Document:

EX-4.1

ONE HUNDRED TWELFTH SUPPLEMENTAL INDENTURE

Providing among other things for

FIRST MORTGAGE BONDS,

$250 million 5.30% First Mortgage Bonds Due 2022

$50 million 6.17% First Mortgage Bonds Due 2040

Dated as of September 1, 2010

CONSUMERS ENERGY COMPANY

TO

THE BANK OF NEW YORK MELLON,

TRUSTEE

Counterpart        of 100

1

THIS ONE HUNDRED TWELFTH SUPPLEMENTAL INDENTURE, dated as of September 1, 2010 (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 THE BANK OF NEW YORK MELLON, a New York banking
corporation, with its corporate trust offices at 101 Barclay St., New York, New York 10286
(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 effective November 13, 2004, the name of JPMorgan Chase Bank was changed to JPMorgan
Chase Bank, N.A.; and

WHEREAS effective October 2, 2006, The Bank of New York succeeded JPMorgan Chase Bank, N.A.,
as Trustee under the Indenture; and

WHEREAS effective July 1, 2008, the name of The Bank of New York was changed to The Bank of
New York Mellon; 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 $6,000,000,000 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 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 5.30% Series due 2022, each of which bonds shall also bear the descriptive title “First
Mortgage Bonds” (hereinafter provided for and hereinafter sometimes referred to as the “2022
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 September 1,
2022; 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 6.17% Series due 2040, each of which bonds shall also bear the descriptive title “First
Mortgage Bonds” (hereinafter provided for and hereinafter sometimes referred to as the “2040
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 September 1,
2040; and

WHEREAS the Company and the purchasers party thereto (the “Purchasers”) have entered into a
Bond Purchase Agreement dated as of April 19, 2010 (the “Bond Purchase Agreement”), pursuant to
which the Company agreed to sell and the Purchasers agreed to buy $250 million in aggregate
principal amount of 2022 Bonds and $50 million in aggregate principal amount of 2040 Bonds (such
2022 Bonds and 2040 Bonds, collectively the “Bonds”); and

WHEREAS each of the registered bonds without coupons of the 2022 Bonds and the Trustee’s
Authentication Certificate thereon, and each of the registered bonds without coupons of the 2040
Bonds and the Trustee’s Authentication Certificate thereon, are to be substantially in the
following forms, respectively, to wit:

[FORM OF REGISTERED BOND OF THE 2022 BONDS]

[FACE]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

CONSUMERS ENERGY COMPANY

FIRST MORTGAGE BOND

5.30% SERIES DUE 2022

PPN: $     

No.:       

CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called the “Company”), for value
received, hereby promises to pay to       , or registered assigns, the principal sum of
     Dollars ($     ) on September 1, 2022, 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 March 1, 2011, in which case from September 1, 2010
(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 March 1, 2011, from September 1, 2010), at the rate per annum,
until the principal hereof shall have become due and payable, specified in the title of this bond,
payable on March 1 and September 1 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.

THE BANK OF NEW YORK MELLON, Trustee

By:

Authorized Officer

[REVERSE]

CONSUMERS ENERGY COMPANY

FIRST MORTGAGE BOND

5.30% SERIES DUE 2022

The interest payable on any March 1 or September 1 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 15th calendar day of the
month immediately preceding the month in which such interest payment date occurs, or, if such March
1 or September 1 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 succeeding 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, 5.30% Series due
2022 (sometimes herein referred to as the “2022 Bonds” or the “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
(The Bank of New York Mellon, 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.

Any or all of the 2022 Bonds may be redeemed by the Company, at any time and from time to time
prior to maturity, at a redemption price equal to 100% of the principal amount of such 2022 Bonds
being redeemed plus the Applicable Premium (as defined below), if any, thereon at the time of
redemption, together with accrued interest, if any, thereon to the redemption date. In no event
will the redemption price be less than 100% of the principal amount of the 2022 Bonds plus accrued
interest, if any, thereon to the redemption date.

“Applicable Premium” means, with respect to a 2022 Bond (or portion thereof) being redeemed at
any time, the excess of (a) the present value at such time of the principal amount of such 2022
Bond (or portion thereof) being redeemed plus all scheduled interest payments on such 2022 Bond (or
portion thereof excluding interest accrued to the redemption date) after the redemption date, which
present value shall be computed using a discount rate equal to the Treasury Rate (as defined below)
plus 50 basis points, over (b) the principal amount of such 2022 Bond (or portion thereof) being
redeemed at such time. For purposes of this definition, the present values of interest and
principal payments will be determined in accordance with generally accepted principles of financial
analysis.

“Treasury Rate” means the yield to maturity at the time of computation of United States
Treasury securities adjusted to constant maturity under the caption “Treasury constant maturities,
Nominal” (as compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) (the “Statistical Release”)) which has become publicly available at least two Business
Days prior to the redemption date (or, if such Statistical Release is no longer published, any
publicly available source of similar market data) most nearly equal to the then remaining average
life to stated maturity of the 2022 Bonds; provided, however, that if the average life (rounded to
the first decimal point) to stated maturity of the 2022 Bonds is not equal to the constant maturity
of a United States Treasury security for which a weekly average yield (in the Statistical Release
columns labeled “Week Ending”) is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of
United States Treasury securities for which such yields are given.

The Treasury Rate will be calculated on the third Business Day preceding the date fixed for
redemption.

If the original redemption date is on or after a record date and on or before the relevant
interest payment date, the accrued and unpaid interest, if any, will be paid to the person or
entity in whose name the 2022 Bond is registered at the close of business on the record date, and
no additional interest will be payable to the holders whose 2022 Bonds shall be subject to
redemption.

If less than all of the 2022 Bonds are to be redeemed, the Trustee shall select, in such
manner as it shall deem appropriate and fair, the particular 2022 Bonds or portions thereof to be
redeemed. Notice of redemption shall be given by mail not less than 30 nor more than 60 days prior
to the date fixed for redemption to the holders of the 2022 Bonds to be redeemed; provided,
however, that the failure to duly give such notice by mail, or any defect therein, shall not affect
the validity of any proceedings for the redemption of the 2022 Bonds as to which there shall have
been no such failure or defect. On and after the date fixed for redemption (unless the Company
shall default in the payment of the 2022 Bonds or portions thereof to be redeemed at the applicable
redemption price, together with accrued interest, if any, thereon to such date), interest on the
2022 Bonds or the portions thereof so called for redemption shall cease to accrue.

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 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, (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
2022 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 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.

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 office
or agency of the Company in the Borough of Manhattan, The City of New York. 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.

[END OF FORM OF REGISTERED BOND OF THE 2022 BONDS]

- — - — - — - — - — - — - — -

[FORM OF REGISTERED BOND OF THE 2040 BONDS]

[FACE]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

CONSUMERS ENERGY COMPANY

FIRST MORTGAGE BOND

6.17% SERIES DUE 2040

PPN: $     

No.:       

CONSUMERS ENERGY COMPANY, a Michigan corporation (hereinafter called the “Company”), for value
received, hereby promises to pay to       , or registered assigns, the principal sum of
     Dollars ($     ) on September 1, 2040, 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 March 1, 2011, in which case from September 1, 2010
(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 March 1, 2011, from September 1, 2010), at the rate per annum,
until the principal hereof shall have become due and payable, specified in the title of this bond,
payable on March 1 and September 1 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.

THE BANK OF NEW YORK MELLON, Trustee

By:

Authorized Officer

[REVERSE]

CONSUMERS ENERGY COMPANY

FIRST MORTGAGE BOND

6.17% SERIES DUE 2040

The interest payable on any March 1 or September 1 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 15th calendar day of the
month immediately preceding the month in which such interest payment date occurs, or, if such March
1 or September 1 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 succeeding 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, 6.17% Series due
2040 (sometimes herein referred to as the “2040 Bonds” or the “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
(The Bank of New York Mellon, 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.

Any or all of the 2040 Bonds may be redeemed by the Company, at any time and from time to time
prior to maturity, at a redemption price equal to 100% of the principal amount of such 2040 Bonds
being redeemed plus the Applicable Premium (as defined below), if any, thereon at the time of
redemption, together with accrued interest, if any, thereon to the redemption date. In no event
will the redemption price be less than 100% of the principal amount of the 2040 Bonds plus accrued
interest, if any, thereon to the redemption date.

“Applicable Premium” means, with respect to a 2040 Bond (or portion thereof) being redeemed at
any time, the excess of (a) the present value at such time of the principal amount of such 2040
Bond (or portion thereof) being redeemed plus all scheduled interest payments on such 2040 Bond (or
portion thereof excluding interest accrued to the redemption date) after the redemption date, which
present value shall be computed using a discount rate equal to the Treasury Rate (as defined below)
plus 50 basis points, over (b) the principal amount of such 2040 Bond (or portion thereof) being
redeemed at such time. For purposes of this definition, the present values of interest and
principal payments will be determined in accordance with generally accepted principles of financial
analysis.

“Treasury Rate” means the yield to maturity at the time of computation of United States
Treasury securities adjusted to constant maturity under the caption “Treasury constant maturities,
Nominal” (as compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) (the “Statistical Release”)) which has become publicly available at least two Business
Days prior to the redemption date (or, if such Statistical Release is no longer published, any
publicly available source of similar market data) most nearly equal to the then remaining average
life to stated maturity of the 2040 Bonds; provided, however, that if the average life (rounded to
the first decimal point) to stated maturity of the 2040 Bonds is not equal to the constant maturity
of a United States Treasury security for which a weekly average yield (in the Statistical Release
columns labeled “Week Ending”) is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of
United States Treasury securities for which such yields are given.

The Treasury Rate will be calculated on the third Business Day preceding the date fixed for
redemption.

If the original redemption date is on or after a record date and on or before the relevant
interest payment date, the accrued and unpaid interest, if any, will be paid to the person or
entity in whose name the 2040 Bond is registered at the close of business on the record date, and
no additional interest will be payable to the holders whose 2040 Bonds shall be subject to
redemption.

If less than all of the 2040 Bonds are to be redeemed, the Trustee shall select, in such
manner as it shall deem appropriate and fair, the particular 2040 Bonds or portions thereof to be
redeemed. Notice of redemption shall be given by mail not less than 30 nor more than 60 days prior
to the date fixed for redemption to the holders of the 2040 Bonds to be redeemed; provided,
however, that the failure to duly give such notice by mail, or any defect therein, shall not affect
the validity of any proceedings for the redemption of the 2040 Bonds as to which there shall have
been no such failure or defect. On and after the date fixed for redemption (unless the Company
shall default in the payment of the 2040 Bonds or portions thereof to be redeemed at the applicable
redemption price, together with accrued interest, if any, thereon to such date), interest on the
2040 Bonds or the portions thereof so called for redemption shall cease to accrue.

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 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, (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
2040 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 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.

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 office
or agency of the Company in the Borough of Manhattan, The City of New York. 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.

[END OF FORM OF REGISTERED BOND OF THE 2040 BONDS]

- — - — - — - — - — - — - — -

AND WHEREAS all acts and things necessary to make 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, and 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 $250 million principal amount of the 2022 Bonds, and the
$50 million principal amount of the 2040 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, alienate and convey unto The Bank of New
York Mellon, 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 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 one series of bonds (the “2022 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 2022 Bonds shall be issued in
the aggregate principal amount of $250 million, shall mature on September 1, 2022 and shall be
issued only as registered bonds without coupons in denominations of $100,000 and any multiple
thereof. The serial numbers of the 2022 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 2022 Bonds 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 March 1 and September 1 in each year. 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. The 2022
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 office or
agency of the Company in the Borough of Manhattan, The City of New York. 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. There is hereby created one series of bonds (the “2040 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 2040 Bonds shall be issued in
the aggregate principal amount of $50 million, shall mature on September 1, 2040 and shall be
issued only as registered bonds without coupons in denominations of $100,000 and any multiple
thereof. The serial numbers of the 2040 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 2040 Bonds 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 March 1 and September 1 in each year. 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. The 2040
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 office or
agency of the Company in the Borough of Manhattan, The City of New York. 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 3. Any or all of the 2022 Bonds and the 2040 Bonds may be redeemed by the Company at
any time and from time to time prior to maturity, at a redemption price equal to 100% of the
principal amount of such Bonds being redeemed plus the Applicable Premium (as defined below), if
any, thereon at the time of redemption, together with accrued interest, if any, thereon to the
redemption date. In no event will the redemption price be less than 100% of the principal amount
of the Bonds plus accrued interest, if any, thereon to the redemption date.

“Applicable Premium” means, with respect to a Bond (or portion thereof) being redeemed at any
time, the excess of (A) the present value at such time of the principal amount of such Bond (or
portion thereof) being redeemed plus all scheduled interest payments on such Bond (or portion
thereof excluding interest accrued to the redemption date) after the redemption date, which present
value shall be computed using a discount rate equal to the Treasury Rate (as defined below) plus 50
basis points, over (b) the principal amount of such Bond (or portion thereof) being redeemed at
such time. For purposes of this definition, the present values of interest and principal payments
will be determined in accordance with generally accepted principles of financial analysis.

“Treasury Rate” means the yield to maturity at the time of computation of United States
Treasury securities adjusted to constant maturity under the caption “Treasury constant maturities,
Nominal” (as compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) (the “Statistical Release”)) which has become publicly available at least two Business
Days prior to the redemption date (or, if such Statistical Release is no longer published, any
publicly available source of similar market data) most nearly equal to the then remaining average
life to stated maturity of the Bonds; provided, however, that if the average life (rounded to the
first decimal point) to stated maturity of the Bonds is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield (in the Statistical Release
columns labeled “Week Ending”) is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of
United States Treasury securities for which such yields are given.

The Treasury Rate will be calculated on the third Business Day preceding the date fixed for
redemption.

If the original redemption date is on or after a record date and on or before the relevant
interest payment date, the accrued and unpaid interest, if any, will be paid to the person or
entity in whose name the Bond is registered at the close of business on the record date, and no
additional interest will be payable to the holders whose 2022 Bonds or 2040 Bonds, as the case may
be, shall be subject to redemption.

If less than all of the 2022 Bonds and 2040 Bonds, as the case may be, are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair, the particular 2022
Bonds and 2040 Bonds or portions thereof to be redeemed, as the case may be. Notice of redemption
shall be given by mail not less than 30 nor more than 60 days prior to the date fixed for
redemption to the holders of the Bonds to be redeemed; provided, however, that the failure to duly
give such notice by mail, or any defect therein, shall not affect the validity of any proceedings
for the redemption of the Bonds as to which there shall have been no such failure or defect. On
and after the date fixed for redemption (unless the Company shall default in the payment of the
Bonds or portions thereof to be redeemed at the applicable redemption price, together with accrued
interest, if any, thereon to such date), interest on the 2022 Bonds and 2040 Bonds or the portions
thereof, as the case may be, so called for redemption shall cease to accrue.

SECTION 4. The Bonds are not redeemable by the operation of the maintenance and replacement
provisions of this Indenture or with the proceeds of released property or in any other manner
except as set forth in Section 3 hereof.

SECTION 5. The Company reserves the right, without any consent, vote or other action by the
holders of the 2022 Bonds and the 2040 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 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 6. 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 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
herein (other than those contained in the tenth and eleventh 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 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 2022 Bonds and the 2040 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:

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.

2

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.

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.

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.

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.

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 Townships 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 County, Michigan.

3

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.

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.

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.

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.

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.

4

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,
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.

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 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.)

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.

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.

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 S 01 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
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.

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 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 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 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.

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.

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.)

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 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 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.

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 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; 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 The Bank of New York Mellon, 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 an authorized
signatory, in several counterparts, all as of the day and year first above written.

CONSUMERS ENERGY COMPANY

	 	 	 	 	 
	(SEAL)

	 	 	 	By: /s/ Laura L Mountcastle
	
 
	 	 	 	 
	Attest:

	 	 	 	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/ Denise J. Lehrke

	 	

	 	

	 

	 	

	 	

	Denise J. Lehrke

	 	

	 	

	STATE OF MICHIGAN

COUNTY OF JACKSON

	 	)

ss.

)
	 	

The foregoing instrument was acknowledged before me this 1st day of September 2010, 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: 06/14/16

Acting in the County of Jackson

THE BANK OF NEW YORK MELLON,

AS TRUSTEE

	 	 	 	 	 
	(SEAL)

	 	 	 	By: /s/ Laurence O’Brien
	
 
	 	 	 	 
	Attest:

	 	

	 	Laurence O’Brien

Vice President

	/s/ Timothy Casey

	 	

	 	

	 

	 	

	 	

	Timothy Casey

Senior Associate

	 	

	 	

	Signed, sealed and delivered

by The Bank of New York Mellon

in the presence of

	 	

	 	

	/s/ Patricia Lin

	 	

	 	

	 

	 	

	 	

	Patricia Lin

	 	

	 	

	/s/ Lisha John

	 	

	 	

	 

	 	

	 	

	Lisha John

	 	

	 	

	STATE OF NEW YORK

COUNTY OF NEW YORK

	 	)

ss.

)
	 	

The foregoing instrument was acknowledged before me this 1st day of September, 2010, by
Laurence O’Brien, a Vice President of THE BANK OF NEW YORK MELLON, as Trustee, a New York banking
corporation, on behalf of the bank.

/s/ Daniel C. Marcel

	 	 	Daniel Marcel

Daniel C. Marcel

Notary Public. State of New York

No. 01MA6220648

Qualified in Westchester County

Commission Expires April 19, 2014

	 	 	 
	Prepared by:
	 	When recorded, return to:

	Kimberly C. Wilson

One Energy Plaza, EP11-210

Jackson, MI 49201
	 	Consumers Energy Company

Business Services Real Estate Dept.

Attn: Carrie Main, EP7-437

One Energy Plaza

Jackson, MI 49201

5EX-4.1

CAPITAL PLAN

of the

FEDERAL HOME LOAN BANK of TOPEKA

TABLE OF CONTENTS

	 	 	 
	Topic

	 	Section

	 	 	 	 	 	 	 	 	 
	Authority 
	 	 	1	 	 	 	 	 
	Definitions 
	 	 	2	 	 	 	 	 
	Objectives 
	 	 	3	 	 	 	 	 
	Capitalization 
	 	 	4	 	 	 	 	 
	Capital Requirements and Ratios 
	 	 	5	 	 	 	 	 
	Statutory and Regulatory Requirements 
	 	 	5.a	 	 	 	 	 
	Capital Ratios 
	 	 	5.b	 	 	 	 	 
	Capital Structure 
	 	 	6	 	 	 	 	 
	Class A Common Stock 
	 	 	6.a	 	 	 	 	 
	Class B Common Stock 
	 	 	6.b	 	 	 	 	 
	Minimum Stock Purchase Requirement 
	 	 	7	 	 	 	 	 
	Asset-Based Stock Purchase Requirement 
	 	 	7.a	 	 	 	 	 
	Specified Percentage 
	 	 	7.a.1	 	 	 	 	 
	Minimum Dollar Amount 
	 	 	7.a.2	 	 	 	 	 
	Maximum Dollar Amount 
	 	 	7.a.3	 	 	 	 	 
	Asset-Based Stock Purchase Requirement Determination 
	 	 	7.a.4	 	 	 	 	 
	New Members 
	 	 	7.a.5	 	 	 	 	 
	Activity-Based Stock Purchase Requirement 
	 	 	7.b	 	 	 	 	 
	Advances 
	 	 	7.b.1	 	 	 	 	 
	Acquired Member Assets (AMA) 
	 	 	7.b.2	 	 	 	 	 
	Letters of Credit 
	 	 	7.b.3	 	 	 	 	 
	Exchange Agreements 
	 	 	7.b.4	 	 	 	 	 
	Continuing Monitoring Requirement; Change in Stock
Requirements 
	 	 	7.c	 	 	 	 	 
	Dividends 
	 	 	8	 	 	 	 	 
	No Dividend Preference 
	 	 	8.a	 	 	 	 	 
	Dividend Parity Threshold; Notice to Stockholders 
	 	 	8.b	 	 	 	 	 
	Calculation of Stock Dividend 
	 	 	8.c	 	 	 	 	 
	Compliance with Regulatory Capital Requirements 
	 	 	8.d	 	 	 	 	 
	Liquidation 
	 	 	9	 	 	 	 	 
	Voting Rights 
	 	 	10	 	 	 	 	 
	Ownership of Retained Earnings 
	 	 	11	 	 	 	 	 
	Other Provisions Governing Stock 
	 	 	12	 	 	 	 	 
	Issuance 
	 	 	12.a	 	 	 	 	 
	Transfer 
	 	 	12.b	 	 	 	 	 
	Repurchase at Bank’s Initiative 
	 	 	12.c	 	 	 	 	 
	Repurchase or Exchange of Class A Common Stock 
	 	 	12.d	 	 	 	 	 
	Repurchase or Exchange of Class B Common Stock 
	 	 	12.e	 	 	 	 	 
	Bank’s Election to Exchange Class B Common Stock for Class A
Common Stock 
	 	 	12.f	 	 	 	 	 
	Regular Exchange Program 
	 	 	12.g	 	 	 	 	 
	Cash in Lieu of Class A Common Stock 
	 	 	12.h	 	 	 	 	 
	Withdrawal from Membership; Stock Redemption Requests 
	 	 	13	 	 	 	 	 
	Voluntary Withdrawal 
	 	 	13.a	 	 	 	 	 
	Cancellation of Withdrawal Notice 
	 	 	13.b	 	 	 	 	 
	Stock Redemption Request 
	 	 	13.c	 	 	 	 	 
	Redemption, Repurchase and Exchange Limitations 
	 	 	13.d	 	 	 	 	 
	Redemption Request Prior to Exchange 
	 	 	13.e	 	 	 	 	 
	Cancellation of Stock Redemption Request or Request to Withdraw
From Membership 
	 	 	13.f	 	 	 	 	 
	Involuntary Withdrawal 
	 	 	13.g	 	 	 	 	 
	Termination of Membership Resulting From Merger or Consolidation
	 	 	 	 	 	 	13.h	 
	Other Provisions Governing Involuntary Termination of Membership
	 	 	 	 	 	 	13.i	 
	Implementation of Plan 
	 	 	14	 	 	 	 	 
	Conversion Date 
	 	 	14.a	 	 	 	 	 
	Conversion of Shares 
	 	 	14.b	 	 	 	 	 
	Cancellation of Shares 
	 	 	14.c	 	 	 	 	 
	Opt Out 
	 	 	14.d	 	 	 	 	 
	Members in the Process of Withdrawing from Membership 
	 	 	14.e	 	 	 	 	 
	Orderly Liquidation 
	 	 	14.f	 	 	 	 	 
	Failure to Opt Out 
	 	 	14.g	 	 	 	 	 
	Amendment of Plan 
	 	 	15	 	 	 	 	 
	Basis for Implementation 
	 	 	16	 	 	 	 	 
	Independent Accountant 
	 	 	17	 	 	 	 	 
	Rating Agency 
	 	 	18	 	 	 	 	 

Adopted by Board of Directors: May 26, 2010

Approved by Federal Housing Finance Agency: September 1, 2010

Federal Home Loan Bank of Topeka

Capital Plan

	1)	 	Authority. This Capital Plan is established pursuant to the Federal Home Loan Bank
Act (12 U.S.C. 1421 et seq.) and Title 12 of the Code of Federal Regulations (C.F.R.)
promulgated by the Federal Housing Finance Agency and sets forth a plan for the establishment
and implementation of a new capital structure for the Federal Home Loan Bank of Topeka.

	2)	 	Definitions. For purposes of this Plan, all capitalized terms used but not defined
elsewhere have the following meanings:

Activity-Based Stock Purchase Requirement means the Stock purchase requirement under
which a Member must acquire and hold a specific amount of Class B Common Stock as a condition
of transacting business with the Bank, the aggregate amount of which is a function of the
volume of particular products or services provided to that Member by the Bank.

Acquired Member Assets (AMA) means those assets acquired from Members by the Bank in
accordance with 12 C.F.R. Part 955.

Advance has the same meaning as set forth in 12 C.F.R. 900.2.

Asset-Based Stock Purchase Requirement means the Stock purchase requirement under which
a Member must acquire and hold a specific amount of Class A Common Stock based on that Member’s
total assets.

Bank means the Federal Home Loan Bank of Topeka.

Board means the board of directors of the Bank.

Business Day means any day on which the Bank is open to conduct business.

Class A Common Stock means Stock issued by the Bank that has a par value of one hundred
dollars ($100) per share and is redeemable at par for cash on six (6) months’ written notice to
the Bank, consistent with Finance Agency regulations.

Class B Common Stock means Stock issued by the Bank that has a par value of one hundred
dollars ($100) per share and is redeemable at par for cash on five (5) years’ written notice to
the Bank, consistent with Finance Agency regulations.

Conversion Date means the date upon which the Bank’s current stock is converted into
Stock as provided under this Plan.

Dividend Parity Threshold means a dividend rate expressed as a percentage per annum up
to which the dividends paid per share on Class A Common Stock and Class B Common Stock must be
equal.

Excess Class B Common Stock means the amount of Class B Common Stock owned by each
Member in excess of its Activity-Based Stock Purchase Requirement.

Excess Stock means the Stock held by a given Member that is in excess of that Member’s
then current Minimum Stock Purchase Requirement.

Exchange means the simultaneous repurchase by the Bank of excess shares of one class of
Stock and the purchase of an equivalent number of shares of another class of Stock on behalf of
a Member.

FHLBank Act means the Federal Home Loan Bank Act, as amended from time to time, and
codified at 12 U.S.C. 1421 et seq.

FHLBanks means the twelve Federal Home Loan Banks created by the FHLBank Act.

Finance Agency means the Federal Housing Finance Agency, the regulator of the Bank, and
any successor regulator of the Bank.

GAAP means generally accepted accounting principles in the United States of America.

Leverage Capital Ratio means the percentage value obtained by dividing weighted Total
Capital by the Bank’s total assets. For purposes of this calculation, weighted Total Capital
shall be computed by multiplying Permanent Capital by 1.5 and adding to this product all other
components of Total Capital.

Member means an institution that has been approved for Membership and has satisfied its
Minimum Stock Purchase Requirement and all other conditions of Membership, as set forth herein
or as may otherwise be applicable.

Membership means all of the rights, privileges and obligations associated with being a
Member.

Minimum Stock Purchase Requirement means the total amount of Stock that must be
purchased by a Member as set forth in Section 7 hereof, which requirement is based both on a
Member’s asset size and activity with the Bank.

Permanent Capital means the amount of retained earnings of the Bank, determined in
accordance with GAAP, plus the amounts paid in for Class B Common Stock.

Plan means this Capital Plan, as amended, supplemented or modified from time to time.

Redemption means the acquisition by the Bank of outstanding shares of Stock from a
Member at par value in cash, based on a written request from that Member, following the
expiration of the statutory Redemption notification period for the Stock.

Redemption Cancellation Fee means the fee imposed by the Bank upon a Member that has
given the Bank notice of the Member’s intent to redeem Stock or its request to withdraw from
Membership, and such Redemption request or request to withdraw from Membership is subsequently
cancelled, revoked or withdrawn.

Regulatory Capital Requirements means the amount of Total Capital and Permanent Capital
that the Bank is required to hold to comply with the Total Capital and Risk-Based Capital
requirements, respectively, set forth in the FHLBank Act and 12 C.F.R. Part 932.

Repurchase means the acquisition by the Bank of shares of Excess Stock at par value in
cash and at the Bank’s discretion prior to the expiration of the required Redemption
notification period applicable to such Excess Stock.

Risk-Based Capital means the Permanent Capital carried to mitigate the impact of credit
risk, market risk, and operations risk on the Bank.

Risk Management Policy means a policy approved by the Board in accordance with the
provisions of 12 C.F.R. Part 917 that addresses the Bank’s management of its exposure to credit
risk, market risk, liquidity risk, business risk, and operations risk.

Stock means Class A Common Stock and/or Class B Common Stock.

Total Capital of the Bank means the aggregate sum of the Bank’s Permanent Capital plus
the amounts paid-in for Class A Common Stock, and any general allowance for losses and any
other amounts from sources available to the Bank to absorb losses incurred by the Bank that the
Finance Agency determines to be appropriate.

Total Capital Ratio means the percentage value obtained by dividing unweighted Total
Capital by the Bank’s total assets.

	3)	 	Objectives. The objectives of the Plan are to:

	 	a)	 	Establish and maintain a capital structure that will provide for the safe and sound
operation of the Bank while promoting the long-term financial viability of the Bank and
the Bank’s ability to support the business activities of its Members within applicable
statutory and regulatory authorities and at the same time preserving the cooperative
nature of the FHLBanks.

	 	b)	 	Set forth provisions governing Stock in compliance with 12 C.F.R. Part 931.

	 	c)	 	Provide sufficient Total Capital and Permanent Capital to comply with the Bank’s
Regulatory Capital Requirements.

	 	d)	 	Implement a flexible capital structure that is expected to facilitate the long-term
growth and profitability of the Bank and allow the Bank to provide greater value to its
members. The capital structure authorized in this Plan provides for the Bank as well to
repurchase shares and for Members to request Redemption of their shares of Stock subject
to compliance with the provisions of this Plan and applicable rules and regulations
promulgated by the Finance Agency.

	4)	 	Capitalization. Adequate capitalization is required in order to: (a) provide for the
safe and sound operation of the Bank; (b) permit prudent leveraging into products and services
of benefit to Members; (c) provide appropriate risk-adjusted Member dividend returns; (d)
protect the Bank’s creditors against potential loss; (e) generate earnings sufficient to meet
the Bank’s various community support and public purpose obligations; and (f) comply with the
Bank’s Regulatory Capital Requirements. The need for capital is a function of the volumes of
and risks inherent in the products and services provided by the Bank to its Members.

	5)	 	Capital Requirements and Ratios.

	 	a)	 	Statutory and Regulatory Requirements. The Finance Agency interprets and
implements statutory requirements established for the FHLBanks by the U.S. Congress. As
required by the FHLBank Act, the Finance Agency has adopted regulations prescribing
various minimum levels of capital that must be held by FHLBanks. The capital regulations
require the Bank to maintain a Total Capital Ratio at least equal to four percent (4.0%),
a Leverage Capital Ratio at least equal to five percent (5.0%) and Permanent Capital in an
amount at least sufficient to cover its Risk-Based Capital requirement.

The Finance Agency has adopted capital requirements that incorporate factors weighing the
relative risk incurred by each FHLBank. The Bank’s Risk-Based Capital requirement is equal
to the sum of its capital requirements for credit risk, market risk and operations risk,
each as defined by the Finance Agency. The Bank must calculate its Risk-Based Capital
requirement and provide such calculations to the Finance Agency monthly.

	 	b)	 	Capital Ratios. In order to ensure continuing capital adequacy, and
compliance with minimum regulatory Total Capital requirements and minimum Risk-Based
Capital requirements, management and the Board shall review the Bank’s capital position on
an ongoing basis. The Total Capital Ratio, Leverage Capital Ratio and Risk-Based Capital
requirement shall be presented at each scheduled business meeting of the Board.

	6)	 	Capital Structure. Under this Plan, the Bank’s capital structure shall consist of
two classes of Stock (Class A Common Stock and Class B Common Stock) which may be purchased
and held only by Members. Class A Common Stock and Class B Common Stock shall only be issued,
redeemed and repurchased at a par value of one hundred dollars ($100) per share.
Establishment of two classes of Stock and the distinctions between them are made in the Plan
to facilitate efficient monitoring and management of the Bank’s capital structure on an
ongoing basis.

	 	a)	 	Class A Common Stock. Class A Common Stock must be held to satisfy a
Member’s Asset-Based Stock Purchase Requirement. Each Member will be required to purchase
and maintain a defined minimum amount of Class A Common Stock for as long as it is a
Member. Dividends on shares of Class A Common Stock are non-cumulative and may be paid
either in cash or as a Stock dividend in the form of shares of Class B Common Stock.

	 	b)	 	Class B Common Stock. Shares of Class B Common Stock must be held to satisfy
the Activity-Based Stock Purchase Requirement. Dividends on shares of Class B Common
Stock are non-cumulative and may be paid either in cash or as a Stock dividend in the form
of shares of Class B Common Stock.

	7)	 	Minimum Stock Purchase Requirement. A Member’s Minimum Stock Purchase Requirement
shall consist of Stock ownership of Class A Common Stock based on the Member’s asset size
(Asset-Based Stock Purchase Requirement). In addition, there will be an Activity-Based Stock
Purchase Requirement. The Bank will not issue fractional shares of Stock. Minimum purchase
requirements for Class A Common Stock and Class B Common Stock will be rounded up to the
nearest one hundred dollars ($100).

	 	a)	 	Asset-Based Stock Purchase Requirement. Each Member shall purchase and
maintain, as a condition of Membership for as long as it is a Member, an amount of Class
A Common Stock having a cumulative par value equal to a specified percentage of the
Member’s total assets as of December 31 of the preceding calendar year. The Asset-Based
Stock Purchase Requirement shall be subject to minimum and maximum dollar amounts. The
Board will establish the specified percentage and the maximum Asset-Based Stock Purchase
Requirement from time to time and changes thereto do not require Finance Agency approval,
provided they fall within the parameters set forth below.

	 	1)	 	Specified Percentage. The initial specified percentage of the
Member’s total assets established in this Plan by the Board for the Asset-Based Stock
Purchase Requirement shall be two-tenths of one percent (0.2%). Under this Plan the
Asset-Based Stock Purchase Requirement may permissibly fall within a range of not less
than one-tenth of one percent (0.1%) and not greater than four-tenths of one percent
(0.4%) of the Member’s total assets.

	 	2)	 	Minimum Dollar Amount. The minimum Asset-Based Stock Purchase
Requirement shall be one thousand dollars ($1,000).

	 	3)	 	Maximum Dollar Amount. The initial maximum dollar amount established
in this Plan by the Board for the Asset-Based Stock Purchase Requirement shall be one
million dollars ($1,000,000). The maximum Asset-Based Stock Purchase Requirement may
permissibly fall within a range of not less than five hundred thousand dollars
($500,000) and not greater than two and one-half million dollars ($2,500,000).

	 	4)	 	Asset-Based Stock Purchase Requirement Determination. The Bank shall
determine the Asset-Based Stock Purchase Requirement based on the most recent
end-of-year regulatory reports filed by a Member with its primary regulator and notify
each Member no later than April 20 of every year of the required amount of Class A
Common Stock the Member is required to purchase and hold. If a Member needs to hold
additional Class A Common Stock to meet its Asset-Based Stock Purchase Requirement,
the Bank will purchase such Stock at par on behalf of the Member by debiting the
Member’s demand deposit account on April 30 or the preceding Business Day if April 30
is not a Business Day in an amount equal to the par value of such Stock.

In addition, the Bank shall recalculate the Asset-Based Stock Purchase
Requirement for any Member that is involved in, or the subject of, any merger or
acquisition as of the date of the completion of the merger or acquisition.

If a Member is merged into an institution that is not a Member, or if a Member sells
all of its assets and liabilities to a non-Member and ceases to operate its business,
the Bank may, in its discretion, upon completion of the merger or sale recalculate that
Member’s Asset-Based Stock Purchase Requirement, which may be zero dollars ($0) since
the former Member’s charter may have no remaining assets upon which to base any
Asset-Based Stock Purchase Requirement. If the former Member would not be in
compliance with its Activity-Based Stock Purchase Requirement after recalculation of
the former Member’s Asset-Based Stock Purchase Requirement, the Bank may, in its
discretion, Exchange the former Member’s Excess Class A Common Stock for Class B Common
Stock to the extent necessary for the former Member to comply with its Activity-Based
Stock Purchase Requirement. If, as a result of such recalculation and/or Exchange,
Excess Class A Common Stock is found to exist, such Excess Stock may be repurchased
immediately by the Bank, provided that the Bank will be in compliance after such
Repurchase with its Regulatory Capital Requirements. In such circumstances, Class B
Common Stock owned by the former Member to meet its Activity-Based Stock Purchase
Requirements will become Excess Stock when such Stock is not required to fulfill an
Activity-Based Stock Purchase Requirement and may be repurchased at that time, provided
the Bank will be in compliance after such Repurchase with its Regulatory Capital
Requirements.

	 	5)	 	New Members. Upon approval of an application for Membership, the Bank
shall notify the applicant of its Asset-Based Stock Purchase Requirement based on the
applicant’s most recent annual regulatory report filed with its primary regulator.
For new de novo Members that have not yet filed an annual regulatory report with their
primary regulators, the initial Asset-Based Stock Purchase Requirement shall be one
thousand dollars ($1,000). The applicant shall meet its Asset-Based Stock Purchase
Requirement no later than sixty (60) calendar days following notification by the Bank
of the approval of its Membership application and Membership shall commence at the
time the applicant purchases sufficient Class A Common Stock to meet its Asset-Based
Stock Purchase Requirement. All initial Stock purchases by new Members must be
initiated by authorized Member personnel in writing and will be transacted by debiting
the new Member’s demand deposit account for the par value of the Class A Common Stock
sufficient to meet its Asset-Based Stock Purchase Requirement.

	 	b)	 	Activity-Based Stock Purchase Requirement. Each Member shall purchase and
maintain, as a condition of doing business with the Bank, an amount of Class B Common
Stock having a cumulative par value equal to the sum of the amounts set forth below in
Section 7(b)(1) through (4), less the Member’s Asset-Based Stock Requirement determined
pursuant to Subsection 7(a). A Member shall meet this Activity-Based Stock Purchase
Requirement for as long as the activity with the Bank requiring imposition of such
Activity-Based Stock Purchase Requirement remains outstanding. The Board will establish
the percentage for each Activity-Based Stock Purchase Requirement from time to time and
changes thereto do not require Finance Agency approval provided each is within the
percentages set forth below in Subsections 7(b)(1) through 7(b)(4). The Board may apply
any such revised Activity-Based Stock Purchase Requirement to all activity then
outstanding or only to activity which arises after the effective date of the change. At
the time a Member enters into a transaction that requires the purchase of Class B Common
Stock under this provision of the Plan, the Bank will purchase such Stock on behalf of
the Member in the following two ways:

	 	•	 	exchanging Excess Class A Common Stock held by the Member into a like
number of shares of Class B Common Stock sufficient to enable the Member to meet its
Activity-Based Stock Purchase Requirement; if this is insufficient to enable the
Member to meet its Activity-Based Stock Purchase Requirement, then

	 	•	 	by debiting the Member’s demand deposit account for the remaining amount
of its Activity-Based Stock Purchase Requirement.

	 	1)	 	Advances. The initial requirement established by the Board for
Advances is an amount equal to five percent (5.0%) of the principal amount of Advances
outstanding to the Member. The amount of Stock required to support Advance activity
shall be determined each time the Member is issued a new Advance and must be satisfied
when the Advance is made. Under this Plan, the amount of a Member’s Activity-Based
Stock Purchase Requirement based on that Member’s Advance activity may permissibly
fall within a range of not less than four percent (4.0%) and not greater than six
percent (6.0%) of the principal amount of Advances outstanding to the Member.

	 	2)	 	Acquired Member Assets (AMA). The initial requirement established by
the Board for AMA, including loans from the Mortgage Partnership Finance® Program, is
an amount equal to two percent (2.0%) of the current outstanding principal balance of
AMA originated by or through the Member and acquired by the Bank subject to a maximum
AMA requirement of one and one-half percent (1.5%) of the Member’s total assets as of
December 31 of the preceding calendar year.. The amount of Stock required to support
AMA activity shall be determined when the AMA activity is funded by the Bank or
purchased from the Member. Under this Plan the amount of a Member’s Activity-Based
Stock Purchase Requirement based on that Member’s AMA activity may permissibly fall
within a range from zero percent (0.0%) to not greater than six percent (6.0%) of the
current outstanding principal balance of AMA originated by or through that Member and
acquired by the Bank and the maximum AMA requirement may permissibly fall within a
range from one percent (1.0%) to three percent (3.0%) of the Member’s total assets as
of December 31 of the preceding year.

	 	3)	 	Letters of Credit. The initial requirement established by the Board
for letters of credit is an amount equal to zero percent (0.0%) of the principal
amount of letters of credit outstanding at the request of the Member. The amount of
Stock required to support letter of credit activity shall be calculated each time a
new letter of credit is issued on behalf of the Member and must be satisfied when the
letter of credit is issued. Under this Plan the amount of a Member’s Activity-Based
Stock Purchase Requirement based on letters of credit issued on behalf of that Member
may permissibly fall within a range from zero percent (0.0%) to not greater than one
percent (1.0%) of the principal amount of letters of credit outstanding at the request
of that Member.

	 	4)	 	Exchange Agreements. The initial requirement established by the
Board for exchange agreements (including but not limited to interest rate swaps,
currency swaps, caps, collars, floors and equity options) is an amount equal to zero
percent (0.0%) of the notional principal of the outstanding exchange agreements with
the Member. The amount of Stock required to support exchange agreement activity shall
be calculated each time the Member enters into a new exchange agreement or transaction
and must be satisfied when the new exchange agreement or transaction is effective.
Under this Plan the amount of a Member’s Activity-Based Stock Purchase Requirement
based on exchange agreements (as defined above) may permissibly fall within a range
from zero percent (0.0%) to not greater than two percent (2.0%) of the notional
principal of the outstanding exchange agreements with that Member.

	 	c)	 	Continuing Monitoring Requirement; Change in Stock Requirements. To maintain
prudent and ongoing compliance with Finance Agency regulations, the Board shall review the
Plan at least annually to determine whether adjustments are required with respect to one
or more of the following: 1) specific Stock purchase requirements and/or the types of
activities to which these shall apply; 2) the exercise by the Bank of its discretion to
repurchase Excess Stock and the methodology employed to effect such Repurchases; 3) any
increases or decreases in Redemption Cancellation Fees; and 4) the introduction of any new
subclasses of Stock.

As part of this continuing obligation to monitor the Plan, the Board shall review and, as
necessary, adjust the Asset-Based Stock Purchase Requirement and the Activity-Based Stock
Purchase Requirement to ensure that the Stock required to be purchased and maintained by
Members, along with other allowable sources of capital including Retained Earnings
determined in accordance with GAAP, is sufficient to allow the Bank to comply with its
Regulatory Capital Requirements. Upon notification of a change in the Asset-Based Stock
Purchase Requirement or the Activity-Based Stock Purchase Requirement, a Member shall have
sixty (60) calendar days from the notification date to comply with the new Minimum Stock
Purchase Requirement. During said sixty (60)-day period, however, a Member will be
ineligible to engage in any new activity with the Bank unless the Member is then in
compliance with the new Minimum Stock Purchase Requirement. A Member may elect to reduce
its outstanding business with the Bank as a means of complying with the adjusted
Activity-Based Stock Purchase Requirement. For each Member that is not in compliance with
the new Minimum Stock Purchase Requirement at the end of the sixty (60)-day period, the
Bank will:

	 	•	 	exchange Excess Class A Common Stock or Excess Class B Common Stock held
by each Member into a like number of shares of Class B Common Stock or Class A Common
Stock sufficient to enable the Member to meet its new Minimum Stock Purchase
Requirement; if this is insufficient to enable the Member to meet its new Minimum
Stock Purchase Requirement, then

	 	•	 	purchase such amount of Class A Common Stock and/or Class B Common Stock
necessary to bring the Member into compliance with the new Minimum Stock Purchase
Requirement on behalf of the Member by debiting the Member’s demand deposit account.

	8)	 	Dividends. The Board, in conformance with the FHLBank Act and applicable Finance
Agency regulations, may declare dividends, expressed as a percentage rate per annum based upon
the par value of Stock, from time to time on the shares of Class A Common Stock outstanding
and the shares of Class B Common Stock outstanding as provided below, provided the Bank will
continue to meet its Regulatory Capital Requirements after such dividend payment.

	 	a)	 	Dividend Parity Threshold; Notice to Stockholders. The Board shall establish
and notify Members of the initial Dividend Parity Threshold on or before the Conversion
Date. The Dividend Parity Threshold will be expressed as a negative or positive spread
relative to a published interest rate index or an internally calculated reference interest
rate based upon any of the Bank’s assets or liabilities. The Dividend Parity Threshold
may be changed from time to time at the discretion of the Board. The Bank shall notify
Members of any change to the Dividend Parity Threshold at least ninety (90) calendar days
prior to a dividend payment.

	 	b)	 	No Dividend Preference. The dividend rate per annum for Class A Common Stock
and Class B Common Stock will be equal up to the Dividend Parity Threshold. Dividend
rates in excess of the Dividend Parity Threshold may be paid on Class A Common Stock or
Class B Common Stock at the discretion of the Board; provided, however, that the dividend
rate per annum paid on the Class B Common Stock shall equal or exceed the dividend rate
per annum paid on the Class A Common Stock. For purposes of the establishment of dividend
rates, the Bank may project for the dividend period the reference interest rate used in
the Dividend Parity Threshold calculation, in the Bank’s absolute discretion, and may
declare and pay dividends at rates per annum based on such projection without regard to
the actual reference interest rate subsequently published or calculated for the dividend
period.

	 	c)	 	Calculation of Stock Dividend. In determining the number of shares to be
issued when Stock dividends are declared, the number of shares will be rounded down to the
nearest one hundred dollars ($100) of par value and any fractional shares shall be
distributed in the form of a cash dividend.

	 	d)	 	Compliance with Regulatory Capital Requirements. The Bank shall not declare
or pay a dividend if it is not, or if after paying the dividend it would not be, in
compliance with its Regulatory Capital Requirements.

	9)	 	Liquidation. The claims of holders of Class A Common Stock and the claims of holders
of Class B Common Stock shall be pari passu with respect to the assets of the Bank in any
liquidation proceeding. Any cash and property remaining after the satisfaction of all valid
obligations of the Bank shall be divided between the Class A Common Stockholders and the Class
B Common Stockholders in proportion to the number of shares of each class of Stock
outstanding. Any rights set forth in this section can be modified, restricted or eliminated
by any rules, regulations or orders prescribed by the Finance Agency.

	10)	 	Voting Rights. A Member shall have the right to vote its Class A Common Stock and
Class B Common Stock in elections of members of the Board. For each directorship that is to
be filled in an election, each Member located in the state to be represented by the
directorship, or each Member of the Bank, depending on the type of directorship, is entitled
to cast one vote for each share of Stock the Member was required to hold under this Plan as of
December 31 of the calendar year immediately preceding the election year. No Member, however,
may cast for any one directorship a number of votes representing that Member’s shares of a
class of Stock that exceeds the average number of shares of that class of Stock that all
Members located in that state were required to hold as of December 31 of the calendar year
immediately preceding the election year. This limitation shall be calculated separately for
holdings of Class A Common Stock and Class B Common Stock.

	11)	 	Ownership of Retained Earnings. The owners of Class B Common Stock shall have an
ownership interest in the retained earnings, surplus, undivided profits and equity reserves,
if any, of the Bank, but shall have no right to receive any portion of those items, except
through declaration of a dividend or capital distribution approved by the Board or through the
liquidation of the Bank and provided such ownership interest shall not preclude the Bank from
paying dividends to Class A Common Stockholders from retained earnings or adversely impact the
right of Class A Common Stockholders to receive liquidating distributions as otherwise
described in this Plan.

	12)	 	Other Provisions Governing Stock.

	 	a)	 	Issuance. Stock shall not be issued by the Bank other than in accordance
with 12 C.F.R. 931.2 and may only be issued to Members.

	 	b)	 	Transfer. Stock may be traded only between the Bank and its Members. A
Member may not transfer any Stock to any other person or entity, including another Member;
provided, however, that in the event of a merger or consolidation of two or more Members
the Stock of the disappearing Member or Members shall be transferred by the Bank to the
surviving or consolidated Member. In the event of a merger or consolidation of one or
more Members into a non-Member institution, the Bank will redeem the Stock owned by the
merged or acquired Member in accordance with the provisions of Section 13(h) hereof.

	 	c)	 	Repurchase at Bank’s Initiative. The Bank, in its discretion, may develop a
Repurchase program as to Excess Stock held by Members. Any such Excess Stock Repurchase
program adopted by the Bank shall be implemented based on an objective formula
consistently applied to all Members. If, in applying such formula, the Bank would fail to
meet its Regulatory Capital Requirements, then the Bank may repurchase Excess Stock only
up to an amount that would permit the Bank to continue to meet its Regulatory Capital
Requirements. In such an event, the Bank shall repurchase such Excess Stock from affected
Members on a consistent basis. Prior to repurchasing Excess Stock on its own initiative,
the Bank shall provide a Member not less than five (5) Business Days’ written notice of
such Repurchase.

	 	d)	 	Repurchase or Exchange of Class A Common Stock. At the request of a Member
through a written Redemption request submitted to the Bank, the Bank may, in its
discretion, repurchase from that Member shares of Class A Common Stock which exceed the
Member’s Asset-Based Stock Purchase Requirement, provided that the Bank will continue to
meet its Regulatory Capital Requirements after the Repurchase. Refer to Section 13(c)
hereof for a discussion of written Redemption requests made of the Bank not in connection
with a notice of withdrawal.

Likewise, at the request of a Member through a written Exchange request submitted to the
Bank, the Bank may, in its discretion, Exchange for shares of Class B Common Stock shares
of Class A Common Stock which exceed the Member’s Asset-Based Stock Purchase Requirement,
provided that the Bank will continue to meet its Regulatory Capital Requirements after the
Exchange. The Bank will notify the Member within five (5) Business Days of the receipt of
the written Exchange request if the Bank intends to deny the request. Any such Exchange
request that is denied by the Bank becomes null and void, with the Bank under no obligation
to warehouse such requests in the event that it should decide to accept and process
Exchange requests at some time in the future. Absent Bank notification of its intent to
deny the member’s written Exchange request within five (5) Business Days of the receipt of
the written Exchange request, the Bank will exchange such stock subject to the written
Exchange request.

	 	e)	 	Repurchase or Exchange of Class B Common Stock. At the request of a Member
through a written Redemption request submitted to the Bank, the Bank may, in its
discretion, repurchase from that Member shares of Class B Common Stock which exceed the
Member’s Activity-Based Stock Purchase Requirement, provided that the Bank will continue
to meet its Regulatory Capital Requirements after the Repurchase. Refer to Section 13(c)
hereof for a discussion of written Redemption requests made of the Bank not in connection
with a notice of withdrawal.

Likewise, at the request of a Member through a written Exchange request submitted to the
Bank, the Bank may, in its discretion, Exchange for shares of Class A Common Stock shares
of Class B Common Stock which exceed the Member’s Activity-Based Stock Purchase
Requirement, provided that the Bank will continue to meet its Regulatory Capital
Requirements after the Exchange. The Bank will notify the Member within five (5) Business
Days of the receipt of the written Exchange request if the Bank intends to deny the
request. Any such Exchange request that is denied by the Bank becomes null and void, with
the Bank under no obligation to warehouse such requests in the event that it should decide
to accept and process Exchange requests at some time in the future. Absent Bank
notification of its intent to deny the member’s written Exchange request within five (5)
Business Days of the receipt of the written Exchange request, the Bank will exchange such
stock subject to the written Exchange request.

	 	f)	 	Bank’s Election to Exchange Class B Common Stock for Class A Common Stock.
If the Bank will continue to meet its Regulatory Capital Requirements after such Exchange,
the Bank may, in its discretion, elect to exchange all or a portion of the Excess Class B
Common Stock held by Members for Class A Common Stock at any time the Bank determines that
Members hold Excess Class B Common Stock. Any such Exchange adopted by the Bank shall be
implemented based on an objective formula consistently applied to all Members. If, in
applying such formula, the Bank would fail to meet its Regulatory Capital Requirements,
then the Bank may Exchange Excess Class B Common Stock only up to an amount that would
permit the Bank to continue to meet its Regulatory Capital Requirements.  In such an
event, the Bank shall reduce the amount of such Excess Class B Common Stock exchanged from
each Member on a consistent basis. The Bank shall give Members not less than five (5)
Business Days’ notice of the Exchange.

	 	g)	 	Regular Exchange Program. The Bank, in its discretion, may elect to
establish a regular Exchange program under subsection (f). If the Bank elects to
implement a regular Exchange program, then not less than thirty (30) calendar days prior
to the first Exchange, the Bank shall notify all Members: (1) that the Bank will exchange
all or a portion of the Excess Class B Common Stock for Class A Common Stock at regular
intervals; (2) the date on which the Bank will conduct the first Exchange; and (3) the
regular interval at which subsequent Exchanges will occur. If a regular exchange program
is established, the Bank shall provide all Members not less than five (5) Business Days’
advance notice if the Bank is: (1) changing the regular interval for such Exchanges; or
(2) terminating such regular Exchange program.

	 	h)	 	Cash in Lieu of Class A Common Stock. A Member may direct the Bank to pay
cash to the Member in lieu of Class A Common Stock in any Exchange described in
subsections 12(f) and 12(g) by notifying the Bank in writing. This directive will be
effective for all Exchanges occurring thirty (30) calendar days after such writing is
received by the Bank. Upon written request from the Member to terminate the directive to
pay cash, the Bank may, in its discretion, allow such directive to be terminated.

	13)	 	Withdrawal from Membership; Stock Redemption Requests.

	 	a)	 	Voluntary Withdrawal. A Member may withdraw from Membership by providing the
Bank with written notice of the Member’s intent to withdraw from Membership consistent
with 12 C.F.R. 1263.26. The applicable Stock Redemption period for Class A Common Stock
and Class B Common Stock shall be deemed to begin upon the Bank’s receipt of such written
notice. The effective date of the withdrawal will be the date on which the applicable
Stock Redemption period ends relative to that Member’s Class A Common Stock, unless the
Member has cancelled its notice of withdrawal prior to that date. The Member shall
continue to retain sufficient Class A Common Stock to meet its Asset-Based Stock Purchase
Requirement until the six-month Redemption period has passed, at which time the Bank may,
in its discretion, Exchange such Class A Common Stock for Class B Common Stock in an
amount sufficient to meet the former Member’s Activity-Based Stock Purchase Requirement
with Class B Common Stock and/or, to the extent such Class A Common stock is Excess Stock
and not necessary to meet the former Member’s Activity-Based Stock Purchase Requirement,
redeem such Class A Common Stock at par and for cash by crediting the former Member’s
demand deposit account, in accordance with Finance Agency regulations. Such withdrawing
Member shall continue to retain sufficient Class A Common Stock or Class B Common Stock to
meet its Activity-Based Stock Purchase Requirement for as long as any activity creating an
Activity-Based Stock Purchase Requirement remains outstanding. The Activity-Based Stock
Purchase Requirement for a former Member shall always be the Activity-Based Stock Purchase
Requirement in effect on the effective date of a former Member’s withdrawal from
Membership in accordance with the applicable provisions of this Plan. When such activity
has been completed, the Bank will, if the applicable Redemption period has expired, redeem
such former Member’s Excess Stock at par and for cash by crediting the former Member’s
demand deposit account, in accordance with this Plan and Finance Agency regulations,
provided that the Bank will continue to meet its Regulatory Capital Requirements after the
Redemption. If the applicable Redemption period has not expired, the Bank may allow the
Redemption period to proceed or, in its discretion, Repurchase such former Member’s
outstanding Excess Stock at par and for cash by crediting the former Member’s demand
deposit account, in accordance with this Plan and Finance Agency regulations, provided
that the Bank will continue to meet its Regulatory Capital Requirements after the
Repurchase.

	 	b)	 	Cancellation of Withdrawal Notice. A Member may cancel its notice of
withdrawal at any time prior to the effective date of the withdrawal by providing the Bank
written notice of such cancellation.

	 	c)	 	Stock Redemption Request. A Member that desires to redeem a part of its
Class A Common Stock or all or part of its Class B Common Stock shall provide the Bank a
written request for Redemption stating the number and class of shares to be redeemed;
provided, however, that a Member may not have more than one Redemption request outstanding
at one time with respect to the same share of Stock.

The Bank’s receipt of a written Redemption request shall commence the six-month and
five-year Stock Redemption periods for the Class A Common Stock and Class B Common Stock,
respectively, subject to the Redemption request.

On each written Redemption request, the Bank will notify the Member within five (5)
Business Days of the Bank’s receipt of the written Redemption request if the Bank does not
intend to Repurchase or cannot Repurchase the Class A Common Stock and/or Class B Common
Stock that is the subject of the Redemption request. The date of such notification by the
Bank will not affect the commencement of the Redemption periods, which begin on the date
the written Redemption request is received by the Bank.

As to a written Redemption request made of the Bank not in connection with a notice of
withdrawal, and for which the Bank has provided the above notification, the Bank reserves
the right to repurchase any or all of the Excess Class A Common and/or Excess Class B
Common Stock that is the subject of a Member’s Redemption request at any time prior to the
expiration of the applicable Redemption period, provided that the Bank furnishes one (1)
Business Day’s notice prior to Repurchase and, both prior to and immediately following such
a Repurchase, continues to meet its Regulatory Capital Requirements.

	 	d)	 	Redemption, Repurchase and Exchange Limitations.

	 	1)	 	The Bank will not redeem or repurchase any Stock if doing so would cause the
Bank to fail to comply with its Regulatory Capital Requirements, or would cause the
Member involved in such transaction to fail to meet its Minimum Stock Purchase
Requirement. As to additional provisions regarding Redemption of Stock, refer to
Section 13(f) of this Plan.

	 	2)	 	On any day that the sum of all requested Redemptions maturing on that day
equals or exceeds an amount that would cause the Bank to fall below the minimum
Regulatory Capital Requirements, Redemptions will be suspended until either those
requests can be honored in full or the Board establishes pro rata Redemption
procedures.

	 	3)	 	If the Board reasonably believes that continued Redemptions would cause the
Bank to fail to meet its Regulatory Capital Requirements, would prevent the Bank from
maintaining adequate capital against a potential risk that may not be adequately
reflected in its Regulatory Capital Requirements or would otherwise prevent the Bank
from operating in a safe and sound manner, it may suspend any and all Redemptions.
During such period of suspended Redemptions, written permission of the Finance Agency
shall be obtained prior to any Repurchase or Exchange. Within two (2) Business Days
of such suspension, the Bank shall notify the Finance Agency of the reasons for the
suspension and the Bank’s strategies for addressing the situation. The Finance Agency
has the right to order the Bank to re-institute Redemptions of Stock.

	 	4)	 	Written approval from the Finance Agency shall be required prior to
Redemption, Repurchase or Exchange if there has been a determination by the Board or
the Finance Agency that the Bank has incurred, or is likely to incur, losses that
result in, or are likely to result in, charges against the capital of the Bank as
defined in the applicable rules and regulations. This requirement shall apply even if
the Bank is in compliance with its Regulatory Capital Requirements, and shall remain
in effect as long as the Bank continues to incur such charges, or until the Finance
Agency determines that such charges are no longer expected to continue.

	 	e)	 	Redemption Request Prior to Exchange.

	 	1)	 	If at any time a Member has pending a Redemption request for Class B Common
Stock and that Class B Common Stock is exchanged for Class A Common Stock by the Bank
under Subsections 7(a), 12(f) or 12(g), the Redemption request for the amount of Class
B Common Stock exchanged is automatically cancelled. In such event, the Bank shall
not impose a Redemption Cancellation Fee. A new written Redemption request must be
submitted by the Member for the newly issued Class A Common Stock if the Member wants
to redeem that Class A Common Stock. If such an Exchange comprises only a portion of
a Member’s existing Redemption request for Class B Common Stock, the Redemption period
for that portion of the Member’s Class B Common Stock that is not exchanged is
determined by and continues to run from the initial date the Redemption request was
received by the Bank.

	 	2)	 	If a Member has pending a Redemption request for Class A Common Stock and
that Class A Common Stock is exchanged for Class B Common Stock by the Bank to meet
the Member’s Activity-Based Stock Purchase Requirement under Subsection 7(b), the
Redemption request is automatically cancelled for the amount of Class A Common Stock
exchanged. In such event, the Bank shall not impose a Redemption Cancellation Fee.
If such an Exchange comprises only a portion of a Member’s existing Redemption request
for Class A Common Stock, the Redemption period for that portion of the Member’s Class
A Common Stock that is not exchanged is determined by and continues to run from the
initial date the Redemption request was received by the Bank.

	 	f)	 	Cancellation of Stock Redemption Request or Request to Withdraw from
Membership. A Member may cancel all or a part of its request to redeem Class A Common
Stock or Class B Common Stock. A Member may also cancel its request to withdraw from
Membership. The cancellation of a Member’s request to withdraw from Membership shall
automatically constitute a cancellation of the Stock Redemption request for all of the
Member’s Class A Common Stock and Class B Common Stock. In the event of the cancellation
of all or a part of a Stock Redemption request, either through cancellation of a request
to redeem or through the cancellation of a Member’s request to withdraw from Membership,
unless otherwise waived under the provisions of this plan, the Member shall pay a
Redemption Cancellation Fee to the Bank with respect to those shares of Stock subject to
the Redemption cancellation in the following amount: one percent (1.0%) of the par value
of Class A Common Stock plus an amount of the par value of Class B Common Stock equal to,
depending on when the Redemption request is cancelled, one percent (1.0%) in the first
year after the Redemption request is received by the Bank, two percent (2.0%) in the
second year, three percent (3.0%) in the third year, four percent (4.0%) in the fourth
year and five percent (5.0%) in the fifth year. A Member’s Stock Redemption request shall
automatically be cancelled if, within five (5) Business Days from the end of the
applicable Redemption period, the Bank continues to be precluded from redeeming the
Member’s Stock because if the Redemption were to proceed the Member would fail to meet its
Minimum Stock Purchase Requirement after the Redemption. Such automatic cancellation of a
Redemption request shall have the same effect as a voluntary cancellation by the Member
and the applicable Redemption Cancellation Fee shall be imposed on the Member.

	 	g)	 	Involuntary Withdrawal. The Board may terminate the Membership of any Member
if, subject to regulations adopted by the Finance Agency, it determines that the Member
has:

	 	1)	 	failed to comply with any provision of the FHLBank Act, any regulation
promulgated under that Act, or this Plan; or

	 	2)	 	been determined to be insolvent or otherwise subject to the appointment of a
conservator, receiver or other legal custodian, by a Federal or State authority with
regulatory and supervisory responsibility for the Member; or

	 	3)	 	acted in a manner that jeopardizes the safety and soundness of the operation
of the Bank.

Notwithstanding any other provision of this Plan, in the event that (i) the Board has made
a determination under Subsection 13(g)(2) above with respect to a Member, (ii) the Board
has terminated such Member’s Membership, and (iii) such terminated Member has no
outstanding indebtedness or other obligation to the Bank, contingent or otherwise, then
such terminated Member’s Asset-Based Stock Purchase Requirement shall be zero and the Bank
may, in its discretion, repurchase any or all of the resulting excess Class A Common Stock
of such terminated Member at any time, notwithstanding any redemption period that would
apply to such Class A Common Stock, if the Bank will continue to meet its Regulatory
Capital Requirements after such repurchase.

h) Termination of Membership Resulting from Merger or Consolidation.

	 	1)	 	Upon merger or consolidation of two or more Members into one institution
operating under the charter of one of the merging or consolidating institutions, the
Membership of the surviving institution shall continue and the Membership of each
disappearing institution shall terminate on the cancellation of its charter.

	 	2)	 	Upon the merger or consolidation of two or more institutions, at least two of
which are Members of different FHLBanks, into one institution operating under the
charter of one of the merging or consolidating institutions, the Membership of the
surviving institution shall continue and the Membership of the disappearing
institution shall terminate on the cancellation of its charter, provided, however,
that if more than eighty percent (80.0%) of the assets of the merged or consolidated
institution are derived from the assets of the disappearing institution, then the
merged or consolidated institution shall continue to be a Member of the FHLBank of
which the disappearing institution was a Member prior to the merger or consolidation,
and the Membership of the other institutions shall terminate upon the effective date
of the merger or consolidation.

	 	3)	 	In the case of an institution the Membership of which has been terminated as
a result of a merger or other consolidation into a non-Member or into a Member of
another FHLBank, the applicable redemption periods for Class A Common Stock and Class
B Common Stock that is not subject to a pending Redemption request shall be deemed to
commence on the date on which the charter of the former Member is cancelled.

	 	i)	 	Other Provisions Governing Involuntary Termination of Membership.
Involuntary termination of Membership shall constitute a Redemption request for all of the
former Member’s Stock not otherwise subject to a prior Redemption request, and the
applicable redemption period for the former Member’s Stock shall begin to run from the
date the Board terminates the institution’s Membership. The former Member shall continue
to receive any dividends declared during the applicable redemption period, but shall not
be entitled to any other rights or privileges accorded to Members after the date of the
termination of Membership. The Bank will not redeem any of such former Member’s Class A
Common Stock or Class B Common Stock, consistent with the provisions of Section 13(a),
until such Stock is not required to fulfill the former Member’s Activity-Based Stock
Purchase Requirement.

	14)	 	Implementation of Plan.

	 	a)	 	Conversion Date. After Finance Agency approval of the Plan, the Board shall
establish a Conversion Date for the Plan. The Conversion Date shall be not later than
December 31, 2004. The Board shall establish such Conversion Date within ninety (90)
calendar days after Finance Agency approval of the Plan as amended, and the Bank shall
notify all Members of the Conversion Date within ten (10) Business Days after it has been
established by the Board.

	 	b)	 	Conversion of Shares. At the close of business on the Conversion Date, the
Bank shall immediately convert all shares of existing stock into shares of Class A Common
Stock or Class B Common Stock as provided in this paragraph. Each Member shall receive
one (1) share of Class A Common Stock or one (1) share of Class B Common Stock for each
share of existing stock held on the Conversion Date. The Bank first shall convert each
share of existing stock held by each Member into Class A Common Stock up to an amount
equal to the Member’s Asset-Based Stock Purchase Requirement. All additional shares of
existing stock, if any, held by the Member on the Conversion Date shall be converted into
Class B Common Stock. The Bank will reflect this conversion by appropriate book entries
and will notify each Member of its Minimum Stock Purchase Requirement. To the extent a
Member needs to purchase additional shares of Stock to comply with the Asset-Based Stock
Purchase Requirement and/or the Activity-Based Stock Purchase Requirement at the time of
conversion, the Member shall have ninety (90) calendar days to purchase the additional
Stock provided it had been a Member of the Bank on November 12, 1999 (Pre-1999 Member).
Any Member wishing to avail itself of this option must notify the Bank in writing at least
thirty (30) calendar days prior to the Conversion Date. All Members that became Members
after November 12, 1999 (Post-1999 Member), and any Member failing to properly exercise
the foregoing ninety (90) calendar day option if available to it, must purchase all
required Stock on the Conversion Date, and the Bank will purchase all such required Stock
on behalf of such Members by debiting each such Member’s demand deposit account on the
Conversion Date in amount equal to the par value of the Stock necessary to bring the
Member into compliance with the provisions of this Plan. On the next Business Day after
the Conversion Date, the Bank will notify each Member and former Member of its Minimum
Stock Purchase Requirement, including the amount of any shortfall in its current Stock
ownership that was purchased (in the case of Post-1999 Members), or is required to be
purchased (in the case of Pre-1999 Members), and the amount of Excess Stock, if any.
Notwithstanding the above, in the event a Pre-1999 Member at any time has a shortfall in
its Stock ownership below its Minimum Stock Purchase Requirement, the Member must, prior
to engaging in any activity with the Bank that has an Activity-Based Stock Purchase
Requirement under Subsection 7(b), purchase sufficient Stock to meet its Minimum Stock
Purchase Requirement.

	 	c)	 	Cancellation of Shares. After such conversion, the Bank shall cancel all
            shares of existing stock outstanding prior to the Conversion Date.

	 	d)	 	Opt Out. Any Member of the Bank may, in lieu of maintaining its Membership
pursuant to the terms of this Plan, notify the Finance Agency, with a copy to the Bank, in
writing at least thirty (30) calendar days prior to the Conversion Date of its desire to
withdraw from Membership. Provided such notice is given, the Bank shall, on the
Conversion Date, or prior thereto if the requisite notice period has expired prior to the
Conversion Date, terminate the Membership of any Member that provides such written notice
of withdrawal. In addition, any withdrawal from Membership shall be subject to applicable
laws, Finance Agency regulations, and other provisions of this Plan.

	 	e)	 	Members in the Process of Withdrawing from Membership. Any Member that files
its written notice to withdraw with the Finance Agency less than thirty (30) calendar
days prior to the Conversion Date, shall have its existing stock converted into Stock in
accordance with the Plan, and the effective date of withdrawal shall be established
pursuant to 12 C.F.R. 1263.26; provided, however, that the applicable Stock Redemption
periods calculated under such regulation shall commence on the date the Member first
submitted its written notice to withdraw to the Finance Agency.

	 	f)	 	Orderly Liquidation. Any former Member that has withdrawn from Membership on
or before the Conversion Date, but continues to hold stock to support Advances the Bank
has agreed to liquidate after the termination of Membership, shall have its shares of
existing stock converted into Class B Common Stock on the Conversion Date as described
above in Section 14(b), but thereafter need only comply with the Activity-Based Stock
Purchase Requirement for Advances. Any such former Member shall hold Class B Common Stock
sufficient to comply with the Activity-Based Stock Purchase Requirement during the period
of liquidation.

	 	g)	 	Failure to Opt Out. Any Member that fails to opt out by adhering to the
provisions of Section 14(d) above will automatically have its existing stock converted
into Class A Common Stock and/or Class B Common Stock as described above in Section 14(b).

	15)	 	Amendment of Plan. Any modifications to this Plan shall require an amendment to the
Plan by the Board and approval from the Finance Agency.

	16)	 	Basis for Implementation. The Bank has made a good faith determination that it will
be able to implement the Plan as submitted and that it will be in compliance with its
Regulatory Capital Requirements when the Plan is implemented. The Bank bases this
determination on the fact that it presented the basic provisions of this Plan to its Members
at ”Customer Appreciation Events” during the Summer and Fall of 2003 to which all Members were
invited to attend. In addition, the provisions of the Plan were presented in various private
discussions with the Bank’s five largest Members (in terms of product usage) during the Summer
and Fall of 2003. At none of these discussions or meetings has any Member raised any serious
objection to any provision of the Plan, nor has any Member indicated that adoption of the Plan
would result in that Member withdrawing from Membership in the Bank after the Plan is formally
adopted and put into effect.

	17)	 	Independent Accountant. Based on the review of PricewaterhouseCoopers, an
independent accounting firm, the Bank believes that the Plan ensures to the extent possible
that implementation of the Plan will not result in any write-down of the redeemable stock
owned by its Members. A copy of the review conducted by PricewaterhouseCoopers is attached to
this Plan and made a part hereof.

	18)	 	Rating Agency. Based on the review of Standard & Poor’s, an independent nationally
recognized statistical rating organization, the Bank believes that the Plan ensures to the
extent possible that implementation of the Plan will not have a material effect on its credit
rating. A copy of the Standard & Poor’s determination is attached to this Plan and made a
part hereof.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]