable
Treasury Issues, an independent banking institution of national standing
selected by the Company.

                                       23
<PAGE>

            "Comparable Treasury Price" means, with respect to any redemption
date, (1) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "H.15(519)" or (2) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (a) the average of the Reference Treasury Dealer Quotations (as
defined below) for such redemption date, after excluding the highest and lowest
of such Reference Treasury Dealer Quotations, or (b) if the Company obtains
fewer than four such Reference Treasury Dealer Quotations, the average of all
such quotations.

            "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer (as defined below) and any redemption date, the
average, as determined by the Company, 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 Company by such Reference Treasury
Dealer at 5:00 p.m. on the third business day preceding such redemption date.

            "Reference Treasury Dealer" means (1) each of Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and their respective successors; provided, however, that if any of
the foregoing shall cease to be a primary U.S. government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall replace that
former dealer with another Primary Treasury Dealer and (2) up to four other
Primary Treasury Dealers selected by the Company.

            "Remaining Scheduled Payments" means, with respect to each Bond to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if that redemption date is prior to an
interest payment date with respect to such Bond, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to that redemption date.

            In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture. The holders of certain specified percentages of the bonds at the time
outstanding, including in certain cases specified percentages of bonds of
particular series, may in certain cases, to the extent and as provided in the
Indenture, waive certain defaults thereunder and the consequences of such
defaults.

            The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than seventy-five per
centum in principal amount of the bonds (exclusive of bonds disqualified by
reason of the Company's interest therein) at the time outstanding, including, if
more than one series of bonds shall be at the time outstanding, not less than
sixty per centum in principal amount of each series affected, to effect, by an
indenture supplemental to the Indenture, modifications or alterations of the
Indenture and of the rights and obligations of the Company and the rights of the
holders of the bonds and coupons; provided, however, that no such modification
or alteration shall be made without the written approval or consent of the
holder hereof which will (a) extend the maturity of this bond or reduce the rate
or

                                       24
<PAGE>

extend the time of payment of interest hereon or reduce the amount of the
principal hereof or reduce any premium payable on the redemption hereof, or (b)
permit the creation of any lien, not otherwise permitted, prior to or on a
parity with the lien of the Indenture, or (c) reduce the percentage of the
principal amount of the bonds upon the approval or consent of the holders of
which modifications or alterations may be made as aforesaid.

            The Company reserves the right, without any consent, vote or other
action by holders of the 2012 Bonds, Series O or any other series created after
the Sixty-eighth Supplemental Indenture to amend the Indenture to reduce the
percentage of the principal amount of bonds the holders of which are required to
approve any supplemental indenture (other than any supplemental indenture which
is subject to the proviso contained in the immediately preceding sentence) (a)
from not less than seventy-five per centum (including sixty per centum of each
series affected) to not less than a majority in principal amount of the bonds at
the time outstanding or (b) in case fewer than all series are affected, not less
than a majority in principal amount of the bonds of all affected series, voting
together.

            No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, or otherwise, 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, as such, being waived and released by the holder and
owner hereof by the acceptance of this bond and being likewise waived and
released by the terms of the Indenture.

          [END OF FORM OF REGISTERED BOND OF THE 2012 BONDS, SERIES O]

              [FORM OF REGISTERED BOND OF THE 2016 BONDS, SERIES M]

                                     [FACE]

            THIS BOND IS A GLOBAL BOND REGISTERED IN THE NAME OF THE DEPOSITARY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL BONDS REPRESENTED HEREBY, THIS GLOBAL
BOND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
GLOBAL BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK CORPORATION (THE
"DEPOSITARY"), TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH

                                       25
<PAGE>

OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY)
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

            THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
(5) TO CONSUMERS ENERGY COMPANY OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES.

                            CONSUMERS ENERGY COMPANY
                               FIRST MORTGAGE BOND
                         5.50% SERIES DUE 2016, SERIES M

CUSIP: _______
                                                           $350,000,000
ISIN: ________

No.: ________________

            CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of Three Hundred Fifty Million Dollars
($350,000,000) on August 15, 2016, and to pay to the registered holder hereof
interest on said sum from the latest semi-annual interest payment date to which
interest has been paid on the bonds of this series preceding the date hereof,
unless the date hereof be an interest payment date to which interest is being
paid, in which case from the date hereof, or unless the date hereof is prior to
February 15, 2005, in which case from August 17, 2004 (or if this bond is dated
between the record date for any interest payment date and such interest payment
date, then from such interest payment date, provided, however, that if the
Company shall default in payment of the interest due on such interest

                                       26
<PAGE>

payment date, then from the next preceding semi-annual interest payment date to
which interest has been paid on the bonds of this series, or if such interest
payment date is February 15, 2005, from August 17, 2004), at the rate per annum,
until the principal hereof shall have become due and payable, specified in the
title of this bond, payable on February 15 and August 15 in each year. If the
Company does not comply with certain of its obligations under the Registration
Rights Agreement entered into by the Company as of August 17, 2004 (in which
case the Company shall notify the Trustee thereof), the bonds of this series
shall, in accordance with Section 5 of such Registration Rights Agreement, bear
additional interest ("Additional Interest") in addition to the interest provided
for in the immediately preceding sentence. For purposes of the bonds of this
series, the term "interest" shall be deemed to include interest provided for in
the second immediately preceding sentence and Additional Interest, if any.

            The provisions of this bond are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.

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

            IN WITNESS WHEREOF, Consumers Energy Company has caused this bond to
be executed in its name by its Chairman of the Board, its President or one of
its Vice Presidents by his or her signature or a facsimile thereof, and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon
and attested by its Secretary or one of its Assistant Secretaries by his or her
signature or a facsimile thereof.

                                              CONSUMERS ENERGY COMPANY

Dated:

                                              By: ______________________________
                                              Printed: _________________________
                                              Title: ___________________________

Attest: _________________________

                      TRUSTEE'S AUTHENTICATION CERTIFICATE

            This is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.

                                                JPMORGAN CHASE BANK, Trustee

                                                By: ____________________________
                                                        Authorized Officer

                                       27
<PAGE>

                                    [REVERSE]

                            CONSUMERS ENERGY COMPANY

                               FIRST MORTGAGE BOND
                         5.50% SERIES DUE 2016, SERIES M

            The interest payable on any February 15 or August 15 will, subject
to certain exceptions provided in the Indenture hereinafter mentioned, be paid
to the person in whose name this bond is registered at the close of business on
the record date, which shall be the first calendar day of the month next
preceding such interest payment date, or, if such February 15 or August 15 shall
be a legal holiday or a day on which banking institutions in the Borough of
Manhattan, The City of New York, are authorized to close, the next preceding day
which shall not be a legal holiday or a day on which such institutions are so
authorized to close. The principal of and the premium, if any, and interest on
this bond shall be payable at the office or agency of the Company in the Borough
of Manhattan, The City of New York, designated for that purpose, in any coin or
currency of the United States of America which at the time of payment is legal
tender for public and private debts.

            This bond is one of the bonds of a series designated as First
Mortgage Bonds, 5.50% Series due 2016, Series M (sometimes herein referred to as
the "2016 Bonds, Series M" or the "Bonds") issued and to be issued from time to
time under and in accordance with and secured by an indenture dated as of
September 1, 1945, given by the Company (or its predecessor, Consumers Power
Company, a Maine corporation) to City Bank Farmers Trust Company (JPMorgan Chase
Bank, successor) (hereinafter sometimes referred to as the "Trustee"), together
with indentures supplemental thereto, heretofore or hereafter executed, to which
indenture and indentures supplemental thereto (hereinafter referred to
collectively as the "Indenture") reference is hereby made for a description of
the property mortgaged and pledged, the nature and extent of the security and
the rights, duties and immunities thereunder of the Trustee and the rights of
the holders of said bonds and of the Trustee and of the Company in respect of
such security, and the limitations on such rights. By the terms of the
Indenture, the bonds to be secured thereby are issuable in series which may vary
as to date, amount, date of maturity, rate of interest and in other respects as
provided in the Indenture.

            The 2016 Bonds, Series M are redeemable upon notice given by mailing
the same, postage prepaid, not less than thirty days nor more than sixty days
prior to the date fixed for redemption to each registered holder of a bond to be
redeemed (in whole or in part) at the last address of such holder appearing on
the registry books. Any or all of the bonds of this series may be redeemed by
the Company, at any time and from time to time prior to maturity, at a
redemption price equal to the greater of (1) 100% of the principal amount of the
Bonds and (2) the sum of the present values of the Remaining Scheduled Payments
(as defined below) of principal and interest on the Bonds discounted to the
redemption date semiannually (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as defined below), plus 25 basis points,
plus in either case accrued interest on the Bonds 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 (as

                                       28
<PAGE>

defined below), assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price (as
defined below) for such redemption date.

            "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker (as defined below) as
having a maturity comparable to the remaining term of the Bonds 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.

            "Independent Investment Banker" means either Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated or, if such firms are unwilling or unable to select the Comparable
Treasury Issues, an independent banking institution of national standing
selected by the Company.

            "Comparable Treasury Price" means, with respect to any redemption
date, (1) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "H.15(519)" or (2) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (a) the average of the Reference Treasury Dealer Quotations (as
defined below) for such redemption date, after excluding the highest and lowest
of such Reference Treasury Dealer Quotations, or (b) if the Company obtains
fewer than four such Reference Treasury Dealer Quotations, the average of all
such quotations.

            "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer (as defined below) and any redemption date, the
average, as determined by the Company, 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 Company by such Reference Treasury
Dealer at 5:00 p.m. on the third business day preceding such redemption date.

            "Reference Treasury Dealer" means (1) each of Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and their respective successors; provided, however, that if any of
the foregoing shall cease to be a primary U.S. government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall replace that
former dealer with another Primary Treasury Dealer and (2) up to four other
Primary Treasury Dealers selected by the Company.

            "Remaining Scheduled Payments" means, with respect to each Bond to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if that redemption date is prior to an
interest payment date with respect to such Bond, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to that redemption date.

                                       29
<PAGE>

            In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture. The holders of certain specified percentages of the bonds at the time
outstanding, including in certain cases specified percentages of bonds of
particular series, may in certain cases, to the extent and as provided in the
Indenture, waive certain defaults thereunder and the consequences of such
defaults.

            The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than seventy-five per
centum in principal amount of the bonds (exclusive of bonds disqualified by
reason of the Company's interest therein) at the time outstanding, including, if
more than one series of bonds shall be at the time outstanding, not less than
sixty per centum in principal amount of each series affected, to effect, by an
indenture supplemental to the Indenture, modifications or alterations of the
Indenture and of the rights and obligations of the Company and the rights of the
holders of the bonds and coupons; provided, however, that no such modification
or alteration shall be made without the written approval or consent of the
holder hereof which will (a) extend the maturity of this bond or reduce the rate
or extend the time of payment of interest hereon or reduce the amount of the
principal hereof or reduce any premium payable on the redemption hereof, or (b)
permit the creation of any lien, not otherwise permitted, prior to or on a
parity with the lien of the Indenture, or (c) reduce the percentage of the
principal amount of the bonds upon the approval or consent of the holders of
which modifications or alterations may be made as aforesaid.

            The Company reserves the right, without any consent, vote or other
action by holders of the 2016 Bonds, Series M or any other series created after
the Sixty-eighth Supplemental Indenture to amend the Indenture to reduce the
percentage of the principal amount of bonds the holders of which are required to
approve any supplemental indenture (other than any supplemental indenture which
is subject to the proviso contained in the immediately preceding sentence) (a)
from not less than seventy-five per centum (including sixty per centum of each
series affected) to not less than a majority in principal amount of the bonds at
the time outstanding or (b) in case fewer than all series are affected, not less
than a majority in principal amount of the bonds of all affected series, voting
together.

            No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, or otherwise, 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, as such, being waived and released by the holder and
owner hereof by the acceptance of this bond and being likewise waived and
released by the terms of the Indenture.

          [END OF FORM OF REGISTERED BOND OF THE 2016 BONDS, SERIES M]

                                       30
<PAGE>

              [FORM OF REGISTERED BOND OF THE 2016 BONDS, SERIES P]

                                     [FACE]

            THIS BOND IS A GLOBAL BOND REGISTERED IN THE NAME OF THE DEPOSITARY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL BONDS REPRESENTED HEREBY, THIS GLOBAL
BOND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
GLOBAL BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK), A NEW YORK CORPORATION (THE
"DEPOSITARY"), TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

                            CONSUMERS ENERGY COMPANY
                               FIRST MORTGAGE BOND
                         5.50% SERIES DUE 2016, SERIES P

CUSIP: ________________
                                                            $350,000,000
ISIN: ________________

No.: ________________

            CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of Three Hundred Fifty Million Dollars
($350,000,000) on August 15, 2016 and to pay to the registered holder hereof
interest on said sum from the latest semi-annual interest payment date to which
interest has been paid on the bonds of this series preceding the date hereof,
unless the date hereof be an interest payment date to which interest is being
paid, in which case from the date hereof, or unless the date hereof is prior to
February 15, 2005, in which case from August 17, 2004 or unless the date hereof
is after February 15, 2005 but prior to the first date when any interest hereon
has been paid, in which case from the last interest payment date on the
Company's First Mortgage Bonds, 5.50% Series due 2016, Series M, to which
interest has been paid (or if this bond is dated between the record date for any
interest payment

                                       31
<PAGE>

date and such interest payment date, then from such interest payment date,
provided, however, that if the Company shall default in payment of the interest
due on such interest payment date, then from the next preceding semi-annual
interest payment date to which interest has been paid on the bonds of this
series, or if such interest payment date is February 15, 2005, from August 17,
2004), at the rate per annum, until the principal hereof shall have become due
and payable, specified in the title of this bond, payable on February 15 and
August 15 in each year.

            The provisions of this bond are continued on the reverse hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.

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

            IN WITNESS WHEREOF, Consumers Energy Company has caused this bond to
be executed in its name by its Chairman of the Board, its President or one of
its Vice Presidents by his or her signature or a facsimile thereof, and its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon
and attested by its Secretary or one of its Assistant Secretaries by his or her
signature or a facsimile thereof.

                                                 CONSUMERS ENERGY COMPANY

Dated:

                                                 By: ___________________________
                                                 Printed: ______________________
                                                 Title: ________________________

Attest: _________________________

                      TRUSTEE'S AUTHENTICATION CERTIFICATE

            This is one of the bonds, of the series designated therein,
described in the within-mentioned Indenture.

                                                  JPMORGAN CHASE BANK, Trustee

                                                  By: __________________________
                                                          Authorized Officer

                                       32
<PAGE>

                                    [REVERSE]

                            CONSUMERS ENERGY COMPANY

                               FIRST MORTGAGE BOND
                         5.50% SERIES DUE 2016, SERIES P

            The interest payable on any February 15 or August 15 will, subject
to certain exceptions provided in the Indenture hereinafter mentioned, be paid
to the person in whose name this bond is registered at the close of business on
the record date, which shall be the first calendar day of the month next
preceding such interest payment date, or, if such February 15 or August 15 shall
be a legal holiday or a day on which banking institutions in the Borough of
Manhattan, The City of New York, are authorized to close, the next preceding day
which shall not be a legal holiday or a day on which such institutions are so
authorized to close. The principal of and the premium, if any, and interest on
this bond shall be payable at the office or agency of the Company in the Borough
of Manhattan, The City of New York, designated for that purpose, in any coin or
currency of the United States of America which at the time of payment is legal
tender for public and private debts.

            This bond is one of the bonds of a series designated as First
Mortgage Bonds, 5.50% Series due 2016, Series P (sometimes herein referred to as
the "2016 Bonds, Series P" or the "Bonds") issued and to be issued from time to
time under and in accordance with and secured by an indenture dated as of
September 1, 1945, given by the Company (or its predecessor, Consumers Power
Company, a Maine corporation) to City Bank Farmers Trust Company (JPMorgan Chase
Bank, successor) (hereinafter sometimes referred to as the "Trustee"), together
with indentures supplemental thereto, heretofore or hereafter executed, to which
indenture and indentures supplemental thereto (hereinafter referred to
collectively as the "Indenture") reference is hereby made for a description of
the property mortgaged and pledged, the nature and extent of the security and
the rights, duties and immunities thereunder of the Trustee and the rights of
the holders of said bonds and of the Trustee and of the Company in respect of
such security, and the limitations on such rights. By the terms of the
Indenture, the bonds to be secured thereby are issuable in series which may vary
as to date, amount, date of maturity, rate of interest and in other respects as
provided in the Indenture.

            The 2016 Bonds, Series P are redeemable upon notice given by mailing
the same, postage prepaid, not less than thirty days nor more than sixty days
prior to the date fixed for redemption to each registered holder of a bond to be
redeemed (in whole or in part) at the last address of such holder appearing on
the registry books. Any or all of the bonds of this series may be redeemed by
the Company, at any time and from time to time prior to maturity, at a
redemption price equal to the greater of (1) 100% of the principal amount of the
Bonds and (2) the sum of the present values of the Remaining Scheduled Payments
(as defined below) of principal and interest on the Bonds discounted to the
redemption date semiannually (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as defined below), plus 25 basis points,
plus in either case accrued interest on the Bonds 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 (as

                                       33
<PAGE>

defined below), assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price (as
defined below) for such redemption date.

            "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker (as defined below) as
having a maturity comparable to the remaining term of the Bonds 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.

            "Independent Investment Banker" means either Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated or, if such firms are unwilling or unable to select the Comparable
Treasury Issues, an independent banking institution of national standing
selected by the Company.

            "Comparable Treasury Price" means, with respect to any redemption
date, (1) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "H.15(519)" or (2) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (a) the average of the Reference Treasury Dealer Quotations (as
defined below) for such redemption date, after excluding the highest and lowest
of such Reference Treasury Dealer Quotations, or (b) if the Company obtains
fewer than four such Reference Treasury Dealer Quotations, the average of all
such quotations.

            "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer (as defined below) and any redemption date, the
average, as determined by the Company, 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 Company by such Reference Treasury
Dealer at 5:00 p.m. on the third business day preceding such redemption date.

            "Reference Treasury Dealer" means (1) each of Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and their respective successors; provided, however, that if any of
the foregoing shall cease to be a primary U.S. government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall replace that
former dealer with another Primary Treasury Dealer and (2) up to four other
Primary Treasury Dealers selected by the Company.

            "Remaining Scheduled Payments" means, with respect to each Bond to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that, if that redemption date is prior to an
interest payment date with respect to such Bond, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to that redemption date.

                                       34
<PAGE>

            In case of certain defaults as specified in the Indenture, the
principal of this bond may be declared or may become due and payable on the
conditions, at the time, in the manner and with the effect provided in the
Indenture. The holders of certain specified percentages of the bonds at the time
outstanding, including in certain cases specified percentages of bonds of
particular series, may in certain cases, to the extent and as provided in the
Indenture, waive certain defaults thereunder and the consequences of such
defaults.

            The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than seventy-five per
centum in principal amount of the bonds (exclusive of bonds disqualified by
reason of the Company's interest therein) at the time outstanding, including, if
more than one series of bonds shall be at the time outstanding, not less than
sixty per centum in principal amount of each series affected, to effect, by an
indenture supplemental to the Indenture, modifications or alterations of the
Indenture and of the rights and obligations of the Company and the rights of the
holders of the bonds and coupons; provided, however, that no such modification
or alteration shall be made without the written approval or consent of the
holder hereof which will (a) extend the maturity of this bond or reduce the rate
or extend the time of payment of interest hereon or reduce the amount of the
principal hereof or reduce any premium payable on the redemption hereof, or (b)
permit the creation of any lien, not otherwise permitted, prior to or on a
parity with the lien of the Indenture, or (c) reduce the percentage of the
principal amount of the bonds upon the approval or consent the holders of which
modifications or alterations may be made as aforesaid.

            The Company reserves the right, without any consent, vote or other
action by holders of the 2016 Bonds, Series P or any other series created after
the Sixty-eighth Supplemental Indenture to amend the Indenture to reduce the
percentage of the principal amount of bonds the holders of which are required to
approve any supplemental indenture (other than any supplemental indenture which
is subject to the proviso contained in the immediately preceding sentence) (a)
from not less than seventy-five per centum (including sixty per centum of each
series affected) to not less than a majority in principal amount of the bonds at
the time outstanding or (b) in case fewer than all series are affected, not less
than a majority in principal amount of the bonds of all affected series, voting
together.

            No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, director or officer, past, present or future, as such, of the
Company, or of any predecessor or successor company, either directly or through
the Company, or such predecessor or successor company, or otherwise, 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, as such, being waived and released by the holder and
owner hereof by the acceptance of this bond and being likewise waived and
released by the terms of the Indenture.

          [END OF FORM OF REGISTERED BOND OF THE 2016 BONDS, SERIES P]

                                       35
<PAGE>

            AND WHEREAS all acts and things necessary to make the 2009 Bonds,
Series K, the 2009 Bonds, Series N, the 2012 Bonds, Series L, the 2012 Bonds,
Series O, the 2016 Bonds, Series M and the 2016 Bonds, Series P (collectively
referred to herein as the "Bonds"), when duly executed by the Company and
authenticated by the Trustee or its agent and issued as prescribed in the
Indenture, as heretofore supplemented and amended, this Supplemental Indenture,
the valid, binding and legal obligations of the Company, and to constitute the
Indenture, as supplemented and amended as aforesaid, as well as by this
Supplemental Indenture, a valid, binding and legal instrument for the security
thereof, have been done and performed, and the creation, execution and delivery
of this Supplemental Indenture and the creation, execution and issuance of bonds
subject to the terms hereof and of the Indenture, as so supplemented and
amended, have in all respects been duly authorized;

            NOW, THEREFORE, in consideration of the premises, of the acceptance
and purchase by the holders thereof of the bonds issued and to be issued under
the Indenture, as supplemented and amended as above set forth, duly paid by the
Trustee to the Company, and of other good and valuable considerations, the
receipt whereof is hereby acknowledged, and for the purpose of securing the due
and punctual payment of the principal of and premium, if any, and interest on
all bonds now outstanding under the Indenture and the $150,000,000 principal
amount of the 2009 Bonds, Series K, the $300,000,000 principal amount of the
2012 Bonds, Series L and the $350,000,000 principal amount of the 2016 Bonds,
Series M and of the Exchange Bonds, if issued, and all other bonds which shall
be issued under the Indenture, as supplemented and amended from time to time,
and for the purpose of securing the faithful performance and observance of all
covenants and conditions therein, and in any indenture supplemental thereto, set
forth, the Company has given, granted, bargained, sold, released, transferred,
assigned, hypothecated, pledged, mortgaged, confirmed, set over, warranted,
alienated and conveyed and by these presents does give, grant, bargain, sell,
release, transfer, assign, hypothecate, pledge, mortgage, confirm, set over,
warrant, alienate and convey unto JPMorgan Chase Bank, as Trustee, as provided
in the Indenture, and its successor or successors in the trust thereby and
hereby created and to its or their assigns forever, all the right, title and
interest of the Company in and to all the property, described in Section 14
hereof, together (subject to the provisions of Article X of the Indenture) with
the tolls, rents, revenues, issues, earnings, income, products and profits
thereof, excepting, however, the property, interests and rights specifically
excepted from the lien of the Indenture as set forth in the Indenture;

            TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in any wise appertaining to the premises, property,
franchises and rights, or any thereof, referred to in the foregoing granting
clause, with the reversion and reversions, remainder and remainders and (subject
to the provisions of Article X of the Indenture) the tolls, rents, revenues,
issues, earnings, income, products and profits thereof, and all the estate,
right, title and interest and claim whatsoever, at law as well as in equity,
which the Company now has or may hereafter acquire in and to the aforesaid
premises, property, franchises and rights and every part and parcel thereof;

            SUBJECT, HOWEVER, with respect to such premises, property,
franchises and rights, to excepted encumbrances as said term is defined in
Section 1.02 of the Indenture, and subject also to all defects and limitations
of title and to all encumbrances existing at the time of acquisition.

                                       36
<PAGE>

            TO HAVE AND TO HOLD all said premises, property, franchises and
rights hereby conveyed, assigned, pledged or mortgaged, or intended so to be,
unto the Trustee, its successor or successors in trust and their assigns
forever;

            BUT IN TRUST, NEVERTHELESS, with power of sale for the equal and
proportionate benefit and security of the holders of all bonds now or hereafter
authenticated and delivered under and secured by the Indenture and interest
coupons appurtenant thereto, pursuant to the provisions of the Indenture and of
any supplemental indenture, and for the enforcement of the payment of said bonds
and coupons when payable and the performance of and compliance with the
covenants and conditions of the Indenture and of any supplemental indenture,
without any preference, distinction or priority as to lien or otherwise of any
bond or bonds over others by reason of the difference in time of the actual
authentication, delivery, issue, sale or negotiation thereof or for any other
reason whatsoever, except as otherwise expressly provided in the Indenture; and
so that each and every bond now or hereafter authenticated and delivered
thereunder shall have the same lien, and so that the principal of and premium,
if any, and interest on every such bond shall, subject to the terms thereof, be
equally and proportionately secured, as if it had been made, executed,
authenticated, delivered, sold and negotiated simultaneously with the execution
and delivery thereof;

            AND IT IS EXPRESSLY DECLARED by the Company that all bonds
authenticated and delivered under and secured by the Indenture, as supplemented
and amended as above set forth, are to be issued, authenticated and delivered,
and all said premises, property, franchises and rights hereby and by the
Indenture and indentures supplemental thereto conveyed, assigned, pledged or
mortgaged, or intended so to be, are to be dealt with and disposed of under,
upon and subject to the terms, conditions, stipulations, covenants, agreements,
trusts, uses and purposes expressed in the Indenture, as supplemented and
amended as above set forth, and the parties hereto mutually agree as follows:

            SECTION 1. There is hereby created one series of bonds (the 2009
Bonds, Series K) designated as hereinabove provided, which shall also bear the
descriptive title "First Mortgage Bond", and the form thereof shall be
substantially as hereinbefore set forth. The 2009 Bonds, Series K shall be
issued in the aggregate principal amount of $150,000,000, shall mature on August
15, 2009 and shall be issued only as registered bonds without coupons in
denominations of $1,000 and any multiple thereof. The serial numbers of the 2009
Bonds, Series K shall be such as may be approved by any officer of the Company,
the execution thereof by any such officer either manually or by facsimile
signature to be conclusive evidence of such approval. The 2009 Bonds, Series K
shall bear interest at the rate per annum, until the principal thereof shall
have become due and payable, specified in the title thereto, payable
semi-annually on February 15 and August 15 in each year. If the Company does not
comply with certain of its obligations under the Registration Rights Agreement,
(in which case the Company shall notify the Trustee thereof), the 2009 Bonds,
Series K shall, in accordance with Section 5 of the Registration Rights
Agreement, bear additional interest ("Additional Interest") in addition to the
interest provided for in the immediately preceding sentence. For purposes of
this Supplemental Indenture and the 2009 Bonds, Series K, the term "interest"
shall be deemed to include interest provided for in the second immediately
preceding sentence and Additional Interest, if any. The principal of and the
premium, if any, and the interest on said bonds shall be payable in any coin or
currency of the United States of America which at the time of payment is legal
tender for

                                       37
<PAGE>

public and private debts, at the office or agency of the Company in the City of
New York, designated for that purpose.

            SECTION 2. There is hereby created one series of bonds (the 2012
Bonds, Series L) designated as hereinabove provided, which shall also bear the
descriptive title "First Mortgage Bond", and the form thereof shall be
substantially as hereinbefore set forth. The 2012 Bonds, Series L shall be
issued in the aggregate principal amount of $300,000,000 shall mature on
February 15, 2012 and shall be issued only as registered bonds without coupons
in denominations of $1,000 and any multiple thereof. The serial numbers of the
2012 Bonds, Series L shall be such as may be approved by any officer of the
Company, the execution thereof by any such officer either manually or by
facsimile signature to be conclusive evidence of such approval. The 2012 Bonds,
Series L shall bear interest at the rate per annum, until the principal thereof
shall have become due and payable, specified in the title thereto, payable
semi-annually on February 15 and August 15 in each year. If the Company does not
comply with certain of its obligations under the Registration Rights Agreement,
(in which case the Company shall notify the Trustee thereof), the 2012 Bonds,
Series L shall, in accordance with Section 5 of the Registration Rights
Agreement, bear Additional Interest in addition to the interest provided for in
the immediately preceding sentence. For purposes of this Supplemental Indenture
and the 2012 Bonds, Series L, the term "interest" shall be deemed to include
interest provided for in the second immediately preceding sentence and
Additional Interest, if any. The principal of and the premium, if any, and the
interest on said bonds shall be payable in any coin or currency of the United
States of America which at the time of payment is legal tender for public and
private debts, at the office or agency of the Company in the City of New York,
designated for that purpose.

            SECTION 3. There is hereby created one series of bonds (the 2016
Bonds, Series M) designated as hereinabove provided, which shall also bear the
descriptive title "First Mortgage Bond", and the form thereof shall be
substantially as hereinbefore set forth. The 2016 Bonds, Series M shall be
issued in the aggregate principal amount of $350,000,000, shall mature on August
15, 2016 and shall be issued only as registered bonds without coupons in
denominations of $1,000 and any multiple thereof. The serial numbers of the 2016
Bonds, Series M shall be such as may be approved by any officer of the Company,
the execution thereof by any such officer either manually or by facsimile
signature to be conclusive evidence of such approval. The 2016 Bonds, Series M
shall bear interest at the rate per annum, until the principal thereof shall
have become due and payable, specified in the title thereto, payable
semi-annually on February 15 and August 15 in each year. If the Company does not
comply with certain of its obligations under the Registration Rights Agreement,
(in which case the Company shall notify the Trustee thereof), the 2016 Bonds,
Series M shall, in accordance with Section 5 of the Registration Rights
Agreement, bear Additional Interest in addition to the interest provided for in
the immediately preceding sentence. For purposes of this Supplemental Indenture
and the 2016 Bonds, Series M, the term "interest" shall be deemed to include
interest provided for in the second immediately preceding sentence and
Additional Interest, if any. The principal of and the premium, if any, and the
interest on said bonds shall be payable in any coin or currency of the United
States of America which at the time of payment is legal tender for public and
private debts, at the office or agency of the Company in the City of New York,
designated for that purpose.

                                       38
<PAGE>

            SECTION 4. The Company and the Initial Purchasers have entered into
the Registration Rights Agreement. The Registration Rights Agreement provides
the 2009 Bonds, Series K, the 2012 Bonds, Series L and the 2016 Bonds, Series M
that are issued and sold without registration under the Securities Act may be
exchanged for the 2009 Bonds, Series N, the 2012 Bonds, Series O and the 2016
Bonds, Series P, respectively, each of which will be registered under the
Securities Act and will otherwise have substantially the same terms as the 2009
Bonds, Series K, the 2012 Bonds, Series L and the 2016 Bonds, Series M,
respectively. In the event such exchange does not occur, the Company is required
to cause a Shelf Registration Statement as defined in and pursuant to the
Registration Rights Agreement to be declared effective with respect to the 2009
Bonds, Series K, the 2012 Bonds, Series L and/or the 2016 Bonds, Series M.

            SECTION 5. Terms of Bonds.

            5.01 Form of Bonds.

            (a)The 2009 Bonds, Series K, the 2012 Bonds, Series L and the 2016
Bonds, Series M offered and sold to a Qualified Institutional Buyer (within the
meaning of Rule 144A under the Securities Act) in reliance on Rule 144A under
the Securities Act ("Rule 144A") or in reliance on Regulation S under the
Securities Act ("Regulation S"), in each case as provided in the Purchase
Agreement, shall in each case be issued initially in the form of one or more
permanent Global Bonds in definitive, fully registered form without interest
coupons with the global securities legend and restricted securities legend set
forth in Section 5.02(b) hereof (each, a "Restricted Global Bond"), which shall
be deposited on behalf of the purchasers of the Initial Bonds represented
thereby with the Trustee, at its corporate trust office, as securities custodian
(or with such other securities custodian as the Depository (as defined below)
may direct), and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Bonds may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depository or its nominee as hereinafter provided.
Exchange Bonds shall be issued in global form. Exchange Bonds issued in global
form and Restricted Global Bonds are sometimes referred to in this Supplemental
Indenture as "Global Bonds." The Depositary for the Global Bonds shall be The
Depository Trust Company, a New York corporation, or its duly appointed
successor (the "Depository").

            (b)This Section 5.01(b) shall apply only to a Global Bond deposited
with or on behalf of the Depository.

            The Company shall execute and the Trustee shall, in the case of each
of the 2009 Bonds, Series K, the 2009 Bonds, Series N, the 2012 Bonds, Series L,
the 2012 Bonds, Series O, the 2016 Bonds, Series M and the 2016 Bonds, Series P,
in accordance with this Section 5.01(b), authenticate and deliver initially one
or more Global Bonds that (a) shall be registered in the name of the Depository
or the nominee of the Depository and (b) shall be delivered by the Trustee to
the Depository or pursuant to the Depository's instructions or held by the
Trustee as securities custodian.

                                       39
<PAGE>

            Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Supplemental Indenture with respect to any
Global Bond held on their behalf by the Depository or by the Trustee as the
securities custodian or under such Global Bond, and the Company, the Trustee and
any agent of the Company or the Trustee shall be entitled to treat the
Depository as the absolute owner of such Global Bond for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Bond.

            (c)Except as provided in this Section 5.01, Section 5.02 or Section
5.03, owners of beneficial interests in Restricted Global Bonds shall not be
entitled to receive physical delivery of certificated Bonds.

            5.02 Transfer and Exchange.

            (a) Transfer and Exchange of Global Bonds.

                  (i) The transfer and exchange of Global Bonds or beneficial
      interests therein shall be effected through the Depository, in accordance
      with this Supplemental Indenture (including applicable restrictions on
      transfer set forth herein, if any) and the procedures of the Depository
      therefor.

                  (ii) Notwithstanding any other provision of this Supplemental
      Indenture (other than the provisions set forth in Section 5.03), a Global
      Bond may not be transferred as a whole except by the Depository to a
      nominee of the Depository or by a nominee of the Depository to the
      Depository or another nominee of the Depository or by the Depository or
      any such nominee to a successor Depository or a nominee of such successor
      Depository.

                  (iii) In the event that a Restricted Global Bond is exchanged
      for Bonds in certificated registered form pursuant to Section 5.03 prior
      to the consummation of a registered exchange offer or the effectiveness of
      a Shelf Registration Statement (as defined in the Registration Rights
      Agreement) with respect to such Initial Bonds, such Restricted Global Bond
      may be exchanged only in accordance with such procedures as are
      substantially consistent with the provisions of this Section 5.02 and such
      other procedures as may from time to time be adopted by the Company;
      provided, however, the Trustee shall be notified of such event.

            (b) Legend.

                  (i) Except as permitted by the following paragraphs (ii),
      (iii) and (iv), each Bond certificate evidencing a Transfer Restricted
      Security (as defined in the Registration Rights Agreement) shall bear a
      legend in substantially the following form:

      THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
      SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")

                                       40
<PAGE>

      AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
      (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
      INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES
      ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
      INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
      UNDER THE SECURITIES ACT, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH
      RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3)
      PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
      PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) IN ACCORDANCE WITH
      ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
      ACT, (5) TO CONSUMERS ENERGY COMPANY OR (6) PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH
      ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.

                  (ii) Upon any sale or transfer of a Transfer Restricted
      Security (as defined in the Registration Rights Agreement) (including any
      Transfer Restricted Security (as defined in the Registration Rights
      Agreement) represented by a Restricted Global Bond) pursuant to Rule 144,
      the security registrar shall, subject to approval by the Company, permit
      the transferee thereof to exchange such Transfer Restricted Security (as
      defined in the Registration Rights Agreement) for a certificated Bond that
      does not bear the legend set forth above and rescind any restriction on
      the transfer of such Transfer Restricted Security (as defined in the
      Registration Rights Agreement), if the transferor thereof certifies in
      writing to the security registrar that such sale or transfer was made in
      reliance on Rule 144.

                  (iii) After a transfer of any Initial Bonds pursuant to and
      during the period of the effectiveness of a Shelf Registration Statement
      (as defined in the Registration Rights Agreement) with respect to such
      Initial Bonds all requirements pertaining to legends on such Initial Bonds
      with respect to such Bonds transferred will cease to apply and Initial
      Bonds in global form, without restrictive transfer legends, will be
      available to the transferee of the holder of such Initial Bonds upon
      written directions to transfer such holder's interest in the Global Bond.

                  (iv) Upon the consummation of a registered exchange offer with
      respect to the Initial Bonds, Exchange Bonds in global form will be
      available to holders that exchange such Initial Bonds in such registered
      exchange offer.

            (c) Cancellation or Adjustment of Global Bond. At such time as all
beneficial interests in a Global Bond have either been exchanged for
certificated Bonds, redeemed, purchased or canceled, such Global Bond shall be
canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Bond is exchanged for certificated Bonds,
redeemed, purchased or canceled, the principal amount of Bonds represented by
such Global Bond shall be reduced and an adjustment shall be made on the books
and records of the securities custodian with respect to such Global Bond.

                                       41
<PAGE>

            (d) Obligations with Respect to Transfers and Exchanges of Bonds.

                  (i) To permit registrations of transfers and exchanges, the
      Company shall execute and the Trustee shall authenticate certificated
      Bonds and Global Bonds at the security registrar's request.

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

                  (iii) Prior to the due presentation for registration of
      transfer of any Bond, the Company, the Trustee, the paying agent or the
      security registrar may deem and treat the person in whose name a Bond is
      registered as the absolute owner of such Bond for the purpose of receiving
      payment of principal of and interest on such Bond and for all other
      purposes whatsoever, whether or not such Bond is overdue, and none of the
      Company, the Trustee, the paying agent or the security registrar shall be
      affected by notice to the contrary.

                  (iv) All Bonds issued upon any transfer or exchange pursuant
      to the terms of the Indenture shall evidence the same debt and shall be
      entitled to the same benefits under the Indenture as the Bonds surrendered
      upon such transfer or exchange.

            (e) No Obligation of Trustee.

                  (i) The Trustee (whether in its capacity as Trustee or
      otherwise) shall have no responsibility or obligation to any beneficial
      owner of a Global Bond, Agent Member or other person with respect to the
      accuracy of the records of the Depository or its nominee or of any Agent
      Member, with respect to any ownership interest in the Bonds or with
      respect to the delivery to any Agent Member, beneficial owner or other
      person (other than the Depository) of any notice (including any notice of
      redemption) or the payment of any amount, under or with respect to such
      Bonds. All notices and communications to be given to the holders and all
      payments to be made to holders under the Bonds shall be given or made only
      to or upon the order of the registered holders (which shall be the
      Depository or its nominee in the case of a Global Bond). The rights of
      beneficial owners in any Global Bond shall be exercised only through the
      Depository subject to the applicable rules and procedures of the
      Depository. The Trustee may rely and shall be fully protected in relying
      upon information furnished by the Depository with respect to its Agent
      Members and any beneficial owners.

                  (ii) The Trustee shall have no obligation or duty to monitor,
      determine or inquire as to compliance with any restrictions on transfer
      imposed under this Supplemental Indenture or under applicable law with
      respect to any transfer of any interest in any Bond (including any
      transfers between or among Agent Members or beneficial owners in any
      Global Bond) other than to require delivery of such certificates and other
      documentation or evidence as are expressly required by, and to do so if
      and when expressly required by, the terms of the Indenture.

                                       42
<PAGE>

            5.03 Certificated Bonds.

            (a) A Global Bond deposited with the Depository or with the Trustee
as securities custodian pursuant to Section 5.01 shall be transferred to the
beneficial owners thereof in the form of certificated Bonds in an aggregate
principal amount equal to the principal amount of such Global Bond, in exchange
for such Global Bond, only if such transfer complies with this Section 5.03 and
the conditions set forth in Article II of the Indenture.

            (b) Any Global Bond that is transferable to the beneficial owners
thereof pursuant to this Section 5.03 shall be surrendered by the Depository to
the Trustee at its corporate trust office to be so transferred, in whole or from
time to time in part, without charge, and the Trustee shall authenticate and
deliver, upon such transfer of each portion of such Global Bond, an equal
aggregate principal amount of certificated Bonds of authorized denominations.
Any portion of a Global Bond transferred pursuant to this Section 5.03 shall be
executed, authenticated and delivered only in denominations of $1,000 principal
amount and any integral multiple thereof and registered in such names as the
Depository shall direct. Any certificated Initial Bond delivered in exchange for
an interest in the Global Bond shall bear the restricted securities legend set
forth in Section 5.02(b) hereof.

            (c) Subject to the provisions of Section 5.03(b), the registered
holder of a Global Bond shall be entitled to grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a holder is entitled
to take under the Indenture or the Bonds.

            5.04 Issuance of Exchange Bonds. The Trustee shall not authenticate
the 2009 Bonds, Series N, the 2012 Bonds, Series O or the 2016 Bonds, Series P
for issuance until (i) such bonds are issued in principal amount equal to the
principal amount of retired 2009 Bonds, Series K, 2012 Bonds, Series L and 2016
Bonds, Series M, respectively, made the basis for such issuance in accordance
with Article V of the Indenture and (ii) the Trustee shall have received (or
shall receive concurrently with the granting of the application of the Company
for the authentication and delivery by the Trustee of such bonds) the documents
required by Article V of the Indenture.

            SECTION 6. The 2009 Bonds, Series K, the 2009 Bonds, Series N, the
2012 Bonds, Series L, the 2012 Bonds, Series O, the 2016 Bonds, Series M and the
2016 Bonds, Series P, are redeemable upon notice given by mailing the same,
postage prepaid, not less than thirty days nor more than sixty days prior to the
date fixed for redemption to each registered holder of a bond to be redeemed (in
whole or in part) at the last address of such holder appearing on the registry
books. Any or all of the bonds of this series may be redeemed by the Company, at
any time and from time to time prior to maturity, at a redemption price equal to
the greater of (1) 100% of the principal amount of the Bonds and (2) the sum of
the present values of the Remaining Scheduled Payments (as defined below) of
principal and interest on the Bonds discounted to the redemption date
semiannually (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate (as defined below), plus: (i) in the case of the 2009 Bonds,
Series K, the 2009 Bonds, Series N, the 2012 Bonds, Series L or the 2012 Bonds,
Series O, 20 basis points plus accrued interest on the Bonds to the date of
redemption and (ii) in the case of

                                       43
<PAGE>

the 2016 Bonds, Series M or the 2016 Bonds, Series P, 25 basis points plus
accrued interest on the Bonds 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 (as defined below), assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price (as defined below) for such redemption date.

            "Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker (as defined below) as
having a maturity comparable to the remaining term of the Bonds 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.

            "Independent Investment Banker" means either Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, or, if such firms are unwilling or unable to select the Comparable
Treasury Issues, an independent banking institution of national standing
selected by the Company.

            "Comparable Treasury Price" means, with respect to any redemption
date, (1) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "H.15(519)" or (2) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (a) the average of the Reference Treasury Dealer Quotations (as
defined below) for such redemption date, after excluding the highest and lowest
of such Reference Treasury Dealer Quotations, or (b) if the Company obtains
fewer than four such Reference Treasury Dealer Quotations, the average of all
such quotations.

            "Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer (as defined below) and any redemption date, the
average, as determined by the Company, 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 Company by such Reference Treasury
Dealer at 5:00 p.m. on the third business day preceding such redemption date.

            "Reference Treasury Dealer" means (1) each of Barclays Capital Inc.,
Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, and their respective successors; provided, however, that if any of
the foregoing shall cease to be a primary U.S. government securities dealer in
New York City (a "Primary Treasury Dealer"), the Company shall replace that
former dealer with another Primary Treasury Dealer and (2) up to four other
Primary Treasury Dealers selected by the Company.

            "Remaining Scheduled Payments" means, with respect to each Bond to
be redeemed, the remaining scheduled payments of the principal thereof and
interest thereon that would be due after the related redemption date but for
such redemption; provided, however, that,

                                       44
<PAGE>

if that redemption date is prior to an interest payment date with respect to
such Bond, the amount of the next succeeding scheduled interest payment thereon
will be reduced by the amount of interest accrued thereon to that redemption
date.

            SECTION 7. The 2009 Bonds, Series K, the 2009 Bonds, Series N, the
2012 Bonds, Series L, the 2012 Bonds, Series O, the 2016 Bonds, Series M and the
2016 Bonds, Series P are not redeemable by the operation of the maintenance and
replacement provisions of the Indenture or with the proceeds of released
property or in any other manner except as set forth in Section 6 hereof.

            SECTION 8. The Company reserves the right, without any consent, vote
or other action by the holders of the 2009 Bonds, Series K, the 2009 Bonds,
Series N, the 2012 Bonds, Series L, the 2012 Bonds, Series O, the 2016 Bonds,
Series M and the 2016 Bonds, Series P, or of any subsequent series of bonds
issued under the Indenture, to make such amendments to the Indenture, as
supplemented, as shall be necessary in order to amend Section 17.02 to read as
follows:

            SECTION 17.02. With the consent of the holders of not less than a
            majority in principal amount of the bonds at the time outstanding or
            their attorneys-in-fact duly authorized, or, if fewer than all
            series are affected, not less than a majority in principal amount of
            the bonds at the time outstanding of each series the rights of the
            holders of which are affected, voting together, the Company, when
            authorized by a resolution, and the Trustee may from time to time
            and at any time enter into an indenture or indentures supplemental
            hereto for the purpose of adding any provisions to or changing in
            any manner or eliminating any of the provisions of this Indenture or
            of any supplemental indenture or modifying the rights and
            obligations of the Company and the rights of the holders of any of
            the bonds and coupons; provided, however, that no such supplemental
            indenture shall (1) extend the maturity of any of the bonds or
            reduce the rate or extend the time of payment of interest thereon,
            or reduce the amount of the principal thereof, or reduce any premium
            payable on the redemption thereof, without the consent of the holder
            of each bond so affected, or (2) permit the creation of any lien,
            not otherwise permitted, prior to or on a parity with the lien of
            this Indenture, without the consent of the holders of all the bonds
            then outstanding, or (3) reduce the aforesaid percentage of the
            principal amount of bonds the holders of which are required to
            approve any such supplemental indenture, without the consent of the
            holders of all the bonds then outstanding. For the purposes of this
            Section, bonds shall be deemed to be affected by a supplemental
            indenture if such supplemental indenture adversely affects or
            diminishes the rights of holders thereof against the Company or
            against its property. The Trustee may in its discretion determine
            whether or not, in accordance with the foregoing, bonds of any
            particular series would be affected by any supplemental indenture
            and any such determination shall be conclusive upon the holders of
            bonds of such series and all other series. Subject to

                                       45
<PAGE>

            the provisions of Sections 16.02 and 16.03 hereof, the Trustee shall
            not be liable for any determination made in good faith in connection
            herewith.

                  Upon the written request of the Company, accompanied by a
            resolution authorizing the execution of any such supplemental
            indenture, and upon the filing with the Trustee of evidence of the
            consent of bondholders as aforesaid (the instrument or instruments
            evidencing such consent to be dated within one year of such
            request), the Trustee shall join with the Company in the execution
            of such supplemental indenture unless such supplemental indenture
            affects the Trustee's own rights, duties or immunities under this
            Indenture or otherwise, in which case the Trustee may in its
            discretion but shall not be obligated to enter into such
            supplemental indenture.

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

                  The Company and the Trustee, if they so elect, and either
            before or after such consent has been obtained, may require the
            holder of any bond consenting to the execution of any such
            supplemental indenture to submit his bond to the Trustee or to ask
            such bank, banker or trust company as may be designated by the
            Trustee for the purpose, for the notation thereon of the fact that
            the holder of such bond has consented to the execution of such
            supplemental indenture, and in such case such notation, in form
            satisfactory to the Trustee, shall be made upon all bonds so
            submitted, and such bonds bearing such notation shall forthwith be
            returned to the persons entitled thereto.

                  Prior to the execution by the Company and the Trustee of any
            supplemental indenture pursuant to the provisions of this Section,
            the Company shall publish a notice, setting forth in general terms
            the substance of such supplemental indenture, at least once in one
            daily newspaper of general circulation in each city in which the
            principal of any of the bonds shall be payable, or, if all bonds
            outstanding shall be registered bonds without coupons or coupon
            bonds registered as to principal, such notice shall be sufficiently
            given if mailed, first class, postage prepaid, and registered if the
            Company so elects, to each registered holder of bonds at the last
            address of such holder appearing on the registry books, such
            publication or mailing, as the case may be, to be made not less than
            thirty days prior to such execution. Any failure of the Company to
            give such notice, or any defect therein, shall not, however, in any
            way impair or affect the validity of any such supplemental
            indenture.

                                       46
<PAGE>

            SECTION 9. As supplemented and amended as above set forth, the
Indenture is in all respects ratified and confirmed, and the Indenture and all
indentures supplemental thereto shall be read, taken and construed as one and
the same instrument.

            SECTION 10. The Trustee assumes no responsibility for or in respect
of the validity or sufficiency of this Supplemental Indenture or of the
Indenture as hereby supplemented or the due execution hereof by the Company or
for or in respect of the recitals and statements contained herein (other than
those contained in the sixth, seventh and eighth recitals hereof), all of which
recitals and statements are made solely by the Company.

            SECTION 11. This Supplemental Indenture may be simultaneously
executed in several counterparts and all such counterparts executed and
delivered, each as an original, shall constitute but one and the same
instrument.

            SECTION 12. In the event the date of any notice required or
permitted hereunder shall not be a Business Day (as defined below), then
(notwithstanding any other provision of the Indenture or of any supplemental
indenture thereto) such notice need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the date fixed for such notice. "Business Day" means, with respect to this
Section 12, any day, other than a Saturday or Sunday, on which banks generally
are open in New York, New York for the conduct of substantially all of their
commercial lending activities and on which interbank wire transfers can be made
on the Fedwire system.

            SECTION 13. This Supplemental Indenture, the 2009 Bonds, Series K,
the 2009 Bonds, Series N, the 2012 Bonds, Series L, the 2012 Bonds, Series O,
the 2016 Bonds, Series M and the 2016 Bonds, Series P shall be governed by and
deemed to be a contract under, and construed in accordance with, the laws of the
State of Michigan, and for all purposes shall be construed in accordance with
the laws of such state, except as may otherwise be required by mandatory
provisions of law.

            SECTION 14. Detailed Description of Property Mortgaged:

                                       I.

                       ELECTRIC GENERATING PLANTS AND DAMS

            All the electric generating plants and stations of the Company,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture, including all powerhouses, buildings, reservoirs, dams,
pipelines, flumes, structures and works and the land on which the same are
situated and all water rights and all other lands and easements, rights of way,
permits, privileges, towers, poles, wires, machinery, equipment, appliances,
appurtenances and supplies and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with such
plants and stations or any of them, or adjacent thereto.

                                       47
<PAGE>

                                      II.

                           ELECTRIC TRANSMISSION LINES

            All the electric transmission lines of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including towers, poles, pole lines, wires, switches, switch racks,
switchboards, insulators and other appliances and equipment, and all other
property, real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with such transmission lines or any of them or
adjacent thereto; together with all real property, rights of way, easements,
permits, privileges, franchises and rights for or relating to the construction,
maintenance or operation thereof, through, over, under or upon any private
property or any public streets or highways, within as well as without the
corporate limits of any municipal corporation. Also all the real property,
rights of way, easements, permits, privileges and rights for or relating to the
construction, maintenance or operation of certain transmission lines, the land
and rights for which are owned by the Company, which are either not built or now
being constructed.

                                      III.

                          ELECTRIC DISTRIBUTION SYSTEMS

            All the electric distribution systems of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including substations, transformers, switchboards, towers, poles, wires,
insulators, subways, trenches, conduits, manholes, cables, meters and other
appliances and equipment, and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with such
distribution systems or any of them or adjacent thereto; together with all real
property, rights of way, easements, permits, privileges, franchises, grants and
rights, for or relating to the construction, maintenance or operation thereof,
through, over, under or upon any private property or any public streets or
highways within as well as without the corporate limits of any municipal
corporation.

                                      IV.

               ELECTRIC SUBSTATIONS, SWITCHING STATIONS AND SITES

            All the substations, switching stations and sites of the Company,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture, for transforming, regulating, converting or distributing or
otherwise controlling electric current at any of its plants and elsewhere,
together with all buildings, transformers, wires, insulators and other
appliances and equipment, and all other property, real or personal, forming a
part of or appertaining to or used, occupied or enjoyed in connection with any
of such substations and switching stations, or adjacent thereto, with sites to
be used for such purposes.

                                       48
<PAGE>

                                       V.

        GAS COMPRESSOR STATIONS, GAS PROCESSING PLANTS, DESULPHURIZATION
      STATIONS, METERING STATIONS, ODORIZING STATIONS, REGULATORS AND SITES

            All the compressor stations, processing plants, desulphurization
stations, metering stations, odorizing stations, regulators and sites of the
Company, constructed or otherwise acquired by it and not heretofore described in
the Indenture or any supplement thereto and not heretofore released from the
lien of the Indenture, for compressing, processing, desulphurizing, metering,
odorizing and regulating manufactured or natural gas at any of its plants and
elsewhere, together with all buildings, meters and other appliances and
equipment, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with any of such
purposes, with sites to be used for such purposes.

                                      VI.

                               GAS STORAGE FIELDS

            The natural gas rights and interests of the Company, including wells
and well lines (but not including natural gas, oil and minerals), the gas
gathering system, the underground gas storage rights, the underground gas
storage wells and injection and withdrawal system used in connection therewith,
constructed or otherwise acquired by it and not heretofore described in the
Indenture or any supplement thereto and not heretofore released from the lien of
the Indenture: In the Overisel Gas Storage Field, located in the Township of
Overisel, Allegan County, and in the Township of Zeeland, Ottawa County,
Michigan; in the Northville Gas Storage Field located in the Township of Salem,
Washtenaw County, Township of Lyon, Oakland County, and the Townships of
Northville and Plymouth and City of Plymouth, Wayne County, Michigan; in the
Salem Gas Storage Field, located in the Township of Salem, Allegan County, and
in the Township of Jamestown, Ottawa County, Michigan; in the Ray Gas Storage
Field, located in the Townships of Ray and Armada, Macomb County, Michigan; in
the Lenox Gas Storage Field, located in the Townships of Lenox and Chesterfield,
Macomb County, Michigan; in the Ira Gas Storage Field, located in the Township
of Ira, St. Clair County, Michigan; in the Puttygut Gas Storage Field, located
in the Township of Casco, St. Clair County, Michigan; in the Four Corners Gas
Storage Field, located in the Townships of Casco, China, Cottrellville and Ira,
St. Clair County, Michigan; in the Swan Creek Gas Storage Field, located in the
Township of Casco and Ira, St. Clair County, Michigan; and in the Hessen Gas
Storage Field, located in the Townships of Casco and Columbus, St. Clair,
Michigan.

                                      VII.

                             GAS TRANSMISSION LINES

            All the gas transmission lines of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including gas mains, pipes, pipelines, gates, valves, meters and other
appliances and equipment, and all other property, real or personal, forming a

                                       49
<PAGE>

part of or appertaining to or used, occupied or enjoyed in connection with such
transmission lines or any of them or adjacent thereto; together with all real
property, right of way, easements, permits, privileges, franchises and rights
for or relating to the construction, maintenance or operation thereof, through,
over, under or upon any private property or any public streets or highways,
within as well as without the corporate limits of any municipal corporation.

                                     VIII.

                            GAS DISTRIBUTION SYSTEMS

            All the gas distribution systems of the Company, constructed or
otherwise acquired by it and not heretofore described in the Indenture or any
supplement thereto and not heretofore released from the lien of the Indenture,
including tunnels, conduits, gas mains and pipes, service pipes, fittings,
gates, valves, connections, meters and other appliances and equipment, and all
other property, real or personal, forming a part of or appertaining to or used,
occupied or enjoyed in connection with such distribution systems or any of them
or adjacent thereto; together with all real property, rights of way, easements,
permits, privileges, franchises, grants and rights, for or relating to the
construction, maintenance or operation thereof, through, over, under or upon any
private property or any public streets or highways within as well as without the
corporate limits of any municipal corporation.

                                      IX.

               OFFICE BUILDINGS, SERVICE BUILDINGS, GARAGES, ETC.

            All office, garage, service and other buildings of the Company,
wherever located, in the State of Michigan, constructed or otherwise acquired by
it and not heretofore described in the Indenture or any supplement thereto and
not heretofore released from the lien of the Indenture, together with the land
on which the same are situated and all easements, rights of way and
appurtenances to said lands, together with all furniture and fixtures located in
said buildings.

                                       X.

                            TELEPHONE PROPERTIES AND
                          RADIO COMMUNICATION EQUIPMENT

            All telephone lines, switchboards, systems and equipment of the
Company, constructed or otherwise acquired by it and not heretofore described in
the Indenture or any supplement thereto and not heretofore released from the
lien of the Indenture, used or available for use in the operation of its
properties, and all other property, real or personal, forming a part of or
appertaining to or used, occupied or enjoyed in connection with such telephone
properties or any of them or adjacent thereto; together with all real estate,
rights of way, easements, permits, privileges, franchises, property, devices or
rights related to the dispatch, transmission, reception or reproduction of
messages, communications, intelligence, signals, light, vision or sound by
electricity, wire or otherwise, including all telephone equipment installed in
buildings used as general and regional offices, substations and generating
stations and all telephone lines erected on towers and poles; and all radio
communication equipment of the Company, together with all

                                       50
<PAGE>

property, real or personal (except any in the Indenture expressly excepted),
fixed stations, towers, auxiliary radio buildings and equipment, and all
appurtenances used in connection therewith, wherever located, in the State of
Michigan.

                                       XI.

                               OTHER REAL PROPERTY

            All other real property of the Company and all interests therein, of
every nature and description (except any in the Indenture expressly excepted)
wherever located, in the State of Michigan, acquired by it and not heretofore
described in the Indenture or any supplement thereto and not heretofore released
from the lien of the Indenture. Such real property includes but is not limited
to the following described property, such property is subject to any interests
that were excepted or reserved in the conveyance to the Company:

                                  ALCONA COUNTY

      Certain land in Caledonia Township, Alcona County, Michigan described as:

            The East 330 feet of the South 660 feet of the SW 1/4 of the SW 1/4
      of Section 8, T28N, R8E, except the West 264 feet of the South 330 feet
      thereof; said land being more particularly described as follows: To find
      the place of beginning of this description, commence at the Southwest
      corner of said section, run thence East along the South line of said
      section 1243 feet to the place of beginning of this description, thence
      continuing East along said South line of said section 66 feet to the West
      1/8 line of said section, thence N 02 degrees 09' 30" E along the said
      West 1/8 line of said section 660 feet, thence West 330 feet, thence S 02
      degrees 09' 30" W, 330 feet, thence East 264 feet, thence S 02 degrees 09'
      30" W, 330 feet to the place of beginning.

                                 ALLEGAN COUNTY

      Certain land in Lee Township, Allegan County, Michigan described as:

            The NE 1/4 of the NW 1/4 of Section 16, T1N, R15W.

                                  ALPENA COUNTY

      Certain land in Wilson and Green Townships, Alpena County, Michigan
      described as:

            All that part of the S'ly 1/2 of the former Boyne City-Gaylord and
      Alpena Railroad right of way, being the Southerly 50 feet of a 100 foot
      strip of land formerly occupied by said Railroad, running from the East
      line of Section 31, T31N, R7E, Southwesterly across said Section 31 and
      Sections 5 and 6 of T30N, R7E and Sections 10, 11 and the E 1/2 of Section
      9, except the West 1646 feet thereof, all in T30N, R6E.

                                       51
<PAGE>

                                  ANTRIM COUNTY

      Certain land in Mancelona Township, Antrim County, Michigan described as:

            The S 1/2 of the NE 1/4 of Section 33, T29N, R6W, excepting
      therefrom all mineral, coal, oil and gas and such other rights as were
      reserved unto the State of Michigan in that certain deed running from the
      State of Michigan to August W. Schack and Emma H. Schack, his wife, dated
      April 15, 1946 and recorded May 20, 1946 in Liber 97 of Deeds on page 682
      of Antrim County Records.

                                  ARENAC COUNTY

      Certain land in Standish Township, Arenac County, Michigan described as:

            A parcel of land in the SW 1/4 of the NW 1/4 of Section 12, T18N,
      R4E, described as follows: To find the place of beginning of said parcel
      of land, commence at the Northwest corner of Section 12, T18N, R4E; run
      thence South along the West line of said section, said West line of said
      section being also the center line of East City Limits Road 2642.15 feet
      to the W 1/4 post of said section and the place of beginning of said
      parcel of land; running thence N 88 degrees 26' 00" E along the East and
      West 1/4 line of said section, 660.0 feet; thence North parallel with the
      West line of said section, 310.0 feet; thence S 88 degrees 26' 00" W,
      330.0 feet; thence South parallel with the West line of said section,
      260.0 feet; thence S 88 degrees 26' 00" W, 330.0 feet to the West line of
      said section and the center line of East City Limits Road; thence South
      along the said West line of said section, 50.0 feet to the place of
      beginning.

                                  BARRY COUNTY

      Certain land in Johnstown Township, Barry County, Michigan described as:

            A strip of land 311 feet in width across the SW 1/4 of the NE 1/4 of
      Section 31, T1N, R8W, described as follows: To find the place of beginning
      of this description, commence at the E -1/4 post of said section; run
      thence N 00 degrees 55' 00" E along the East line of said section, 555.84
      feet; thence N 59 degrees 36' 20" W, 1375.64 feet; thence N 88 degrees 30'
      00" W, 130 feet to a point on the East 1/8 line of said section and the
      place of beginning of this description; thence continuing N 88 degrees 30'
      00" W, 1327.46 feet to the North and South 1/4 line of said section;
      thence S 00 degrees 39'35" W along said North and South 1/4 line of said
      section, 311.03 feet to a point, which said point is 952.72 feet distant
      N'ly from the East and West 1/4 line of said section as measured along
      said North and South 1/4 line of said section; thence S 88 degrees 30' 00"
      E, 1326.76 feet to the East 1/8 line of said section; thence N 00 degrees
      47' 20" E along said East 1/8 line of said section, 311.02 feet to the
      place of beginning.

                                       52
<PAGE>

                                   BAY COUNTY

      Certain land in Frankenlust Township, Bay County, Michigan described as:

            The South 250 feet of the N 1/2 of the W 1/2 of the W 1/2 of the SE
      1/4 of Section 9, T13N, R4E.

                                  BENZIE COUNTY

      Certain land in Benzonia Township, Benzie County, Michigan described as:

            A parcel of land in the Northeast 1/4 of Section 7, Township 26
      North, Range 14 West, described as beginning at a point on the East line
      of said Section 7, said point being 320 feet North measured along the East
      line of said section from the East 1/4 post; running thence West 165 feet;
      thence North parallel with the East line of said section 165 feet; thence
      East 165 feet to the East line of said section; thence South 165 feet to
      the place of beginning.

                                  BRANCH COUNTY

      Certain land in Girard Township, Branch County, Michigan described as:

            A parcel of land in the NE 1/4 of Section 23 T5S, R6W, described as
      beginning at a point on the North and South quarter line of said section
      at a point 1278.27 feet distant South of the North quarter post of said
      section, said distance being measured along the North and South quarter
      line of said section, running thence S89 degrees 21'E 250 feet, thence
      North along a line parallel with the said North and South quarter line of
      said section 200 feet, thence N89 degrees 21'W 250 feet to the North and
      South quarter line of said section, thence South along said North and
      South quarter line of said section 200 feet to the place of beginning.

                                 CALHOUN COUNTY

      Certain land in Convis Township, Calhoun County, Michigan described as:

            A parcel of land in the SE 1/4 of the SE 1/4 of Section 32, T1S,
      R6W, described as follows: To find the place of beginning of this
      description, commence at the Southeast corner of said section; run thence
      North along the East line of said section 1034.32 feet to the place of
      beginning of this description; running thence N 89 degrees 39' 52" W,
      333.0 feet; thence North 290.0 feet to the South 1/8 line of said section;
      thence S 89 degrees 39' 52" E along said South 1/8 line of said section
      333.0 feet to the East line of said section; thence South along said East
      line of said section 290.0 feet to the place of beginning. (Bearings are
      based on the East line of Section 32, T1S, R6W, from the Southeast corner
      of said section to the Northeast corner of said section assumed as North.)

                                       53
<PAGE>

                                   CASS COUNTY

      Certain easement rights located across land in Marcellus Township, Cass
      County, Michigan described as:

            The East 6 rods of the SW 1/4 of the SE 1/4 of Section 4, T5S, R13W.

                                CHARLEVOIX COUNTY

      Certain land in South Arm Township, Charlevoix County, Michigan described
      as:

            A parcel of land in the SW 1/4 of Section 29, T32N, R7W, described
      as follows: Beginning at the Southwest corner of said section and running
      thence North along the West line of said section 788.25 feet to a point
      which is 528 feet distant South of the South 1/8 line of said section as
      measured along the said West line of said section; thence N 89 degrees 30'
      19" E, parallel with said South 1/8 line of said section 442.1 feet;
      thence South 788.15 feet to the South line of said section; thence S 89
      degrees 29' 30" W, along said South line of said section 442.1 feet to the
      place of beginning.

                                CHEBOYGAN COUNTY

      Certain land in Inverness Township, Cheboygan County, Michigan described
      as:

            A parcel of land in the SW frl 1/4 of Section 31, T37N, R2W,
      described as beginning at the Northwest corner of the SW frl 1/4, running
      thence East on the East and West quarter line of said Section, 40 rods,
      thence South parallel to the West line of said Section 40 rods, thence
      West 40 rods to the West line of said Section, thence North 40 rods to the
      place of beginning.

                                  CLARE COUNTY

      Certain land in Frost Township, Clare County, Michigan described as:

            The East 150 feet of the North 225 feet of the NW 1/4 of the NW 1/4
      of Section 15, T20N, R4W.

                                 CLINTON COUNTY

      Certain land in Watertown Township, Clinton County, Michigan described as:

            The NE 1/4 of the NE 1/4 of the SE 1/4 of Section 22, and the North
      165 feet of the NW 1/4 of the NE 1/4 of the SE 1/4 of Section 22, T5N,
      R3W.

                                       54
<PAGE>

                                 CRAWFORD COUNTY

      Certain land in Lovells Township, Crawford County, Michigan described as:

            A parcel of land in Section 1, T28N, R1W, described as: Commencing
      at NW corner said section; thence South 89 degrees 53'30" East along North
      section line 105.78 feet to point of beginning; thence South 89 degrees
      53'30" East along North section line 649.64 feet; thence South 55 degrees
      42'30" East 340.24 feet; thence South 55 degrees 44' 37"" East 5,061.81
      feet to the East section line; thence South 00 degrees 00' 08"" West along
      East section line 441.59 feet; thence North 55 degrees 44' 37" West
      5,310.48 feet; thence North 55 degrees 42'30" West 877.76 feet to point of
      beginning.

                                  EATON COUNTY

      Certain land in Eaton Township, Eaton County, Michigan described as:

            A parcel of land in the SW 1/4 of Section 6, T2N, R4W, described as
      follows: To find the place of beginning of this description commence at
      the Southwest corner of said section; run thence N 89 degrees 51' 30" E
      along the South line of said section 400 feet to the place of beginning of
      this description; thence continuing N 89 degrees 51' 30" E, 500 feet;
      thence N 00 degrees 50' 00" W, 600 feet; thence S 89 degrees 51' 30" W
      parallel with the South line of said section 500 feet; thence S 00 degrees
      50' 00" E, 600 feet to the place of beginning.

                                  EMMET COUNTY

      Certain land in Wawatam Township, Emmet County, Michigan described as:

            The West 1/2 of the Northeast 1/4 of the Northeast 1/4 of Section
      23, T39N, R4W.

                                 GENESEE COUNTY

      Certain land in Argentine Township, Genesee County, Michigan described as:

            A parcel of land of part of the SW 1/4 of Section 8, T5N, R5E, being
      more particularly described as follows:

            Beginning at a point of the West line of Duffield Road, 100 feet
      wide, (as now established) distant 829.46 feet measured N01 degrees
      42'56"W and 50 feet measured S88 degrees 14'04"W' from the South quarter
      corner, Section 8, T5N, R5E; thence S88 degrees 14'04"W a distance of 550
      feet; thence N01 degrees 42'56"W a distance of 500 feet to a point on the
      North line of the South half of the Southwest quarter of said Section 8;
      thence N88 degrees 14'04"E along the North line of South half of the
      Southwest quarter of said Section 8 a distance 550 feet to a point on the
      West line of Duffield Road, 100 feet wide (as now established);

                                       55
<PAGE>

      thence S01 degrees 42'56"E along the West line of said Duffield Road a
      distance of 500 feet to the point of beginning.

                                 GLADWIN COUNTY

      Certain land in Secord Township, Gladwin County, Michigan described as:

            The East 400 feet of the South 450 feet of Section 2, T19N, R1E.

                              GRAND TRAVERSE COUNTY

      Certain land in Mayfield Township, Grand Traverse County, Michigan
      described as:

            A parcel of land in the Northwest 1/4 of Section 3, T25N, R11W,
      described as follows: Commencing at the Northwest corner of said section,
      running thence S 89 degrees 19'15" E along the North line of said section
      and the center line of Clouss Road 225 feet, thence South 400 feet, thence
      N 89 degrees 19'15" W 225 feet to the West line of said section and the
      center line of Hannah Road, thence North along the West line of said
      section and the center line of Hannah Road 400 feet to the place of
      beginning for this description.

                                 GRATIOT COUNTY

      Certain land in Fulton Township, Gratiot County, Michigan described as:

            A parcel of land in the NE 1/4 of Section 7, Township 9 North, Range
      3 West, described as beginning at a point on the North line of George
      Street in the Village of Middleton, which is 542 feet East of the North
      and South one-quarter (1/4) line of said Section 7; thence North 100 feet;
      thence East 100 feet; thence South 100 feet to the North line of George
      Street; thence West along the North line of George Street 100 feet to
      place of beginning.

                                HILLSDALE COUNTY

      Certain land in Litchfield Village, Hillsdale County, Michigan described
      as:

            Lot 238 of Assessors Plat of the Village of Litchfield.

                                  HURON COUNTY

      Certain easement rights located across land in Sebewaing Township, Huron
      County, Michigan described as:

            The North 1/2 of the Northwest 1/4 of Section 15, T15N, R9E.

                                       56
<PAGE>

                                  INGHAM COUNTY

      Certain land in Vevay Township, Ingham County, Michigan described as:

            A parcel of land 660 feet wide in the Southwest 1/4 of Section 7
      lying South of the centerline of Sitts Road as extended to the North-South
      1/4 line of said Section 7, T2N, R1W, more particularly described as
      follows: Commence at the Southwest corner of said Section 7, thence North
      along the West line of said Section 2502.71 feet to the centerline of
      Sitts Road; thence South 89 degrees 54'45" East along said centerline
      2282.38 feet to the place of beginning of this description; thence
      continuing South 89 degrees 54'45" East along said centerline and said
      centerline extended 660.00 feet to the North-South 1/4 line of said
      section; thence South 00 degrees 07'20" West 1461.71 feet; thence North 89
      degrees 34'58" West 660.00 feet; thence North 00 degrees 07'20" East
      1457.91 feet to the centerline of Sitts Road and the place of beginning.

                                  IONIA COUNTY

      Certain land in Sebewa Township, Ionia County, Michigan described as:

            A strip of land 280 feet wide across that part of the SW 1/4 of the
      NE 1/4 of Section 15, T5N, R6W, described as follows:

            To find the place of beginning of this description commence at the E
      1/4 corner of said section; run thence N 00 degrees 05' 38" W along the
      East line of said section, 1218.43 feet; thence S 67 degrees 18' 24" W,
      1424.45 feet to the East 1/8 line of said section and the place of
      beginning of this description; thence continuing S 67 degrees 18' 24" W,
      1426.28 feet to the North and South 1/4 line of said section at a point
      which said point is 105.82 feet distant N'ly of the center of said section
      as measured along said North and South 1/4 line of said section; thence N
      00 degrees 04' 47" E along said North and South 1/4 line of said section,
      303.67 feet; thence N 67 degrees 18' 24" E, 1425.78 feet to the East 1/8
      line of said section; thence S 00 degrees 00' 26" E along said East 1/8
      line of said section, 303.48 feet to the place of beginning. (Bearings are
      based on the East line of Section 15, T5N, R6W, from the E 1/4 corner of
      said section to the Northeast corner of said section assumed as N 00
      degrees 05' 38" W.)

                                  IOSCO COUNTY

      Certain land in Alabaster Township, Iosco County, Michigan described as:

            A parcel of land in the NW 1/4 of Section 34, T21N, R7E, described
      as follows: To find the place of beginning of this description commence at
      the N 1/4 post of said section; run thence South along the North and South
      1/4 line of said section, 1354.40 feet to the place of beginning of this
      description; thence continuing South along the said North and South 1/4
      line of said section, 165.00 feet to a point on the said North and South
      1/4 line of said section which said point is 1089.00 feet distant North of
      the center of said section; thence West

                                       57
<PAGE>

      440.00 feet; thence North 165.00 feet; thence East 440.00 feet to the said
      North and South 1/4 line of said section and the place of beginning.

                                 ISABELLA COUNTY

      Certain land in Chippewa Township, Isabella County, Michigan described as:

            The North 8 rods of the NE 1/4 of the SE 1/4 of Section 29, T14N,
      R3W.

                                 JACKSON COUNTY

      Certain land in Waterloo Township, Jackson County, Michigan described as:

            A parcel of land in the North fractional part of the N fractional
      1/2 of Section 2, T1S, R2E, described as follows: To find the place of
      beginning of this description commence at the E 1/4 post of said section;
      run thence N 01 degrees 03' 40" E along the East line of said section
      1335.45 feet to the North 1/8 line of said section and the place of
      beginning of this description; thence N 89 degrees 32' 00" W, 2677.7 feet
      to the North and South 1/4 line of said section; thence S 00 degrees 59'
      25" W along the North and South 1/4 line of said section 22.38 feet to the
      North 1/8 line of said section; thence S 89 degrees 59' 10" W along the
      North 1/8 line of said section 2339.4 feet to the center line of State
      Trunkline Highway M-52; thence N 53 degrees 46' 00" W along the center
      line of said State Trunkline Highway 414.22 feet to the West line of said
      section; thence N 00 degrees 55' 10" E along the West line of said section
      74.35 feet; thence S 89 degrees 32' 00" E, 5356.02 feet to the East line
      of said section; thence S 01 degrees 03' 40" W along the East line of said
      section 250 feet to the place of beginning.

                                KALAMAZOO COUNTY

      Certain land in Alamo Township, Kalamazoo County, Michigan described as:

            The South 350 feet of the NW 1/4 of the NW 1/4 of Section 16, T1S,
      R12W, being more particularly described as follows: To find the place of
      beginning of this description, commence at the Northwest corner of said
      section; run thence S 00 degrees 36' 55" W along the West line of said
      section 971.02 feet to the place of beginning of this description; thence
      continuing S 00 degrees 36' 55" W along said West line of said section
      350.18 feet to the North 1/8 line of said section; thence S 87 degrees 33'
      40" E along the said North 1/8 line of said section 1325.1 feet to the
      West 1/8 line of said section; thence N 00 degrees 38' 25" E along the
      said West 1/8 line of said section 350.17 feet; thence N 87 degrees 33'
      40" W, 1325.25 feet to the place of beginning.

                                       58
<PAGE>

                                 KALKASKA COUNTY

      Certain land in Kalkaska Township, Kalkaska County, Michigan described as:

            The NW 1/4 of the SW 1/4 of Section 4, T27N, R7W, excepting
      therefrom all mineral, coal, oil and gas and such other rights as were
      reserved unto the State of Michigan in that certain deed running from the
      Department of Conservation for the State of Michigan to George Welker and
      Mary Welker, his wife, dated October 9, 1934 and recorded December 28,
      1934 in Liber 39 on page 291 of Kalkaska County Records, and subject to
      easement for pipeline purposes as granted to Michigan Consolidated Gas
      Company by first party herein on April 4, 1963 and recorded June 21, 1963
      in Liber 91 on page 631 of Kalkaska County Records.

                                   KENT COUNTY

      Certain land in Caledonia Township, Kent County, Michigan described as:

            A parcel of land in the Northwest fractional 1/4 of Section 15, T5N,
      R10W, described as follows: To find the place of beginning of this
      description commence at the North 1/4 corner of said section, run thence S
      0 degrees 59' 26" E along the North and South 1/4 line of said section
      2046.25 feet to the place of beginning of this description, thence
      continuing S 0 degrees 59' 26" E along said North and South 1/4 line of
      said section 332.88 feet, thence S 88 degrees 58' 30" W 2510.90 feet to a
      point herein designated "Point A" on the East bank of the Thornapple
      River, thence continuing S 88 degrees 53' 30" W to the center thread of
      the Thornapple River, thence NW'ly along the center thread of said
      Thornapple River to a point which said point is S 88 degrees 58' 30" W of
      a point on the East bank of the Thornapple River herein designated "Point
      B", said "Point B" being N 23 degrees 41' 35" W 360.75 feet from said
      above-described "Point A", thence N 88 degrees 58' 30" E to said "Point
      B", thence continuing N 88 degrees 58' 30" E 2650.13 feet to the place of
      beginning. (Bearings are based on the East line of Section 15, T5N, R10W
      between the East 1/4 corner of said section and the Northeast corner of
      said section assumed as N 0 degrees 59' 55" W.)

                                   LAKE COUNTY

      Certain land in Pinora and Cherry Valley Townships, Lake County, Michigan
      described as:

            A strip of land 50 feet wide East and West along and adjoining the
      West line of highway on the East side of the North 1/2 of Section 13 T18N,
      R12W. Also a strip of land 100 feet wide East and West along and adjoining
      the East line of the highway on the West side of following described land:
      The South 1/2 of NW 1/4, and the South 1/2 of the NW 1/4 of the SW 1/4,
      all in Section 6, T18N, R11W.

                                       59
<PAGE>

                                  LAPEER COUNTY

      Certain land in Hadley Township, Lapeer County, Michigan described as:

            The South 825 feet of the W 1/2 of the SW 1/4 of Section 24, T6N,
      R9E, except the West 1064 feet thereof.

                                 LEELANAU COUNTY

      Certain land in Cleveland Township, Leelanau County, Michigan described
      as:

            The North 200 feet of the West 180 feet of the SW 1/4 of the SE 1/4
      of Section 35, T29N, R13W.

                                 LENAWEE COUNTY

      Certain land in Madison Township, Lenawee County, Michigan described as:

            A strip of land 165 feet wide off the West side of the following
      described premises: The E 1/2 of the SE 1/4 of Section 12. The E 1/2 of
      the NE 1/4 and the NE 1/4 of the SE 1/4 of Section 13, being all in T7S,
      R3E, excepting therefrom a parcel of land in the E 1/2 of the SE 1/4 of
      Section 12, T7S, R3E, beginning at the Northwest corner of said E 1/2 of
      the SE 1/4 of Section 12, running thence East 4 rods, thence South 6 rods,
      thence West 4 rods, thence North 6 rods to the place of beginning.

                                LIVINGSTON COUNTY

      Certain land in Cohoctah Township, Livingston County, Michigan described
      as:

            Parcel 1

      The East 390 feet of the East 50 rods of the SW 1/4 of Section 30, T4N,
      R4E.

            Parcel 2

            A parcel of land in the NW 1/4 of Section 31, T4N, R4E, described as
      follows: To find the place of beginning of this description commence at
      the N 1/4 post of said section; run thence N 89 degrees 13' 06" W along
      the North line of said section, 330 feet to the place of beginning of this
      description; running thence S 00 degrees 52' 49" W, 2167.87 feet; thence N
      88 degrees 59' 49" W, 60 feet; thence N 00 degrees 52' 49" E, 2167.66 feet
      to the North line of said section; thence S 89 degrees 13' 06" E along
      said North line of said section, 60 feet to the place of beginning.

                                       60
<PAGE>

                                  MACOMB COUNTY

      Certain land in Macomb Township, Macomb County, Michigan described as:

            A parcel of land commencing on the West line of the E 1/2 of the NW
      1/4 of fractional Section 6, 20 chains South of the NW corner of said E
      1/2 of the NW 1/4 of Section 6; thence South on said West line and the
      East line of A. Henry Kotner's Hayes Road Subdivision #15, according to
      the recorded plat thereof, as recorded in Liber 24 of Plats, on page 7,
      24.36 chains to the East and West 1/4 line of said Section 6; thence East
      on said East and West 1/4 line 8.93 chains; thence North parallel with the
      said West line of the E 1/2 of the NW 1/4 of Section 6, 24.36 chains;
      thence West 8.93 chains to the place of beginning, all in T3N, R13E.

                                 MANISTEE COUNTY

      Certain land in Manistee Township, Manistee County, Michigan described as:

            A parcel of land in the SW 1/4 of Section 20, T22N, R16W, described
      as follows: To find the place of beginning of this description, commence
      at the Southwest corner of said section; run thence East along the South
      line of said section 832.2 feet to the place of beginning of this
      description; thence continuing East along said South line of said section
      132 feet; thence North 198 feet; thence West 132 feet; thence South 198
      feet to the place of beginning, excepting therefrom the South 2 rods
      thereof which was conveyed to Manistee Township for highway purposes by a
      Quitclaim Deed dated June 13, 1919 and recorded July 11, 1919 in Liber 88
      of Deeds on page 638 of Manistee County Records.

                                  MASON COUNTY

      Certain land in Riverton Township, Mason County, Michigan described as:

            Parcel 1

            The South 10 acres of the West 20 acres of the S 1/2 of the NE 1/4
      of Section 22, T17N, R17W.

            Parcel 2

            A parcel of land containing 4 acres of the West side of highway,
      said parcel of land being described as commencing 16 rods South of the
      Northwest corner of the NW 1/4 of the SW -1/4 of Section 22, T17N, R17W,
      running thence South 64 rods, thence NE'ly and N'ly and NW'ly along the
      W'ly line of said highway to the place of beginning, together with any and
      all right, title, and interest of Howard C. Wicklund and Katherine E.
      Wicklund in and to that portion of the hereinbefore mentioned highway
      lying adjacent to the E'ly line of said above described land.

                                       61
<PAGE>

                                 MECOSTA COUNTY

      Certain land in Wheatland Township, Mecosta County, Michigan described as:

            A parcel of land in the SW 1/4 of the SW 1/4 of Section 16, T14N,
      R7W, described as beginning at the Southwest corner of said section;
      thence East along the South line of Section 133 feet; thence North
      parallel to the West section line 133 feet; thence West 133 feet to the
      West line of said Section; thence South 133 feet to the place of
      beginning.

                                 MIDLAND COUNTY

      Certain land in Ingersoll Township, Midland County, Michigan described as:

            The West 200 feet of the W 1/2 of the NE 1/4 of Section 4, T13N,
      R2E.

                                MISSAUKEE COUNTY

      Certain land in Norwich Township, Missaukee County, Michigan described as:

            A parcel of land in the NW 1/4 of the NW 1/4 of Section 16, T24N,
      R6W, described as follows: Commencing at the Northwest corner of said
      section, running thence N 89 degrees 01' 45" E along the North line of
      said section 233.00 feet; thence South 233.00 feet; thence S 89 degrees
      01' 45" W, 233.00 feet to the West line of said section; thence North
      along said West line of said section 233.00 feet to the place of
      beginning. (Bearings are based on the West line of Section 16, T24N, R6W,
      between the Southwest and Northwest corners of said section assumed as
      North.)

                                  MONROE COUNTY

      Certain land in Whiteford Township, Monroe County, Michigan described as:

            A parcel of land in the SW1/4 of Section 20, T8S, R6E, described as
      follows: To find the place of beginning of this description commence at
      the S 1/4 post of said section; run thence West along the South line of
      said section 1269.89 feet to the place of beginning of this description;
      thence continuing West along said South line of said section 100 feet;
      thence N 00 degrees 50' 35" E, 250 feet; thence East 100 feet; thence S 00
      degrees 50' 35" W parallel with and 16.5 feet distant W'ly of as measured
      perpendicular to the West 1/8 line of said section, as occupied, a
      distance of 250 feet to the place of beginning.

                                 MONTCALM COUNTY

      Certain land in Crystal Township, Montcalm County, Michigan described as:

            The N 1/2 of the S 1/2 of the SE 1/4 of Section 35, T10N, R5W.

                                       62
<PAGE>

                               MONTMORENCY COUNTY

      Certain land in the Village of Hillman, Montmorency County, Michigan
      described as:

            Lot 14 of Hillman Industrial Park, being a subdivision in the South
      1/2 of the Northwest 1/4 of Section 24, T31N, R4E, according to the plat
      thereof recorded in Liber 4 of Plats on Pages 32-34, Montmorency County
      Records.

                                 MUSKEGON COUNTY

      Certain land in Casnovia Township, Muskegon County, Michigan described as:

            The West 433 feet of the North 180 feet of the South 425 feet of the
      SW 1/4 of Section 3, T10N, R13W.

                                 NEWAYGO COUNTY

      Certain land in Ashland Township, Newaygo County, Michigan described as:

            The West 250 feet of the NE 1/4 of Section 23, T11N, R13W.

                                 OAKLAND COUNTY

      Certain land in Wixcom City, Oakland County, Michigan described as:

            The E 75 feet of the N 160 feet of the N 330 feet of the W 526.84
      feet of the NW 1/4 of the NW 1/4 of Section 8, T1N, R8E, more particularly
      described as follows: Commence at the NW corner of said Section 8, thence
      N 87 degrees 14' 29" E along the North line of said Section 8 a distance
      of 451.84 feet to the place of beginning for this description; thence
      continuing N 87 degrees 14' 29" E along said North section line a distance
      of 75.0 feet to the East line of the West 526.84 feet of the NW 1/4 of the
      NW 1/4 of said Section 8; thence S 02 degrees 37' 09" E along said East
      line a distance of 160.0 feet; thence S 87 degrees 14' 29" W a distance of
      75.0 feet; thence N 02 degrees 37' 09" W a distance of 160.0 feet to the
      place of beginning.

                                  OCEANA COUNTY

      Certain land in Crystal Township, Oceana County, Michigan described as:

            The East 290 feet of the SE 1/4 of the NW 1/4 and the East 290 feet
      of the NE 1/4 of the SW 1/4, all in Section 20, T16N, R16W.

                                       63
<PAGE>

                                  OGEMAW COUNTY

      Certain land in West Branch Township, Ogemaw County, Michigan described
      as:

            The South 660 feet of the East 660 feet of the NE 1/4 of the NE 1/4
      of Section 33, T22N, R2E.

                                 OSCEOLA COUNTY

      Certain land in Hersey Township, Osceola County, Michigan described as:

            A parcel of land in the North 1/2 of the Northeast 1/4 of Section
      13, T17N, R9W, described as commencing at the Northeast corner of said
      Section; thence West along the North Section line 999 feet to the point of
      beginning of this description; thence S 01 degrees 54' 20" E 1327.12 feet
      to the North 1/8 line; thence S 89 degrees 17' 05" W along the North 1/8
      line 330.89 feet; thence N 01 degrees 54' 20" W 1331.26 feet to the North
      Section line; thence East along the North Section line 331 feet to the
      point of beginning.

                                  OSCODA COUNTY

      Certain land in Comins Township, Oscoda County, Michigan described as:

            The East 400 feet of the South 580 feet of the W 1/2 of the SW 1/4
      of Section 15, T27N, R3E.

                                  OTSEGO COUNTY

      Certain land in Corwith Township, Otsego County, Michigan described as:

            Part of the NW 1/4 of the NE 1/4 of Section 28, T32N, R3W, described
      as: Beginning at the N 1/4 corner of said section; running thence S 89
      degrees 04' 06" E along the North line of said section, 330.00 feet;
      thence S 00 degrees 28' 43" E, 400.00 feet; thence N 89 degrees 04' 06" W,
      330.00 feet to the North and South 1/4 line of said section; thence N 00
      degrees 28' 43" W along the said North and South 1/4 line of said section,
      400.00 feet to the point of beginning; subject to the use of the N'ly
      33.00 feet thereof for highway purposes.

                                  OTTAWA COUNTY

      Certain land in Robinson Township, Ottawa County, Michigan described as:

            The North 660 feet of the West 660 feet of the NE 1/4 of the NW 1/4
      of Section 26, T7N, R15W.

                                       64
<PAGE>

                               PRESQUE ISLE COUNTY

      Certain land in Belknap and Pulawski Townships, Presque Isle County,
      Michigan described as:

            Part of the South half of the Northeast quarter, Section 24, T34N,
      R5E, and part of the Northwest quarter, Section 19, T34N, R6E, more fully
      described as: Commencing at the East -1/4 corner of said Section 24;
      thence N 00 degrees 15'47" E, 507.42 feet, along the East line of said
      Section 24 to the point of beginning; thence S 88 degrees 15'36" W, 400.00
      feet, parallel with the North 1/8 line of said Section 24; thence N 00
      degrees 15'47" E, 800.00 feet, parallel with said East line of Section 24;
      thence N 88 degrees 15'36"E, 800.00 feet, along said North 1/8 line of
      Section 24 and said line extended; thence S 00 degrees 15'47" W, 800.00
      feet, parallel with said East line of Section 24; thence S 88 degrees
      15'36" W, 400.00 feet, parallel with said North 1/8 line of Section 24 to
      the point of beginning.

            Together with a 33 foot easement along the West 33 feet of the
      Northwest quarter lying North of the North 1/8 line of Section 24, Belknap
      Township, extended, in Section 19, T34N, R6E.

                                ROSCOMMON COUNTY

      Certain land in Gerrish Township, Roscommon County, Michigan described as:

            A parcel of land in the NW 1/4 of Section 19, T24N, R3W, described
      as follows: To find the place of beginning of this description commence at
      the Northwest corner of said section, run thence East along the North line
      of said section 1,163.2 feet to the place of beginning of this description
      (said point also being the place of intersection of the West 1/8 line of
      said section with the North line of said section), thence S 01 degrees 01'
      E along said West 1/8 line 132 feet, thence West parallel with the North
      line of said section 132 feet, thence N 01 degrees 01' W parallel with
      said West 1/8 line of said section 132 feet to the North line of said
      section, thence East along the North line of said section 132 feet to the
      place of beginning.

                                 SAGINAW COUNTY

      Certain land in Chapin Township, Saginaw County, Michigan described as:

            A parcel of land in the SW 1/4 of Section 13, T9N, R1E, described as
      follows: To find the place of beginning of this description commence at
      the Southwest corner of said section; run thence North along the West line
      of said section 1581.4 feet to the place of beginning of this description;
      thence continuing North along said West line of said section 230 feet to
      the center line of a creek; thence S 70 degrees 07' 00" E along said
      center line of said creek 196.78 feet; thence South 163.13 feet; thence
      West 185 feet to the West line of said section and the place of beginning.

                                       65
<PAGE>

                                 SANILAC COUNTY

      Certain easement rights located across land in Minden Township, Sanilac
      County, Michigan described as:

            The Southeast 1/4 of the Southeast 1/4 of Section 1, T14N, R14E,
      excepting therefrom the South 83 feet of the East 83 feet thereof.

                                SHIAWASSEE COUNTY

      Certain land in Burns Township, Shiawassee County, Michigan described as:

            The South 330 feet of the E 1/2 of the NE 1/4 of Section 36, T5N,
      R4E.

                                ST. CLAIR COUNTY

      Certain land in Ira Township, St. Clair County, Michigan described as:

            The N 1/2 of the NW 1/4 of the NE 1/4 of Section 6, T3N, R15E.

                                ST. JOSEPH COUNTY

      Certain land in Mendon Township, St. Joseph County, Michigan described as:

            The North 660 feet of the West 660 feet of the NW 1/4 of SW 1/4,
      Section 35, T5S, R10W.

                                 TUSCOLA COUNTY

      Certain land in Millington Township, Tuscola County, Michigan described
      as:

            A strip of land 280 feet wide across the East 96 rods of the South
      20 rods of the N 1/2 of the SE 1/4 of Section 34, T10N, R8E, more
      particularly described as commencing at the Northeast corner of Section 3,
      T9N, R8E, thence S 89 degrees 55' 35" W along the South line of said
      Section 34 a distance of 329.65 feet, thence N 18 degrees 11' 50" W a
      distance of 1398.67 feet to the South 1/8 line of said Section 34 and the
      place of beginning for this description; thence continuing N 18 degrees
      11' 50" W a distance of 349.91 feet; thence N 89 degrees 57' 01" W a
      distance of 294.80 feet; thence S 18 degrees 11' 50" E a distance of
      350.04 feet to the South 1/8 line of said Section 34; thence S 89 degrees
      58' 29" E along the South 1/8 line of said section a distance of 294.76
      feet to the place of beginning.

                                VAN BUREN COUNTY

      Certain land in Covert Township, Van Buren County, Michigan described as:

            All that part of the West 20 acres of the N 1/2 of the NE fractional
      1/4 of Section 1, T2S, R17W, except the West 17 rods of the North 80 rods,
      being more

                                       66
<PAGE>

      particularly described as follows: To find the place of beginning of this
      description commence at the N 1/4 post of said section; run thence N 89
      degrees 29' 20" E along the North line of said section 280.5 feet to the
      place of beginning of this description; thence continuing N 89 degrees 29'
      20" E along said North line of said section 288.29 feet; thence S 00
      degrees 44' 00" E, 1531.92 feet; thence S 89 degrees 33' 30" W, 568.79
      feet to the North and South 1/4 line of said section; thence N 00 degrees
      44' 00" W along said North and South 1/4 line of said section 211.4 feet;
      thence N 89 degrees 29' 20" E, 280.5 feet; thence N 00 degrees 44' 00" W,
      1320 feet to the North line of said section and the place of beginning.

                                WASHTENAW COUNTY

      Certain land in Manchester Township, Washtenaw County, Michigan described
      as:

            A parcel of land in the NE 1/4 of the NW 1/4 of Section 1, T4S, R3E,
      described as follows: To find the place of beginning of this description
      commence at the Northwest corner of said section; run thence East along
      the North line of said section 1355.07 feet to the West 1/8 line of said
      section; thence S 00 degrees 22' 20" E along said West 1/8 line of said
      section 927.66 feet to the place of beginning of this description; thence
      continuing S 00 degrees 22' 20" E along said West 1/8 line of said section
      660 feet to the North 1/8 line of said section; thence N 86 degrees 36'
      57" E along said North 1/8 line of said section 660.91 feet; thence N 00
      degrees 22' 20" W, 660 feet; thence S 86 degrees 36' 57" W, 660.91 feet to
      the place of beginning.

                                  WAYNE COUNTY

      Certain land in Livonia City, Wayne County, Michigan described as:

            Commencing at the Southeast corner of Section 6, T1S, R9E; thence
      North along the East line of Section 6 a distance of 253 feet to the point
      of beginning; thence continuing North along the East line of Section 6 a
      distance of 50 feet; thence Westerly parallel to the South line of Section
      6, a distance of 215 feet; thence Southerly parallel to the East line of
      Section 6 a distance of 50 feet; thence easterly parallel with the South
      line of Section 6 a distance of 215 feet to the point of beginning.

                                 WEXFORD COUNTY

      Certain land in Selma Township, Wexford County, Michigan described as:

            A parcel of land in the NW 1/4 of Section 7, T22N, R10W, described
      as beginning on the North line of said section at a point 200 feet East of
      the West line of said section, running thence East along said North
      section line 450 feet, thence South parallel with said West section line
      350 feet, thence West parallel

                                       67
<PAGE>

      with said North section line 450 feet, thence North parallel with said
      West section line 350 feet to the place of beginning.

            SECTION 15. The Company is a transmitting utility under Section
9501(2) of the Michigan Uniform Commercial Code (M.C.L. 440.9501(2)) as defined
in M.C.L. 440.9102(1)(aaaa).

            IN WITNESS WHEREOF, said Consumers Energy Company has caused this
Supplemental Indenture to be executed in its corporate name by its Chairman of
the Board, President, a Vice President or its Treasurer and its corporate seal
to be hereunto affixed and to be attested by its Secretary or an Assistant
Secretary, and said JPMorgan Chase Bank, as Trustee as aforesaid, to evidence
its acceptance hereof, has caused this Supplemental Indenture to be executed in
its corporate name by a Vice President and its corporate seal to be hereunto
affixed and to be attested by a Trust Officer, in several counterparts, all as
of the day and year first above written.

                                       68
<PAGE>

                                          CONSUMERS ENERGY COMPANY

(SEAL)                               By:  /s/ Laura L. Mountcastle
                                          ------------------------
                                          Laura L. Mountcastle
Attest:                                   Vice President and Treasurer

/s/ Joyce H. Norkey
-------------------
Joyce H. Norkey
Assistant Secretary

Signed, sealed and delivered
by CONSUMERS ENERGY COMPANY
in the presence of

/s/ Kimberly C. Wilson
----------------------
Kimberly C. Wilson

/s/ Sammie B. Dalton
--------------------
Sammie B. Dalton

STATE OF MICHIGAN    )
                       ss.
COUNTY OF JACKSON    )

            The foregoing instrument was acknowledged before me this 17th day of
August, 2004, by Laura L. Mountcastle, Vice President and Treasurer of CONSUMERS
ENERGY COMPANY, a Michigan corporation, on behalf of the corporation.

                                          /s/ Margaret Hillman
                                          -------------------------------
                                          Margaret Hillman, Notary Public

[Seal]

                                          State of Michigan, County of Jackson
                                          My Commission Expires:  06/14/10
                                          Acting in Jackson County

                                       S-1

<PAGE>

                                      JPMORGAN CHASE BANK, AS TRUSTEE

(SEAL)                                By: /s/ L. O'Brien
                                          -------------------------------
                                          L. O'Brien
Attest:                                   Vice President

/s/ Rosa Ciaccia
----------------------------
Rosa Ciaccia
Trust Officer

Signed, sealed and delivered
by JPMORGAN CHASE BANK
in the presence of

/s/ Nicholas Sberlati
----------------------------
Nicholas Sberlati
Trust Officer

/s/ Virginia Dominguez
----------------------------
Virginia Dominguez
Trust Officer

STATE OF NEW YORK    )
                       ss.
COUNTY OF NEW YORK   )

            The foregoing instrument was acknowledged before me this 17th day of
August, 2004, by L. O'Brien, a Vice President of JPMORGAN CHASE BANK, a New York
corporation, on behalf of the corporation.

                                          /s/ Emily Fayan
                                          -------------------------------
                                          EMILY FAYAN
                                          Notary Public, State of New York
[Seal]                                    No.01FA4737006
                                          Qualified in Kings County
                                          Certificate Filed in New York County
                                          Commission Expires Dec. 31, 2005

Prepared by:                              When recorded, return to:
Kimberly C. Wilson                        Consumers Energy Company
One Energy Plaza, EP11-219                Business Services Real Estate Dept.
Jackson, MI 49201                         Attn: Nancy Fisher EP7-439
                                          One Energy Plaza
                                          Jackson, MI 49201

                                       S-2

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