COLUMBIA GAS SYSTEM INC, S-3, 1995-11-22

COLUMBIA GAS SYSTEM INC
S-3, 1995-11-22
NATURAL GAS TRANSMISISON & DISTRIBUTION

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<PAGE> 1

As filed with the Securities and Exchange Commission on November 22, 1995

Registration No. 33-
------------------------
Trust Indenture Act File No. 22-
------------

===============================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

---------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

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

THE COLUMBIA GAS SYSTEM, INC.
(Exact name of registrant as specified in its charter)

Delaware 13-1594808
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

20 Montchanin Road
Wilmington, Delaware 19807
(302) 429-5000
(Address, including zip code and telephone number, including area code,
of registrant's principal executive office)

---------------------
L. J. BAINTER, TREASURER
THE COLUMBIA GAS SYSTEM, INC.
20 Montchanin Road
Wilmington, Delaware 19807
(302) 429-5597
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

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

COPIES TO:

Gregory M. Shaw, Esq. Keith L. Kearney, Esq.
Cravath, Swaine & Moore Davis, Polk & Wardwell
Worldwide Plaza 450 Lexington Avenue
825 Eighth Avenue New York, NY 10017
New York, NY 10019

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

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

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

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

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

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

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

If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box. /x/

<TABLE>
<CAPTION>
===============================================================================================================================
CALCULATION OF REGISTRATION FEE
===============================================================================================================================

Title of each Proposed maximum Proposed maximum Amount of
class of securities Amount to be offering pricing aggregate registration
to be registered registered(1) per unit(1)(2) offering fee
price(1)(2)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Debentures(3) ) ) ) )
Preferred Stock ) $1,000,000,000 ) 100% ) $1,000,000,000 ) $344,828
Common Stock ) ) ) )

(footnotes on following page)
===============================================================================================================================
</TABLE>

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.

================================================================================
<PAGE> 2
NOTES

(1) Not specified as to each class of Securities to be registered pursuant
to General Instruction II.D of Form S-3. In no event will the aggregate
initial offering price of the Securities issued under this Registration
Statement exceed $1,000,000,000. Securities registered hereby may be
sold separately, together or in units with other Securities registered
hereunder.

(2) Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(o). The proposed maximum offering price per unit
will be determined from time to time by the Registrant in connection
with the issuance by the Registrant of the Securities registered
hereunder.

(3) If any Debentures are issued at an original issue discount, then the
amount to be registered shall be equal to the initial offering prices
for such Debentures.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED NOVEMBER 22, 1995.

PROSPECTUS

THE COLUMBIA GAS SYSTEM, INC.

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

DEBENTURES
PREFERRED STOCK
COMMON STOCK

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

The Columbia Gas System, Inc. (the "Company") intends to issue, and
offer for sale, directly, through agents to be designated from time to time, or
through dealers or underwriters also to be designated, (i) one or more series
of its debentures (the "Debentures"), which will be unsecured senior
obligations of the Company, (ii) shares of one or more series of its preferred
stock, par value $10 (the "Preferred Stock") and (iii) shares of its common
stock, par value $10 ("Common Stock" and collectively with the Debentures and
Preferred Stock the "Securities"), all having an aggregate initial public
offering price of up to $1,000,000,000 and each of which Securities will be
offered to the public on terms to be determined at the time of sale. When a
particular offering of Securities is made, a supplement to this Prospectus (a
"Prospectus Supplement") will be delivered together with this Prospectus
setting forth with respect to each offering the following (or the method of
determination, thereof): (i) in the case of Debentures, the aggregate principal
amount offered, denomination, maturity, priority, rate of interest (which may
be fixed or variable), time and place of payment of interest, terms for
optional redemption or repayment by the Company or for sinking fund payments,
terms for any conversion or exchange into other securities, the initial public
offering price, any stock exchange listings, any provisions related to
Debentures issued as medium-term notes, original issue discount or other
special terms, and the designation of the trustee, security registrar and
paying agent, (ii) in the case of Preferred Stock, the specific title and
stated value, number of shares or fractional interests therein, any dividend,
liquidation, redemption, sinking fund, voting or other rights, the terms for
any conversion or exchange into other securities, any stock exchange listings
and the public offering price, (iii) in the case of Common Stock, the aggregate
number of shares offered, the public offering price, any stock exchange listing
and other terms thereof, and (iv) for all offerings of Securities, the
underwriter or underwriters or agent or agents, if any, for such offerings of
Securities, their compensation, the resulting net proceeds to the Company and
any other relevant terms and conditions. See also " Descriptions of
Securities" and "Plan of Distribution" herein.

This Prospectus may not be used to consummate sales of Securities
unless accompanied by a Prospectus Supplement.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

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

The date of this Prospectus is ______, 1995.

-1-
<PAGE> 4
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN
THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR ANY AGENT. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.

TABLE OF CONTENTS

<TABLE>
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . -2-
INCORPORATION OF DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . -2-
THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
RATIO OF EARNINGS TO FIXED CHARGES . . . . . . . . . . . . . . . . . -4-
DESCRIPTIONS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . -4-
CORPORATE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . -15-
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . -16-
LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
</TABLE>

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

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission ("SEC"). Such reports, proxy statements and other information filed
by the Company can be inspected and copied at the public reference facilities
of the SEC, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC
20549, as well as at the following SEC Regional Offices: 75 Park Place, New
York, NY 10007 and Kluczynski Federal Bldg., 230 S. Dearborn Street, Chicago,
IL 60604. Such material can also be inspected at the New York Stock Exchange,
20 Broad Street, New York, NY, 10005. Copies can be obtained from the SEC by
mail at prescribed rates. Requests should be directed to the SEC's Public
Reference Section, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549.

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

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents have been filed with the SEC and are
incorporated herein by reference: (1) the Company's Annual Report on Form
10-K for the year ended December 31, 1994; (2) the Company's Current Reports on
Form 8-K filed on February 2, 1995, February 10, 1995, February 15, 1995, March
16, 1995, April 17, 1995, April 18, 1995, April 20, 1995, May 1, 1995, June 16,
1995, June 19, 1995, July 18, 1995, July 19, 1995, July 28, 1995, October 18,
1995, October 20, 1995, October 25, 1995 and November 22, 1995; and (3) the
Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995,
June 30, 1995 and September 30, 1995.

All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of any offering of Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which also is, or is deemed to be, incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus. The Company will provide without charge to each person to
whom a copy of this Prospectus has been delivered, on the written or oral
request of any such person, a copy of any or all of the documents described
above which have been incorporated by reference in this Prospectus, other than
exhibits to such documents. Requests for copies of such documents should be
directed to The Columbia Gas System, Inc., Attention: Director, Investor
Relations, 20 Montchanin Road, Wilmington, DE 19807 - telephone (302) 429-5331
or (302) 429-5332.

-2-
<PAGE> 5
THE COMPANY

The Company operates one of the largest integrated natural gas
systems in the United States and was organized under the laws of the State of
Delaware on September 30, 1926. It is a registered holding company under the
Public Utility Holding Company Act of 1935 and derives substantially all its
revenues and earnings from the operating results of its 17 direct subsidiaries.
The Company owns all of the securities of its subsidiaries except for
approximately 8 percent of the stock in Columbia LNG Corporation. The
Company's subsidiaries are engaged in natural gas transmission, natural gas
distribution, exploration for and production of oil and natural gas, and other
energy operations.

On July 31, 1991, the Company and its wholly-owned subsidiary,
Columbia Gas Transmission Corporation ("Columbia Transmission"), filed separate
petitions for protection under Chapter 11 of the Federal Bankruptcy Code in the
U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court").
The Company and Columbia Transmission had operated under the protection of
Chapter 11 of the Federal Bankruptcy Code since their respective bankruptcy
filings on July 31, 1991. On November 15, 1995, the Bankruptcy Court confirmed
the Third Amended Plan of Reorganization of the Company dated July 27, 1995
("POR") and the Amended Plan of Reorganization of Columbia Transmission dated
July 17, 1995 (the "TCO POR") and emerged from their respective bankruptcy
proceedings. On November ____, 1995 the Company and Columbia Transmission
consummated the POR and TCO POR, respectively.

The Company's two interstate pipeline transmission companies,
Columbia Transmission and Columbia Gulf Transmission Company, operate a
23,300-mile pipeline network that extends from offshore in the Gulf of Mexico
to New York State and the eastern seaboard. In addition, Columbia Transmission
operates one of the nation's largest underground storage systems.

Five distribution subsidiaries provide natural gas service to more
than 1.9 million residential, commercial and industrial customers in Ohio,
Pennsylvania, Virginia, Kentucky, and Maryland. These subsidiaries purchase
gas supplies to serve their high-priority customers and transport gas for
industrial and commercial customers who purchase gas from other sources. The
distribution subsidiaries operate more than 29,700 miles of pipelines.

The Company's two oil and gas subsidiaries explore for, develop,
produce, and market oil and natural gas in the United States. These companies
hold interests in more than two million net acres of gas and oil leases and
have proved oil and gas reserves in excess of 757 billion cubic feet of gas
equivalent (Bcfe). In October 1995, the Company announced its intention to
sell Columbia Gas Development Corporation, its southwest oil and gas
exploration and production subsidiary representing approximately 200 Bcfe of
the above-referenced proved oil and gas reserves.

The Company has a subsidiary that manages the System's nonregulated
natural gas marketing efforts and provides an array of supply and fuel
management services to distribution companies, independent power producers and
other large end users both on and off the transmission and distribution
subsidiaries' pipeline systems.

The Company, through another subsidiary, participates in natural
gas-fueled cogeneration projects that produce both electricity and useful
thermal energy. In addition, the Company's two propane subsidiaries sell
propane at wholesale and retail to approximately 68,200 customers in eight
states. Another Company subsidiary owns over 500 million tons of coal
reserves, much of which contains less than one percent sulfur.

Columbia LNG Corporation is a participant in a partnership that
operates a natural gas peaking service at its LNG facility in Maryland.

Columbia Gas System Service Corporation provides centralized,
cost-efficient data processing, financial, accounting, legal, and other
services for the Company and other subsidiaries.

USE OF PROCEEDS

Unless otherwise provided in the applicable Prospectus Supplement,
the net proceeds from the issuance of the Securities will be used for general
corporate purposes, which may include distributions to producers and other
creditors whose claims have not been finally determined pursuant to the TCO
POR; to refund securities issued under the POR; and to finance working capital
requirements and capital expenditures.

-3-
<PAGE> 6
RATIO OF EARNINGS TO FIXED CHARGES

Both actual and adjusted ratio of earnings to fixed charges for the
Company for each of the twelve months ended September 30, 1995 and September
30, 1994 and for each of the five years ended December 31, are as follows:

<TABLE>
<CAPTION>
12 Months Ended September 30, Year Ended December 31,
------------------------------ -----------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- ----------- ----- ------ ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Actual 18.38 20.96 27.44 3.84 12.77 N/A* 1.85
Adjusted 1.40 1.70 1.59 1.21 0.75 N/A* 1.85
</TABLE>

* To achieve a one-to-one coverage, the Company would need an
additional $1,211.6 million and $1,306.4 million of actual and
adjusted earnings, respectively.

The actual ratio of earnings to fixed charges was calculated based
on information from the Company's books and records. In computing the ratio of
earnings to fixed charges, earnings consist of net earnings of the Company and
its consolidated subsidiaries plus taxes on income and fixed charges, plus
dividends received from non-consolidated associated companies accounted for by
the equity method, less interest capitalized net of amount amortized and less
equity earnings of non-consolidated associated companies accounted for by the
equity method. There were no preferred shares outstanding during any of the
periods indicated and therefore the ratio of earnings to combined fixed charges
and preferred share dividend requirements would have been the same as the ratio
of earnings to fixed charges for each period indicated.

Adjusted earnings to fixed charges ratios reflect an increase to
fixed charges for an estimate of interest expense not recorded during
bankruptcy in order to provide more meaningful ratios. Earnings for all
periods except the twelve months ended December 31, 1990 included interest
earned on cash accumulated during bankruptcy and other bankruptcy related
non-recurring items.

DESCRIPTIONS OF SECURITIES

DEBENTURES

The Debentures are to be issued under an Indenture (the
"Indenture"), dated as of November ___, 1995, between the Company and Marine
Midland Bank, as Trustee (the "Trustee"). The following summary statements
with respect to the Debentures do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, the detailed
provisions of the Indenture, the form of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. Capitalized terms
are defined in the Indenture unless otherwise defined herein. Whenever any
particular section of the Indenture or any term defined therein is referred to,
such section or definition is incorporated herein by reference.

General

The Debentures offered hereby will be limited to an aggregate
initial offering price not to exceed U.S. $1,000,000,000. The Indenture does
not limit the amount of Debentures which can be issued thereunder and provides
that additional Debentures may be issued in one or more series up to the
aggregate principal amount which may be authorized from time to time by the
Company's Board of Directors. The Debentures will be unsecured senior
obligations of the Company and will rank equally and ratably with all other
unsecured unsubordinated indebtedness of the Company.

-4-
<PAGE> 7
Reference is made to the Prospectus Supplement relating to the
particular Debentures offered thereby for the following terms, where
applicable, of the Debentures: (i) the specific designation of the Debentures;
(ii) the denominations in which such Debentures are authorized to be issued;
(iii) the aggregate principal amount of such Debentures ; (iv) the date or
dates on which the principal of such Debentures will mature or the method of
determining such date or dates; (v) the price or prices (expressed as a
percentage of the aggregate principal amount thereof) at which the Debentures
will be issued; (vi) the rate or rates (which may be fixed or variable) at
which such Debentures will bear interest, if any, or the method of calculating
such rate or rates; (vii) the times and places where principal of, premium, if
any, and interest, if any, on such Debentures will be payable; (viii) the date,
if any, after which such Debentures may be redeemed and the redemption prices;
(ix) the date or dates on which interest, if any, will be payable and the
record date or dates therefor or the method by which such date or dates will be
determined; (x) the period or periods within which, the price or prices at
which, and the terms and conditions upon which, such Debentures may be
redeemed, in whole or in part, at the option of the Company; (xi) the
obligations, if any, of the Company to redeem or purchase such Debentures
pursuant to any sinking fund or analogous provisions, upon the happening of a
specified event or at the option of a holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions upon
which, such Debentures will be redeemed or purchased, in whole or in part,
pursuant to such obligations; (xii) if other than the principal amount hereof,
the portion of the principal amount of such Debentures which will be payable
upon declaration of the acceleration of the maturity thereof or the method by
which such portion shall be determined; (xiii) the person to whom any interest
on any such Debenture will be payable if other than the person in whose name
such Debenture is registered on the applicable record date; (xiv) any addition
to, or modification or deletion of, any Event of Default or any covenant of the
Company specified in the Indenture with respect to such Debentures; (xv) the
application, if any, of such means of defeasance or covenant defeasance as may
be specified for such Debentures; (xvi) whether such Debentures are to be
issued in whole or in part in the form of one or more temporary or permanent
global securities and, if so, the identity of the depositary for such global
security or securities; and (xvii) any other special terms pertaining to such
Debentures. Unless otherwise specified in the applicable Prospectus Supplement,
the Debentures will not be listed on any securities exchange.

Unless otherwise provided in the applicable Prospectus Supplement,
principal and premium, if any, or interest, if any, will be payable and the
Debentures may be surrendered for payment or transferred at the offices of the
Trustee as paying and authenticating agent, provided that payment of interest
on registered Debentures may be made at the option of the Company by check
mailed to the address of the person entitled thereto as it appears in the
Debenture register.

Unless otherwise specified in the applicable Prospectus Supplement,
the Debentures will be issued in fully registered form without coupons in
denominations set forth in the Prospectus Supplement. No service charge will
be made for any transfer or exchange of such Debentures, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

Some of the Debentures may be issued at a discount (bearing no
interest or interest at below market rates) ("Original Issue Discount
Securities") to be sold at a substantial discount below their stated principal
amount. Federal income tax consequences and other special considerations
applicable to any such Original Issue Discount Securities will be described in
the applicable Prospectus Supplement.

-5-
<PAGE> 8
Restrictive Covenants

Definitions

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

"Bankruptcy Law" means Title 11, United States Code, or any similar
Federal or state law for the relief of debtors.

"Consolidated Net Tangible Assets" means the sum of the Net Tangible
Assets of the Company and its consolidated Subsidiaries after
eliminating intercompany items.

"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.

"Debt" of any person means, without duplication,

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

(ii) all capital lease obligations of such person;

(iii) all obligations of such person issued or assumed as
the deferred purchase price of property (but excluding
trade accounts payable arising in the ordinary course of
business);

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

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

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

"Funded Debt" means all Debt of a Significant Subsidiary which
matures by its terms, or is renewable by such Subsidiary to a date,
more than one year after the date of its original creation.

-6-
<PAGE> 9
"Lien" means any mortgage, pledge, deposit for security, security
interest or other similar lien, other than the following: (i) liens
for taxes or assessments or other local, state or federal
governmental charges or levies; (ii) any lien to secure obligations
under workmen's compensation or unemployment insurance laws or
similar legislation; (iii) any lien to secure performance in
connection with bids, tenders, contracts (other than contracts for
the payment of Debt) or leases (other than capital lease
obligations) made in the ordinary course of business by the Company
or any Affiliate thereof; (iv) liens to secure public or statutory
obligations; (v) materialmen's, mechanics', carriers', workmen's,
repairmen's, construction, or other liens or charges arising in the
ordinary course of business; or deposits to obtain the release of
such liens; (vi) any lien to secure indemnity, performance, surety
or similar bonds to which the Company or any affiliate of the
Company is a party; (vii) liens created by or resulting from court
or administrative proceedings which are currently being contested in
good faith by appropriate actions or proceedings or for the purpose
of obtaining a stay or discharge in the course of any court or legal
proceedings for which appropriate accounting reserves have been made
to the extent required by generally accepted accounting principles;
(viii) leases (other than capital lease obligations) made, or
existing on property acquired, constructed or improved, in the
ordinary course of business, together with repairs and additions
thereto and improvements thereof; (ix) landlords' liens; (x) zoning
restrictions, easements, licenses, reservations or restrictions in
respect of currently owned or hereafter acquired, constructed, or
improved tangible property or defects or irregularities (including
any terms, conditions, agreements, covenants, exceptions and
reservations expressed or provided in deeds or other agreements) in
title thereto, which do not materially impair the conduct of the
business of the Company; (xi) any of such liens described in clauses
(i) through (x),whether or not delinquent, whose validity or
applicability is at the time being contested in good faith by
appropriate actions or proceedings of the Company or any Subsidiary
and for which appropriate accounting reserves have been made to the
extent required by generally accepted accounting principles; (xii)
liens securing obligations neither assumed by the Company or any
Subsidiary nor on account of which any of them customarily pays
interest directly or indirectly, existing, either at the date
hereof, or, as to property hereafter acquired, constructed, or
improved at the time of acquisition, construction or improvement by
the Company or a Subsidiary; (xiii) any right which any municipal or
governmental body or agency may have by virtue of any franchise,
license, contract or statute to purchase, or designate a purchaser
of or order the sale of, any property of the Company or any
Subsidiary upon payment of reasonable compensation therefor, or to
terminate any franchise, license or other rights or to regulate the
property and business of the Company or any Subsidiary; (xiv) the
lien of judgments covered by insurance, or upon appeal and covered,
if necessary, by the filing of an appeal bond, or if not so covered,
not exceeding at any one time $10,000,000 in aggregate amount; (xv)
any lien or encumbrance, moneys sufficient for the discharge of
which have been deposited in trust with the Trustee hereunder or
with the trustee or mortgagee under the instrument evidencing such
lien or encumbrance, with irrevocable authority to the Trustee
hereunder or to such other trustee or mortgagee to apply such moneys
to the discharge of such lien or encumbrance to the extent required
for such purpose; (xvi) rights reserved to or vested in others to
take or receive any part of the gas, by-products of gas or steam or
electricity generated or produced by or from any properties of the
Company or any Subsidiary or with respect to any other rights
concerning supply, transportation, or storage of a commodity which
is used in the ordinary course of business; and (xvii) liens created
or assumed by the Company or a Subsidiary in connection with the
issuance of debt securities, the interest on which is excludable
from the gross income of the holders of such securities pursuant to
Section 103 of the Internal Revenue Code of 1986, or any successor
section.

"Net Tangible Assets" as applied to any person on any date shall
mean the gross book value as shown on the books of such person of
all its property both real and personal (exclusive of licenses,
patents,

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<PAGE> 10
patent applications, copyrights, trademarks, trade names, goodwill,
experimental or organizational expense and other like intangibles,
treasury stock and unamortized debt discount and expense but
including regulatory assets properly recorded on the balance sheet),
less all reserves for depreciation, obsolescence, depletion and
amortization of its properties as shown by the books and all other
proper reserves which in accordance with generally accepted
accounting principles should be provided in connection with the
business conducted.

"Preferred Stock" as applied to the capital stock of any
corporation, means stock of any class or classes (however
designated) (a) which is preferred as to the payment of dividends,
or as to the distribution of assets on any voluntary or involuntary
liquidation or dissolution of such corporation, over shares of any
other stock of any class of such corporation or (b) which contains
provisions requiring the mandatory redemption of such stock or the
mandatory payment of dividends thereon or which permit the holders
of such stock to put such stock to the issuer thereof.

"Secured Debt" means Debt secured by a Lien.

"Significant Subsidiary" means a Subsidiary that meets the
conditions for being classified as a "significant subsidiary" under
Regulation S-X of the SEC.

"Subsidiary" means a corporation or limited liability corporation of
which a majority of the capital stock, having voting power under
ordinary circumstances to elect directors, is owned by the Company
and/or one or more Subsidiaries of the Company.

Limitation on Secured Debt (Section 3.03)

The Company has covenanted that it will not issue any
Secured Debt after the date of the Indenture without making effective provision
to ratably secure the Debentures of all series issued and outstanding pursuant
to the Indenture. The preceding sentence does not require the Company to
ratably secure the Debentures upon the issuance of the following Secured Debt:

(1) Debt of the Company which is incurred to finance the
acquisition, construction or improvement of assets of the Company
and its Subsidiaries, which acquisition is consummated, or which
construction or improvement is commenced, after the date of this
Indenture; provided, however, that such Debt shall not be secured by
any assets of the Company other than assets so acquired, constructed
or improved (together with (i) to the extent the terms of Secured
Debt so provide, repairs and additions thereto and improvements
thereof, and (ii) with respect to construction and improvement, any
theretofore unimproved real property on which the property so
constructed or improved is located);

(2) Debt of the Company which is secured by assets of a
person where such Debt was existing at the time such person was
merged or consolidated with the Company or at the time of sale,
other disposition, or lease of the properties of such person as an
entirety (or substantially as an entirety) to the Company; provided,
however, that such Debt shall not be secured by any assets of the
Company other than the assets subject thereto at the time of the
acquisition (together with, to the extent the terms of Secured Debt
so provides, repairs and additions thereto and improvements
thereof);

(3) Debt of the Company issued to refinance such Debt
incurred under paragraphs (1) and (2) provided that the Debt so
issued is not secured by a Lien on assets other than those which
secure the Debt being refinanced (together with, to the extent the
terms of new Secured Debt so provides, repairs and additions thereto
and improvements thereof);

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<PAGE> 11
(4) Debt of the Company which is secured by inventory,
accounts receivable, or customers' installment paper, or the
proceeds thereof, including by means of asset securitization;

(5) Obligations arising with respect to production
payments; and

(6) Other Debt which does not exceed, in an aggregate
principal amount at any one time outstanding, ten percent (10%) of
the Consolidated Net Tangible Assets of the Company and its
consolidated Subsidiaries, determined as of the end of the most
recent fiscal quarter of the Company ending not less than 45 days
from the date of determination.

Limitations on Funded Debt or Preferred Stock of Significant Subsidiaries
(Section 3.04)

The Company shall not permit any Significant Subsidiary to issue,
directly or indirectly, any Funded Debt or Preferred Stock except:

(1) Funded Debt and Preferred Stock issued and
outstanding on or prior to the date of the Indenture;

(2) Funded Debt and Preferred Stock issued to and held by
the Company or a Subsidiary; provided, however, that any subsequent
issuance or transfer of any common stock which results in any such
Subsidiary ceasing to be a Subsidiary and any subsequent transfer of
such Debt or Preferred Stock (other than to the Company or a
Subsidiary) shall be deemed the issuance of such Debt by the issuer
thereof;

(3) Funded Debt and Preferred Stock of a Significant
Subsidiary issued and outstanding on or prior to the date on which
such Significant Subsidiary was acquired by the Company or on which
it became a Significant Subsidiary;

(4) Funded Debt and Preferred Stock issued to finance the
acquisition by such Significant Subsidiary of any assets or capital
stock of any person or the construction or improvement of assets of
such Significant Subsidiary, which acquisition is consummated, or
which construction or improvement is commenced, after the date of
the Indenture;

(5) Funded Debt and Preferred Stock issued in exchange
for, or the proceeds of which are used to refund or refinance, Debt
or Preferred Stock referred to in the foregoing clauses (1) through
(4) or to reacquire equity or debt or to repay debt of such
Significant Subsidiary held by the Company or a Subsidiary;

(6) Funded Debt issued with respect to (a) obligations
that are tax-exempt pursuant to Section 103 of the Internal Revenue
Code of 1986 as from time to time amended and that are issued in
connection with pollution control or other facilities of such
Significant Subsidiary or (b) other obligations, whether taxable or
tax-exempt, that are issued through any public or governmental
authority in connection with pollution control or other facilities
of such Significant Subsidiary;

(7) Funded Debt in an aggregate amount not exceeding the
sum of (a) total inventory of the Significant Subsidiary; (b) total
accounts receivable of the Significant Subsidiary; and (c) the total
amount of customers' installment paper of such Significant
Subsidiary, determined in accordance with generally accepted
accounting principles, in each case, as of the end of the most
recent fiscal quarter of such Significant Subsidiary ending not less
than 45 days from the date of determination;

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<PAGE> 12
(8) Obligations with respect to production payments; and

(9) Funded Debt in an aggregate principal amount and
Preferred Stock having an aggregate preferential involuntary
liquidation value, in either case which, when added to the aggregate
principal amount of Funded Debt of all other Significant
Subsidiaries (other than Funded Debt referred to in clauses (1)
through (8) above) and when added to the aggregate preferential
involuntary liquidation value of Preferred Stock (other than
Preferred Stock referred to in clauses (1) through (5) above), does
not exceed, at any one time outstanding, ten percent (10%) of the
sum of the Net Tangible Assets of such Significant Subsidiary and
all other Significant Subsidiaries determined on a consolidated
basis, as of the end of the most recent fiscal quarter of each such
Significant Subsidiary ending not less than 45 days from the date of
determination.

Consolidation, Merger and Sale of Assets (Section 4.01)

The Company may not consolidate or merge with or into, or transfer
or lease all or substantially all its assets to, any person, unless (i) the
person (if other than the Company) formed by such consolidation or into which
the Company is merged or which acquires or leases all or substantially all the
assets of the Company is organized and existing under the laws of the United
States, any state thereof or the District of Columbia and expressly assumes all
of the Company's obligations under the Debentures and under the Indenture; (ii)
immediately after giving effect to such transaction no Event of Default shall
have happened and be continuing; and (iii) certain other conditions are met.

Secured Debt of Columbia Transmission (Indenture Supplements with Respect to
POR Debentures)

Indenture Supplements to the Debentures issued pursuant to the POR
contain a covenant requiring the Company, for the four-year period following
its emergence from bankruptcy, to either hold $600 million of Columbia
Transmission Secured Debt or retire (by the means prescribed by the covenant)
Company funded debt in an amount equal to 150% of the amount by which $600
million exceeds the amount of Columbia Transmission Secured Debt held by the
Company.

Events of Default (Section 5.01)

The following are Events of Default with respect to
Debentures:

(1) default in any payment of interest on any Debenture
when the same becomes due and payable and such default
continues for a period of 20 days;

(2) default in the payment of the principal of any
Debenture when the same becomes due and payable at its
stated maturity, upon declaration or otherwise;

(3) failure to comply with the Indenture provisions
relating to the merger, consolidation or transfer of
assets;

(4) failure to comply with any of its agreements in the
Debentures or Indenture (other than those referred to in
(1), (2), or (3) above) and such failure continues for 60
days after the notice specified below;

(5) the Company has entered against it final,
non-appealable court judgments for the payment of money
exceeding in the aggregate $50,000,000 in uninsured
liability and such judgments are not

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<PAGE> 13
discharged, paid or adequately provided for within 60 days
after the last of such judgments become final and
non-appealable;

(6) the Company pursuant to or within the meaning of any
Bankruptcy Law: (a) commences a voluntary case; (b)
consents to the entry of an order for relief against it in
an involuntary case; (c) consents to the appointment of a
custodian of it or for any substantial part of its
property; or (d) makes a general assignment for the
benefit of its creditors (collectively, a "Bankruptcy
Default"); or

(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (a) is for relief
against the Company in an involuntary case; (b) appoints a
Custodian of the Company or for any substantial part of
its property; or (c) orders the winding up or liquidation
of the Company; and the order or decree remains unstayed
and in effect for 60 days.

A default of the type described in clause (4) above is not
an Event of Default until the Trustee or the holders of at least 25% in
principal amount of the Debentures notify the Company of the default and the
Company does not cure the default within the time specified in clause (4) after
receipt of such notice.

Acceleration of Maturity (Section 5.02)

If an Event of Default with respect to Debentures occurs
and is continuing, then, and in each and every such case, unless the principal
of all of the Debentures shall have already become due and payable, either the
Trustee or the holders of not less than 25% in principal amount of the
Debentures, by notice in writing to the Company (and to the Trustee if given by
holders), may declare the entire principal amount (or, if the Debentures of
such lesser series are Original Issue Discount Securities, such portion of the
principal as may be specified in the terms of such Original Issue Discount
Securities) of all of the Debentures and any premium and interest accrued
thereof to be due and payable immediately, and upon any such declaration such
principal amount (or specified amount) and any premium and interest accrued
thereon shall become immediately due and payable. If an Event of Default
specified previously in clause (6) or (7) under the caption "Descriptions of
Securities; Debentures - Events of Default" ("Bankruptcy Defaults") occurs and
is continuing, the principal of and interest on all the Debentures shall ipso
facto become and be immediately due and payable without any declaration or
other act.

However, at any time after a declaration of acceleration
with respect to Debentures has been made, but before a judgment or decree based
on such acceleration has been obtained, the holders of a majority in principal
amount of the Debentures may, under certain circumstances, rescind and annul
such acceleration.

Reference is made to the Prospectus Supplement relating to
each series of Debentures which are Original Issue Discount Securities for the
particular provision relating to acceleration of the maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.

Waiver and Modification (Section 5.04 and 8.02)

The holders of a majority in principal amount of
Debentures may waive any past default under the Indenture with respect to
Debentures, except a default not theretofore cured in the payment of the
principal of or interest on any Debentures or in respect of any provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each Debenture affected. (Section 5.04).

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<PAGE> 14
The Indenture contains provisions permitting the Company
and the Trustee to enter into one or more supplemental indentures without the
consent of the holders of any of the Debentures in order (i) to cure any
ambiguity, omission, defect or inconsistency; (ii) to evidence the succession
of another corporation to the Company and the assumption of the covenants of
the Company by a successor to the Company; (iii) to provide for uncertificated
Debentures in addition to or in place of certificated Debentures; (iv) to
comply with requirements of the SEC in connection with qualifying the Indenture
under the Trust Indenture Act of 1939, as amended; (v) to add to the covenants
of the Company for the benefit of holders of Debentures or to surrender any
right or power of the Company; or (vi) to make any change that does not
adversely affect the interests of any holder of Debentures in any material
respect. (Section 8.01).

Modifications and amendments of the Indenture may be made
by the Company and the Trustee with the consent of the holders of a majority in
principal amount of the Debentures outstanding; provided, however, that no such
modification or amendment may, without the consent of the holder of each
Debenture affected thereby, (i) reduce the principal amount of Debentures whose
holders must consent to an amendment; (ii) reduce the rate of or extend the
time for payment of interest on any Debenture; (iii) reduce the principal of or
extend the fixed maturity of any Debenture; (iv) reduce the premium payable
upon the redemption of any Debenture or change the time at which any Debenture
may or shall be redeemed; (v) make any Debenture payable in money other than
that stated in the Debenture; or (vi) reduce the percentage in principal amount
of Debentures, the consent of the holders of which is required for modification
or amendment of the Indenture or for waiver of certain defaults; and, provided
further, that in case more than one series of Debentures (or Debentures of a
single series which have different terms) are outstanding under the Indenture,
any such proposed amendment affects the rights of holders of Debentures of one
or more series (or Debentures of a single series which have different terms)
and does not affect the rights of holders of the Debentures of one or more of
the other series (or Debentures of a single series which have different terms),
then only holders of Debentures to be affected shall have authority or be
required to consent to or approve such amendment. Any waiver of a default is
deemed to affect the Debentures of all series, and any modification of the
provisions of any sinking fund or covenant established in respect Debentures of
a particular series (or Debentures of a single series having the same terms)
are deemed to affect only such Debentures. (Section 8.02)

Satisfaction, Discharge, and Defeasance Prior to Maturity or Redemption
(Sections 7.01 and 7.02)

The Company may, at any time, terminate (i) all its obligations
under the Indenture with respect to the Debentures of a series (such
termination by the Company, a "Legal Defeasance ") or (ii) its obligations to
comply with certain restrictive covenants ("Covenant Defeasance") with respect
to the Debentures of a series, provided that the Company irrevocably deposits
in trust with the Trustee money or U.S. Government obligations for the payment
of principal of and interest on the Debentures of the series to be defeased to
maturity or redemption, as the case may be. The conditions to Legal Defeasance
or Covenant Defeasance shall be that (i) no default exists or occurs, (ii) the
Company obtains a certificate from a firm of nationally recognized independent
accountants that the deposited U.S. Government obligations will be sufficient
to pay principal of and interest on the Debentures to be defeased when due and
(iii) in the case of Legal Defeasance, 91 days pass after the deposit is made
and no Bankruptcy Default with respect to the Company is continuing at the end
of the 91-day period.

Federal Income Tax Consequences Related to Defeasance

Under current Federal income tax law, a Covenant Defeasance as
described above will not result in a taxable event to any holder of Debentures
or otherwise affect the Federal income tax consequence of an investment in
Debentures.

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<PAGE> 15
The Federal income tax treatment of a Legal Defeasance as described
above is not clear. A Legal Defeasance may be treated as a taxable exchange of
such Debentures for beneficial interests in the trust consisting of the
securities. In that event, a holder of Debentures would be required to
recognize gain or loss equal to the difference between the holder's adjusted
basis for the Debentures and the fair market value of the holder's beneficial
interest in such trust. Thereafter, such holder would be required to include
in income a share of the income, gain, and loss of the trust. Purchasers of
the Debentures should consult their own advisors with respect to the tax
consequences to them of such Legal Defeasance, including the applicability and
effect of tax laws other than Federal income tax law.

PREFERRED STOCK

The following summary contains a description of certain general
terms of the Company's Preferred Stock to which any Prospectus Supplement may
relate. Certain terms of any series of Preferred Stock that may be offered by
any Prospectus Supplement will be described in the Prospectus Supplement
relating thereto. If so indicated in the Prospectus Supplement, the terms of
any series may differ from the terms set forth below. The description of
certain provisions of the Company's Preferred Stock does not purport to be
complete and is subject to and qualified in its entirety by reference to the
provisions of the Company's Restated Certificate of Incorporation, as amended
(the "Certificate of Incorporation"), and the Certificate of Designation (the
"Certificate of Designation") relating to each particular series of Preferred
Stock which will be filed by amendment or incorporated by reference, as the
case may be, as an exhibit to the Registration Statement of which this
Prospectus is a part at or prior to the time of the issuance of such Preferred
Stock.

General

Under the Certificate of Incorporation, the Board of Directors of
the Company is authorized, without further stockholder action to provide for
the issuance of up to 40,000,000 shares of Preferred Stock, of which ____
shares of ____% Preferred Stock, Series A, with a liquidation value of $25 per
share (the "____% Preferred Stock") and ____ shares of ____% Convertible
Preferred Stock, Series B, with a liquidation value of $____ per share were
issued and outstanding as of November ____, 1995.

Additional Preferred Stock may be issued in one or more series, with
such designations or titles; dividend rates; any redemption provisions; special
or relative rights in the event of liquidation, dissolution, distribution or
winding up of the Company; any sinking fund provisions; any conversion
provisions; any voting rights; and any other preferences, privileges, powers,
rights, qualifications, limitations and restrictions, as shall be set forth as
and when established by the Board of Directors of the Company. The shares of
any series of Preferred Stock will be, when issued, fully paid and
non-assessable and holders thereof will have no preemptive rights in connection
therewith.

The liquidation preference of any series of Preferred Stock is not
necessarily indicative of the price at which shares of such series of Preferred
Stock will actually trade at or after the time of their issuance. The market
price of any series of Preferred Stock can be expected to fluctuate with
changes in market and economic conditions, the financial condition and
prospects of the Company and other factors that generally influence the market
price of securities.

Rank

Any series of Preferred Stock will, with respect to rights on
liquidation, winding up and dissolution, rank (i) senior to Common Stock and to
all other equity securities issued by the Company, the terms of which
specifically provide that such equity securities will rank junior to such
series of Preferred Stock (the "Junior Liquidation Securities"); (ii) on a
parity with all equity securities issued by the Company, the terms of which
specifically provide that such equity securities will rank on a parity with
such series of Preferred Stock ("Parity

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<PAGE> 16
Liquidation Securities"); and (iii) junior to all equity securities issued by
the Company, the terms of which specifically provide that such equity
securities will rank senior to such series of Preferred Stock (the "Senior
Liquidation Securities"). In addition, any series of Preferred Stock will,
with respect to dividend rights, rank (i) senior to all equity securities
issued by the Company, the terms of which specifically provide that such equity
securities will rank junior to such series of Preferred Stock and, to the
extent provided in the applicable Certificate of Designation, to Common Stock;
(ii) on a parity with all equity securities issued by the Company, the terms of
which specifically provide that such equity securities will rank on a parity
with such series of Preferred Stock and, to the extent provided in the
applicable Certificate of Designation, to Common Stock ("Parity Dividend
Securities"); and (iii) junior to all equity securities issued by the Company,
the terms of which specifically provide that such equity securities will rank
senior to such series of Preferred Stock. As used in any Certificate of
Designation for these purposes, the term "equity securities" will not include
debt securities convertible into or exchangeable for equity securities.

Dividends

Holders of each series of Preferred Stock will be entitled to
receive, when, as and if declared by the Board of Directors of the Company out
of funds legally available therefor, cash dividends at such rates and on such
dates as are set forth in the Prospectus Supplement relating to such series of
Preferred Stock. Dividends will be payable to holders of record of Preferred
Stock as they appear on the books of the Company on such record dates as shall
be fixed by the Board of Directors. Dividends on any series of Preferred Stock
may be cumulative or non-cumulative.

No full dividends may be declared or paid out of funds set apart for
the payment of dividends on any series of Preferred Stock unless dividends
shall have been paid or set apart for such payment on any senior series of
Preferred Stock or on any Parity Dividend Securities. If full dividends are
not so paid, such series of Preferred Stock shall be subordinated to payment of
dividends on any senior series and shall share dividends pro rata with any
Parity Dividend Securities.

Conversion and Exchange

The Prospectus Supplement for any series of Preferred Stock will
state the terms, if any, on which shares of that series are convertible into
other securities, including shares of another series of Preferred Stock or
Common Stock or exchangeable for another series of Preferred Stock, Common
Stock or Debentures of the Company. The Common Stock of the Company is
described below under "Common Stock".

Liquidation Preference

Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company, holders of each series of Preferred Stock that ranks
senior to the Junior Liquidation Securities will be entitled to receive out of
assets of the Company available for distribution to shareholders, before any
distribution is made on any Junior Liquidation Securities, including Common
Stock, distributions upon liquidation in the amount set forth in the Prospectus
Supplement relating to each such series of Preferred Stock. If the holders of
the Preferred Stock of any series and any other Parity Liquidation Securities
are not paid in full, the holders of the Preferred Stock of such series and the
Parity Liquidation Securities will share ratably in any such distribution of
assets of the Company in proportion to the full liquidation preferences to
which each is entitled. After payment of the full amount of the liquidation
preference to which they are entitled, the holders of such series of Preferred
Stock will not be entitled to any further participation in any distribution of
assets of the Company.

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<PAGE> 17
Voting Rights

Except as indicated in the Prospectus Supplement relating to a
particular series of Preferred Stock or except as expressly required by
applicable law or the Certificate of Incorporation, the holders of shares of
Preferred Stock will have no voting rights.

Reissuance

Preferred Stock redeemed or otherwise acquired by the Company will
assume the status of authorized but unissued Preferred Stock and may thereafter
be reissued in the same manner as other authorized but unissued Preferred
Stock.

COMMON STOCK

The Company has authorized 100,000,000 shares of Common Stock, $10
par value, of which 50,575,835 shares were issued and outstanding as of
September 30, 1995. The shares of Common Stock currently outstanding are, and
the shares of Common Stock that may be offered hereby will be, fully paid and
nonassessable.

Subject to the rights of the holders of any preferred stock then
outstanding, holders of Common Stock are entitled to one vote per share on all
matters to be voted on by stockholders of the Company, other than the election
of directors. Voting for directors is cumulative; each stockholder has votes
equal to the number of shares of Common Stock the stockholder owns multiplied
by the number of directors to be elected and all votes can be cast for one
nominee or divided among more than one.

Subject to the rights of the holders of Preferred Stock, holders of
Common Stock are entitled to receive such dividends, if any, as may be declared
from time to time by the Board of Directors of the Company in its discretion
out of funds legally available therefor. Upon any liquidation or dissolution
of the Company, holders of the Common Stock are entitled to receive pro rata
all assets remaining available for distribution to stockholders after payment
of all liabilities and provision for the liquidation of any shares of any
Preferred Stock at the time outstanding. The Common Stock has no preemptive or
other subscription rights, and there are no conversion rights or redemption or
sinking fund provisions with respect to such stock.

CORPORATE PROVISIONS

RESTATED CERTIFICATE OF INCORPORATION

The Certificate of Incorporation was amended and restated pursuant
to the POR and provides for, among other things: (i) the classification of the
Board of Directors; (ii) a prohibition on the removal of directors except for
cause and then only with a vote of 80% of shares outstanding; and (iii)
stockholder action only to be conducted at a duly called annual or special
meeting of stockholders and not effected by written consent. The Certificate
of Incorporation also provides that, except as otherwise required by law and
subject to the rights of holders of Preferred Stock, special meetings of
stockholders of the Company may be called only by the Board of Directors
pursuant to a resolution adopted by a majority of the total number of
authorized members of the Board of Directors. The article also contains
certain super-majority voting requirements with respect to filing director
vacancies and amending certain provisions.

The Certificate of Incorporation requires the Company to indemnify
its directors and officers and certain other persons serving at the request of
the Company to the fullest extent permitted by Delaware law and to advance
litigation expenses and to maintain director and officer liability insurance.
Article V of the

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Certificate of Incorporation also limits or eliminates the personal monetary
liability of directors and officers for breaches of fiduciary duty to the
fullest extent permitted by Delaware law.

The Company, as a Delaware corporation, is subject to Section 203 of
the Delaware General Corporation Law. Section 203 discourages efforts by
others to acquire control of the Company through acquisitions of stock or
otherwise, unless the transactions are approved by the Board of Directors. It
provides that, with certain exceptions, a person who acquires 15% or more of a
Company's voting stock (thereby becoming an "interested stockholder") without
board approval may not, for three years thereafter, engage in a wide range of
business combinations with that corporation unless (i) upon consummation of the
transaction the interested stockholder owned at least 85% of the corporation's
voting stock; or (ii) the business combination is approved by the board of
directors and authorized by the affirmative vote of at least 66 2/3% of the
outstanding voting stock not owned by the interested stockholder.

As a holding company registered under the Public Utility Holding
Company Act of 1935 (the "Act"), the Company must obtain the approval by the
U.S. Securities and Exchange Commission with respect to the terms of business
combinations or divestitures involving the stock and assets of the Company or
its regulated subsidiaries. However, several measures have been recently
introduced in Congress to repeal or reduce the scope of the Act.

PLAN OF DISTRIBUTION

The Company may sell the Securities being offered hereby in four
ways: (i) directly to purchasers, (ii) through agents, (iii) through
underwriters and (iv) through dealers.

Offers to purchase Securities may be solicited by the Company and
sales thereof may be made by the Company directly to institutional investors or
others. The terms of any such sales, including the terms of any bidding or
auction process, if utilized, will be described in the Prospectus Supplement
relating thereto.

Offers to purchase Securities may be solicited directly by the
Company or by agents designated by the Company from time to time. Any such
agent, who may be deemed to be an underwriter as that term is defined in the
Securities Act of 1933 (the "Securities Act"), involved in the offer or sale of
any Securities in respect of which this Prospectus is delivered will be named,
and any commissions payable by the Company to such agent will be set forth in
the Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the
period of its appointment. Agents may be entitled, under agreements which may
be entered into with the Company to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, or to
contribution to amounts that agents may be required to pay in respect of such
liabilities. Agents may be customers of, engage in transactions with or
perform services for the Company in the ordinary course of business.

If an underwriter or underwriters are utilized in the sale of
Securities, the Company will execute an underwriting agreement with such
underwriters at the time of such sale of Securities and the names of the
underwriters and the terms of the transaction will be set forth in the
Prospectus Supplement, which will be used by the underwriters to make resales
of the Securities in respect of which this Prospectus is delivered to the
public. The underwriters may be entitled, under the relevant underwriting
agreements, to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act, or to contribution to amounts
that underwriters may be required to pay in respect of such liabilities.

If a dealer is utilized in the sale of the Securities in respect of
which this Prospectus is delivered, the Company will sell such Securities to
such dealer as principal. Such dealer may then resell such Securities to the
public at varying prices to be determined by such dealer at the time of resale.
Dealers may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, or to

-16-
<PAGE> 19
contribution to amounts that dealers may be required to pay in respect of such
liabilities. The name of the dealer, if any, and the terms of the transaction
will be set forth in the Prospectus Supplement.

If so indicated in the Prospectus Supplement, the Company will
authorize agents and underwriters to solicit offers from certain institutions
to purchase Debentures from the Company at the public offering price set forth
in the Prospectus Supplement pursuant to Delayed Delivery Contracts
("Contracts") providing for payment and delivery on the date stated in the
Prospectus Supplement. Each Contract will be for an amount not less than, and
unless the Company otherwise agrees the aggregate principal amount of
Debentures sold pursuant to Contracts shall be not less nor more than, the
respective amounts stated in the Prospectus Supplement. Institutions with
which Contracts, when authorized, may be made include commercial and saving
banks, insurance companies, pension funds, investment companies, educational
and charitable institutions and other institutions but shall in all cases be
subject to the approval of the Company. Contracts will not be subject to any
conditions except that the purchase by an institution of the Debentures covered
by its Contract shall not at the time of delivery be prohibited under the laws
of any jurisdiction in the United States to which such institution is subject.
A commission indicated in the Prospectus Supplement will be paid to
underwriters and agents soliciting offers to purchase Debentures pursuant to
Contracts accepted by the Company.

The place and time of delivery for the Securities in respect of
which this Prospectus is delivered will be set forth in the accompanying
Prospectus Supplement.

LEGAL OPINIONS

Counsel who are passing upon certain legal matters relating to the
Securities are Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New
York, NY 10019 for the Company and Davis Polk & Wardwell, 450 Lexington Avenue,
New York, NY 10017 for the Underwriters.

EXPERTS

Statements made in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, under the caption "Oil and Gas Operating Highlights "
and in Note 16 of the Notes to Consolidated Financial Statements incorporated
by reference in such Annual Report on Form 10-K, also are incorporated herein
by reference in reliance upon the authority of Ryder Scott Company Petroleum
Engineers, independent petroleum and natural gas consultants, as experts.

The consolidated financial statements and schedules incorporated by
reference in, or included in, the Company's Annual Report on Form 10-K for the
year ended December 31, 1994 have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports. Reference
is made to said report which includes an explanatory paragraph that describes
uncertainties which primarily relate to the bankruptcy proceedings of the
Company and Columbia Transmission prior to the effective date of their
respective reorganization plans, including the status of the Company's loans to
Columbia Transmission, certain prepetition asset transfers, the measurement of
certain liabilities and other litigation matters all of which are further
discussed in Note 2 to the consolidated financial statements.

-17-
<PAGE> 20
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth those expenses to be incurred by the
Company in connection with the issuance and distribution of the securities
being registered, other than underwriting discounts and commissions. All of
the amounts shown are estimates, except the applicable Securities and Exchange
Commission registration fee.

<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fees . . . . . . . . . . . . . . $ 344,828

Printing of Registration Statement, Prospectus,
Definitive Debentures and other Miscellaneous Papers . . . . . . . . . . $ *

Trustee's Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ *

Legal Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ *

Independent Public Accountants' Fees and Expenses . . . . . . . . . . . . $ *

Rating Agency Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ *

Service Charges, Columbia Gas System Service Corporation . . . . . . . . . $ *

Blue Sky Filing Fees and Expenses . . . . . . . . . . . . . . . . . . . . $ *

Miscellaneous Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . $ *
-------

Total Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . $ *
=======
</TABLE>

* To be filed by Amendment

ITEM 15.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the General Corporation Law of the State of Delaware gives
Delaware corporations the power to indemnify present and former officers and
directors under certain circumstances. Article V of the Certificate of
Incorporation contains provisions which provide for indemnification of certain
persons (including officers and directors).

Directors and officers liability insurance has been purchased for the
Company's officers and directors, plus directors and officers of subsidiary
companies. Subject to policy terms and conditions, this insurance indemnifies
individual directors and officers for related costs, damage or charges,
including litigation expenditures, incurred as a result of actual or alleged
wrongful acts. The coverage also reimburses the Company and its subsidiary
companies for amounts paid by them to indemnify covered directors and officers.
The annual cost of this insurance to the Company and its subsidiary companies
is $1,565,000.

-18-
<PAGE> 21
ITEM 16.

EXHIBITS

Exhibits filed as part of this Registration Statement are listed in the
Exhibit Index on page 210.

ITEM 17.

UNDERTAKINGS

The undersigned registrant hereby undertakes:

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

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

(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement;

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

provided, however, that paragraphs (l)(i) and (l)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13
or 15(d) of the Exchange Act that are incorporated by reference
in the Registration Statement.

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

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

(4) That for purposes of determining any liability under
the Securities Act, each filing of the registrant's
annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act that is incorporated by
reference in the Registration Statement shall be deemed
to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the
initial bona fide offering thereof.

Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions described
under Item 15 above, or otherwise, the registrant has been advised that in the
opinion of the SEC such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted against the Company by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

-19-
<PAGE> 22
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the County of New Castle and State of Delaware on November
22, 1995.

THE COLUMBIA GAS SYSTEM, INC.

By /s/ L. J. Bainter
---------------------------------------
L. J. Bainter, Treasurer

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

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------

Signature Title Date

- ----------------------------------------------------------------------------------------
<S> <C> <C>
Oliver G. Richard III Director (Principal November 22, 1995
Executive Officer)

Michael W. O'Donnell Senior Vice President
(Principal Financial Officer)

Richard E. Lowe Vice President By: /s/ L. J. Bainter
(Principal Accounting ------------------------
Officer) (L. J. Bainter,
Attorney- in Fact)

Richard F. Albosta Director

Robert H. Beeby Director

Wilson K. Cadman Director

James P. Heffernan Director

Donald P. Hodel Director

Malcolm T. Hopkins Director

Malcolm Jozoff Director

William E. Lavery Director

Gerald E. Mayo Director

Dr. Douglas E. Olesen Director

Ernesta G. Procope Director

James R. Thomas, II Director

William R. Wilson Director
</TABLE>

-20-
<PAGE> 23
EXHIBIT INDEX

Reference is made in the two right hand columns below to those
exhibits which have heretofore been filed with the Commission. Exhibits so
referred to are incorporated herein by reference.
<TABLE>
<CAPTION>

Reference
--------------------------
No. File No. Exhibit
- --- --------- -----------
<S> <C> <C> <C>
1-A+ -Form of Underwriting Agreement (Debentures).

1-B+ -Form of Underwriting Agreement (Common Stock)

1-C+ -Form of Underwriting Agreement (Preferred Stock)

4-Q* -Form of Indenture between the Company and Marine Midland Bank, Trustee.

4-R* -Form of Supplemental Indenture for Debentures.

5+ -Opinion of Messrs. Cravath, Swaine & Moore with respect to the legality of
the Securities.

12* -Statement of Ratio of Earnings to Fixed Charges.

24-A* -Written consent of Arthur Andersen LLP, independent public accountants, to
the incorporation by reference of their reports dated November 22, 1995, which
are included, or incorporated by reference, in the Company's Annual Report on
Form 10-K.

24-B -Letter report, dated February 3, 1995, and the written consent to the filing 1-1098 23-A
and use of information contained in such letter report in Reports and
Registration Statements to be filed during 1995, of Ryder Scott Company
Petroleum Engineers, independent petroleum and natural gas consultants.

24-C+ -The consent of Messrs. Cravath, Swaine & Moore, counsel to the Company,
appears in their opinion which is filed as Exhibit 5 to this Registration
Statement.

25* -Powers of attorney.

26* -Statement of eligibility of trustee.
- -------------
</TABLE>

*Filed herewith.

+To be filed by Amendment

-21-

<PAGE> 1
EXHIBIT 4-Q

PAGE 1 DRAFT

================================================================================

THE COLUMBIA GAS SYSTEM, INC.

Senior Debt Securities

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

INDENTURE

Dated as of _________, 19__

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

Marine Midland Bank
------------------------------------------

Trustee

================================================================================
<PAGE> 2

CROSS-REFERENCE TABLE
- --------------------------------------------------------------------------------
The Columbia Gas System, Inc. and Marine Midland Bank, Trustee
Indenture dated ___________, 1995

<TABLE>
<CAPTION>
TIA Section Indenture Section
- ----------- ------------------
<S> <C>
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08, 6.10, 11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.07
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06, 11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06
314 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05, 11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.02, 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05, 11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11
316 (a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.07
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.06
318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
</TABLE>

<PAGE> 3
PAGE 2

TABLE OF CONTENTS 1/

RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [1]

ARTICLE 1

Definitions and Incorporation by Reference
------------------------------------------

SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [1]
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [8]
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [8]
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [8]

ARTICLE 2

The Securities
--------------

SECTION 2.01. Amount; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . [9]
SECTION 2.02. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [11]
SECTION 2.03. Execution, Authentication and
Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [11]
SECTION 2.04. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [13]
SECTION 2.05. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . [14]
SECTION 2.06. Paying Agent to Hold Money in Trust. . . . . . . . . . . . . . . . . . . . . . . . [14]
SECTION 2.07. Securityholder Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [15]
SECTION 2.08. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [15]
SECTION 2.09. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [17]
SECTION 2.10. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [18]
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [18]
SECTION 2.12. Default Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19]
</TABLE>

____________________

1/ The Table of Contents is included herein for convenience only and is not to
be considered a part of the Indenture.
<PAGE> 4
PAGE 3

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 3

Covenants
---------

SECTION 3.01. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19]
SECTION 3.02. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19]
SECTION 3.03. Limitation on Secured Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . [19]
SECTION 3.04. Limitation on Funded Debt
of Significant Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . [21]
SECTION 3.05. Compliance Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [22]

ARTICLE 4

Successor Company
-----------------

SECTION 4.01. When Company May Merge or Transfer
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [23]
SECTION 4.02. Successor Entity Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . [23]

ARTICLE 5

Defaults and Remedies
---------------------

SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [24]
SECTION 5.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [25]
SECTION 5.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [25]
SECTION 5.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [26]
SECTION 5.05. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [26]
SECTION 5.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [26]
SECTION 5.07. Rights of Holders To Receive Payment . . . . . . . . . . . . . . . . . . . . . . . [27]
SECTION 5.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . [27]
SECTION 5.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . [27]
SECTION 5.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [27]
SECTION 5.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [28]
SECTION 5.12. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . [28]
</TABLE>
<PAGE> 5
PAGE 4

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 6

Trustee
-------

SECTION 6.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [28]
SECTION 6.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [30]
SECTION 6.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . [30]
SECTION 6.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [30]
SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [30]
SECTION 6.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . [31]
SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . [31]
SECTION 6.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [32]
SECTION 6.09. Successor Trustee by Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . [33]
SECTION 6.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . [33]
SECTION 6.11. Preferential Collection of Claims
Against Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [33]

ARTICLE 7

Discharge of Indenture; Defeasance
----------------------------------

SECTION 7.01. Discharge of Liability on
Securities; Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [33]
SECTION 7.02. Conditions to Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [34]
SECTION 7.03. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . [35]
SECTION 7.04. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [35]

ARTICLE 8

Amendments
----------

SECTION 8.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . [35]
SECTION 8.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [36]
SECTION 8.03. Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . [37]
SECTION 8.04. Revocation and Effect of Consent
and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [37]
SECTION 8.05. Notation on or Exchange of
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38]
SECTION 8.06. Trustee To Sign Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38]
</TABLE>
<PAGE> 6
PAGE 5

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 9

Redemption
----------

SECTION 9.01. Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38]
SECTION 9.02. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [38]
SECTION 9.03. Selection of Securities To Be
Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [39]
SECTION 9.04. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [39]
SECTION 9.05. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . [40]
SECTION 9.06. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . [40]
SECTION 9.07. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . [40]

ARTICLE 10

Sinking Funds
-------------

SECTION 10.01. Applicability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [40]
SECTION 10.02. Satisfaction of Sinking
Fund Payment with Securities . . . . . . . . . . . . . . . . . . . . . . . . . . [41]
SECTION 10.03. Redemption of Securities
for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [41]

ARTICLE 11

Miscellaneous
-------------

SECTION 11.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . [42]
SECTION 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [42]
SECTION 11.03. Communication by Holders with Other
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [43]
SECTION 11.04. Certificate and Opinion as to
Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [43]
SECTION 11.05. Statements Required in Certificate
or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [43]
SECTION 11.06. When Securities Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.07. Rules by Trustee, Paying Agent and
Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.08. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.10. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [44]
SECTION 11.12. Multiple Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45]
SECTION 11.13. Table of Contents; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45]
</TABLE>
<PAGE> 7
PAGE 6

<TABLE>
<CAPTION>
Page
----
<S> <C>
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45]
EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [45]
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [46]
</TABLE>
<PAGE> 8
PAGE 7

THIS INDENTURE dated ____________________________ between The
Columbia Gas System, Inc., a corporation duly organized and existing under the
laws of the State of Delaware (hereinafter called the "Company"), having its
principal office at 20 Montchanin Road, Wilmington, Delaware 19807-0020, and
Marine Midland Bank, a banking corporation and trust company organized and
existing under the laws of the State of New York (hereinafter called the
"Trustee").

RECITALS OF THE COMPANY

The Company has duly authorized the creation of an issue of
its Securities (hereinafter called the "Securities") of substantially the tenor
and amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture.

All things necessary to make the Securities, when executed
by the Company and authenticated and delivered by the Trustee hereunder and
duly issued by the Company, the valid obligations of the Company, and to make
this Indenture a valid agreement of the Company, in accordance with their and
its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

ARTICLE 1

Definitions and Incorporation by Reference

SECTION 1.01. Definitions.

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

"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board
of Directors in respect hereof.

"Board Resolution" means a resolution duly adopted by the
Board of Directors of the Company, a copy of which shall be certified by the
Secretary or an Assistant Secretary, as being in full force and effect on the
date of such certification and delivered to the Trustee.
<PAGE> 9
PAGE 8

"Business Day" means each day which is not a Legal Holiday.

"Bylaws" means the "Bylaws of The Columbia Gas System,
Inc." as amended from time to time.

"Capital Lease Obligations" of a person means any
obligation which is required to be classified and accounted for as a capital
lease obligation on the balance sheet of such person prepared in accordance
with generally accepted accounting principles; the amount of such obligation
shall be the capitalized amount thereof, determined in accordance with
generally accepted accounting principles; and the stated maturity thereof shall
be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.

"Capital Stock" means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock, including any Preferred
Stock.

"Company" means The Columbia Gas System, Inc., a Delaware
corporation, unless and until a successor replaces it pursuant to Article 4
and, thereafter, means the successor (or any subsequent successor pursuant to
said Article) and, for purposes of any provision contained herein and required
by the TIA, each other Obligor on the Securities.

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

"Debt" of any person means, without duplication,

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

(ii) all Capital Lease Obligations of such person;

(iii) all obligations of such person issued or assumed as
the deferred purchase price of property (but excluding trade
accounts payable arising in the ordinary course of business);

(iv) all obligations of such person for the reimbursement
of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations
<PAGE> 10
PAGE 9
with respect to letters of credit securing obligations (other
than obligations described in (i) through (iii) above) entered
into in the ordinary course of business of such person to the
extent such letters of credit are not drawn upon or, if and to
the extent drawn upon, such drawing is reimbursed no later than
the third Business Day following receipt by such person of a
demand for reimbursement following payment on the letter of
credit);

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

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

"Default" means any event which is, or after notice or
passage of time or both would be, an Event of Default as more fully described
in Section 5.01 of this Indenture.

"Depository" means, with respect to the Securities of any
series issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository by the Company pursuant to
Section 2.01 until a successor Depository shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Depository" shall
mean or include each person who is then a Depository hereunder, and if at any
time there is more than one such person, "Depository" as used with respect to
the Securities of any such series shall mean the Depository with respect to the
Securities of that series.

"Exchange Act" means the Securities Exchange Act of 1934,
as amended.

"Funded Debt" means all Debt created, assumed or guaranteed
by a Significant Subsidiary which matures by its terms, or is renewable at the
option of such Subsidiary to a date, more than one year after the date of the
original creation, assumption or guarantee of such Debt by such Subsidiary.

"Global Security" means with respect to any series of
Securities issued hereunder, a Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depository or pursuant to the
Depository's instruction, all in accordance with this Indenture, an indenture
supplemental hereto, if any, or Board Resolution and pursuant to a Company
Order, which shall be registered in the name of the Depository or its nominee
and which shall represent, and shall be denominated in an amount equal to the
aggregate Principal Amount of, all of the outstanding Securities of such series
or any portion thereof, in either case having the same Terms, including,
without limitation, the same issue date, date or dates on which principal is
due, and interest rate or method of determining interest.
<PAGE> 11
PAGE 10

"Holder" or "Securityholder" means the person in whose name
a Security is registered on the Registrar's books.

"Indenture" means this Indenture as amended or supplemented
from time to time.

"Interest Payment Date" means the date specified in the
Securities as the fixed date on which interest is due and payable.

"Issue" or "issue" means, with respect to Debt, issue,
assume, guarantee, incur or otherwise become liable for.

"Lien" means any mortgage, pledge, deposit for security,
security interest or other similar lien, other than the following: (i) liens
for taxes or assessments or other local, state or federal governmental charges
or levies; (ii) any lien to secure obligations under workmen's compensation or
unemployment insurance laws or similar legislation, including liens of
judgments thereunder which are not currently dischargeable; (iii) any lien to
secure performance in connection with bids, tenders, contracts (other than
contracts for the payment of Debt) or leases made in the ordinary course of
business; (iv) liens to secure public or statutory obligations; (v)
materialmen's, mechanics', carriers', workmen's, repairmen's, construction, or
other liens or charges arising in the ordinary course of business, which may or
may not be filed or asserted or the payment of which has been adequately
secured or which are not material in amount; or deposits to obtain the release
of such liens; (vi) any lien to secure indemnity, performance, surety or
similar bonds to which the Company or any Affiliate of the Company is a party;
(vii) liens created by or resulting from court or administrative proceedings
which are currently being contested in good faith by appropriate actions or
proceedings or for the purpose of obtaining a stay or discharge in the course
of any court or legal proceedings; (viii) leases made, or existing on property
acquired, constructed or improved, in the ordinary course of business, together
with repairs and additions thereto and improvements thereof; (ix) landlords'
liens; (x) zoning restrictions, easements, licenses, reservations or
restrictions in respect of currently owned or hereafter acquired, constructed,
or improved tangible property or defects or irregularities (including any
terms, conditions, agreements, covenants, exceptions and reservations expressed
or provided in deeds or other agreements) in title thereto, which do not
materially impair the business of the Company; (xi) any lien on accounts
receivable, inventories or customers' installment paper or the proceeds thereof
incurred to secure Debt permitted under Section 3.03; (xii) any of such liens,
whether or not delinquent, whose validity or applicability is at the time being
contested in good faith by the Company or any Subsidiary; (xiii) liens securing
obligations neither assumed by the Company or any Subsidiary nor on account of
which any of them customarily pays interest directly or indirectly, existing,
either at the date hereof, or, as to property hereafter acquired, constructed,
or improved at the time of acquisition construction or improvement by the
Company or a Subsidiary; (xiv) any right which any municipal or governmental
body or agency may have by virtue of any franchise, license, contract or
statute to purchase, or designate a purchaser of or order the sale of, any
property of the Company or any Subsidiary upon payment of reasonable
compensation therefor, or to terminate any franchise,
<PAGE> 12
PAGE 11

license or other rights or to regulate the property and business of the Company
or any Subsidiary; (xv) the lien of judgments covered by insurance, or upon
appeal and covered, if necessary, by the filing of an appeal bond, or if not so
covered, not exceeding at any one time [$1,000,000] in aggregate amount; (xvi)
any lien or encumbrance, moneys sufficient for the discharge of which have been
deposited in trust with the Trustee hereunder or with the trustee or mortgagee
under the instrument evidencing such lien or encumbrance, with irrevocable
authority to the Trustee hereunder or to such other trustee or mortgagee to
apply such moneys to the discharge of such lien or encumbrance to the extent
required for such purpose; (xvii) rights reserved to or vested in others to
take or receive any part of the gas, by-products of gas or steam generated or
produced by or from any properties of the Company or any Subsidiary with
respect to any other rights concerning gas supply, transportation, or storage
which are in use in the ordinary course of the natural gas business; (xviii)
liens created or assumed by the Company or a Subsidiary in connection with (a)
the issuance of debt securities, the interest on which is excludable from the
gross income of the holders of such securities pursuant to Section 103 of the
Internal Revenue Code of 1986, or any successor section, or (b) the issuance of
other debt securities, whether or not the interest thereon is excluded from the
gross income of the holders of such securities, through any public or
governmental authority, in each case for purpose of financing, in whole or in
part, the acquisition or construction of the property to be used by the Company
or a Subsidiary, but such liens shall be limited to the property so financed
(and the real estate on which such property is to be located), together with
repairs and additions thereto and improvements thereof; and (xix) liens
attaching to property of the Company or a Subsidiary at the time a person
consolidates with or merges into, or transfers all or substantially all of its
assets to, the Company or a Subsidiary, together with repairs and additions
thereto and improvements thereon, provided that, based on an Officers'
Certificate such property acquired pursuant to the consolidation, merger or
asset transfer is adequate security for the lien.

"Officer" means the Chairman of the Board, the President,
any Vice President, the Treasurer, the Secretary, the Controller, any Assistant
Treasurer, any Assistant Secretary, any Assistant Controller, or any officers
of the Company designated by Board Resolution or the Bylaws.

"Officers' Certificate" means a certificate signed by two
Officers.

"Opinion of Counsel" means a written opinion from legal
counsel who may be an employee of or counsel to the Company (or any subsidiary
or affiliate) or other counsel acceptable to the Trustee.

"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 5.02.

<PAGE> 13
PAGE 12

"Principal Amount" of a Security means the principal amount
of the Security plus the premium, if applicable, payable on the Security which
is due or overdue or is to become due at the relevant time.

"Production Payment" means any economic interest in oil,
gas or mineral reserves which (a) entitles the holder thereof to a specified
share of future production from such reserves, free of the costs and expenses
of such production, and (b) terminates when a specified quantity of such share
of future production from such reserves has been delivered or a specified sum
has been realized from the sale of such share of future production from such
reserves.

"SEC" means the United States Securities and Exchange
Commission.

"Secured Debt" means Debt secured by a Lien.

"Securities" means the Securities issued under this
Indenture.

"Significant Subsidiary" means a Subsidiary that meets the
conditions for being classified as a "significant subsidiary" under Regulation
S-X of the SEC as such regulation reads as of the date of this Indenture.

"Subsidiary" means a corporation or limited liability
company of which a majority of the Capital Stock, having voting power under
ordinary circumstances to elect directors, is owned by the Company and/or one
or more Subsidiaries.

"Terms" means the maturity date, interest rate or method of
determining the interest rate, interest payment dates, redemption provisions
(optional or mandatory) and any other terms of any Securities established
pursuant to Sections 2.01 and 2.03.

"TIA" means the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990 (15 U.S.C. Section Section
77aaa-77bbbb), as in effect on the date of this Indenture.

"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.

"Trust Officer" means any officer of the Trustee assigned
by the Trustee to administer its corporate trust matters.

"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.

SECTION 1.02. Other Definitions.
<PAGE> 14
PAGE 13

<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Bankruptcy Law" ............................................ 5.01
"Consolidated Tangible Assets" .............................. 3.03
"Covenant Defeasance Option" ................................ 7.01(b)
"Custodian" ................................................. 5.01
"Event of Default" .......................................... 5.01
"Legal Defeasance Option" ................................... 7.01(b)
"Legal Holiday" ............................................. 11.08
"Mandatory Sinking Fund Payment ............................. 10.01
"Notice of Default" ......................................... 5.01
"Optional Sinking Fund Payment .............................. 10.01
</TABLE>
<PAGE> 15
PAGE 14

<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Paying Agent" .............................................. 2.05
"Registrar" ................................................. 2.05
"Tangible Assets" ........................................... 3.03
</TABLE>

SECTION 1.03. Incorporation by Reference of Trust
Indenture Act. Whenever this Indenture refers to a provision of the TIA or a
provision of the TIA provides that an indenture to be qualified thereunder
shall be deemed to include such provision, the provision is incorporated by
reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings as if fully set forth herein and
in any supplement hereto:

"Commission" means the SEC.

"Obligor" on the Securities means the Company and any other
obligor on the Securities.

All other TIA terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or defined by
Commission rule have the meanings assigned to them by such definitions.

SECTION 1.04. Rules of Construction. Unless the context
otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;

(3) "including" means including, without limitation;

(4) "person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency
or political subdivision thereof or any other entity.

(5) "or" is not exclusive;

(6) words in the singular include the plural and words in
the plural include the singular; and

(7) the principal amount of any noninterest bearing or
other discount security at any date shall be the principal
amount thereof that would be shown on a balance sheet of
<PAGE> 16
PAGE 15

the issuer dated such date prepared in accordance with
generally accepted accounting principles and accretion of
principal on such security shall not be deemed to be the
issuance of Debt.

ARTICLE 2

The Securities

SECTION 2.01. Amount; Issuable in Series. The aggregate
Principal Amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.

The Securities may be issued in one or more series and
Securities of the same series may have different Terms. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series, except as contemplated by the
fourth paragraph of Section 2.03:

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

(2) any limit upon the aggregate Principal Amount of the
Securities of the series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the
series pursuant to Sections 2.04, 2.08, 2.09, 8.05 and 9.07;

(3) the date or dates on which the principal and premium,
if applicable, of any of the Securities of the series are
payable or the method of determination thereof;

(4) the rate or rates, or the method of determination
thereof, at which any of the Securities of the series shall
bear interest, if any, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which
such interest shall be payable and the regular record date for
the interest payable on any Interest Payment Date;

(5) the place or places where the principal of and
interest, if any, on any of the Securities of the series shall
be payable and the office or agency for the Securities of the
series maintained by the Company pursuant to Section 2.05;

(6) the period or periods within which, the price or prices
at which and the Terms and conditions upon which any of the
Securities of the series may be redeemed, in whole or in part,
at the option of the Company;
<PAGE> 17
PAGE 16

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

(8) if other than denominations authorized by Section 2.02,
the denominations in which the Securities of the series shall
be issuable;

(9) if other than the Principal Amount thereof, the portion
of the Principal Amount of any of the Securities of the series
which shall be payable upon declaration of acceleration of the
maturity thereof pursuant to Section 5.02;

(10) any deletions or modifications of or additions to the
Events of Default set forth in Section 5.01 or covenants of
the Company set forth in Article 3 pertaining to the
Securities of the series;

(11) Whether the Securities are secured or unsecured
obligations of the Company;

(12) the forms of the Securities of the series;

(13) whether the Securities of the series shall be issued
in whole or in part in the form of one or more Global
Securities and, in such case, the Depository for such Global
Security or Securities;

(14) if Securities of the series are to be convertible into
other securities, the Terms of such conversion; and

(15) any other Terms of any of the Securities of the series.

All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above, or the Company Order
contemplated by the fourth paragraph of Section 2.03, and set forth in the
Officers' Certificate referred to above or in any such indenture supplemental
hereto.

At the option of the Company, interest on any series that
bears interest may be paid by mailing a check to the address of, or making a
wire transfer to the account of, any Holder as such address shall appear in the
register maintained pursuant to Section 2.05.
<PAGE> 18
PAGE 17

The Securities may have notations, legends or endorsements
required by law, stock exchange rule, agreements to which the Company is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company).

If any of the Terms of the series are established by action
taken pursuant to a Board Resolution, except as to those contemplated by the
fourth paragraph of Section 2.03, a copy of an appropriate record of such
action together with such Board Resolution shall be certified by the Secretary
or an Assistant Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Officers' Certificate setting forth the Terms of
the series.

SECTION 2.02. Denominations. The Securities of each
series shall be issuable in such denominations as shall be specified as
contemplated by Section 2.01. In the absence of any such provisions with
respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and in any integral multiple thereof.
Securities of each series shall be numbered, lettered or otherwise
distinguished in such manner in accordance with such plan as the Officers of
the Company executing the same may determine with the approval of the Trustee.

SECTION 2.03. Execution, Authentication and Delivery. One
Officer shall sign the Securities for the Company by manual or facsimile
signature. The Company's seal shall be impressed, affixed, imprinted or
reproduced on the Securities and may be in facsimile form.

If an Officer whose signature is on a Security no longer
holds that office at the time the Trustee authenticates the Security, the
Security shall be valid nevertheless.

A Security shall not be valid until an authorized signatory
of the Trustee manually signs the certificate of authentication on the
Security. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.

At any time after the execution and delivery of this
Indenture, the Company may execute and deliver to the Trustee Securities of any
series, together with a Company Order for the authentication and delivery of
such Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities; provided that, if all Securities of a
series are not to be originally issued at one time, the Trustee shall
authenticate and deliver Securities of such series for original issue from time
to time in the aggregate Principal Amount established for such series pursuant
to such procedures acceptable to the Trustee and to such recipients as may be
specified from time to time by Company Order. The maturity date, original
issuance date, interest rate and any other Terms of the Securities of such
series shall be determined by or pursuant to such Company Order and procedures.
If provided for in such procedures, such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from
the Company or its duly authorized agents, which instructions, if given orally,
shall be promptly confirmed in writing.
<PAGE> 19
PAGE 18

If the forms or Terms of the Securities of the series have
been established by or pursuant to one or more Board Resolutions as permitted
by Section 2.01, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating:

(a) that such forms and/or Terms have been established in
conformity with the provisions of this Indenture; and

(b) that such Securities, when authenticated and delivered
by the Trustee and issued by the Company in the manner and
subject to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding obligations
of the Company, entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their
terms, subject to such exceptions as counsel may specify.

If such forms or Terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

Notwithstanding the provisions of Section 2.01 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 2.01 or the Company Order
and Opinion of Counsel otherwise required pursuant to such preceding paragraph
at or prior to the time of authentication of each Security of such series if
such documents are delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued; provided that
paragraph (a) of said Opinion of Counsel shall, in such case, read as follows:

"(a) that such forms have been established in conformity
with the provisions of this Indenture and the procedures for
determining the Terms of such Securities as set forth in the
procedures hereinabove referred to have been established in
conformity with the provisions of this Indenture."

If the Company shall establish pursuant to Section 2.01
that the Securities of a series are to be issued in whole or in part in the
form of a Global Security, then the Company shall execute and the Trustee shall
in accordance with this Section and the Company Order with respect to such
series authenticate and deliver the Global Security that (i) shall represent
and shall be denominated in an aggregate amount equal to the aggregate
principal amount of Outstanding Securities of such series to be represented by
the Global Security, (ii) shall be registered in the name of the Depository or
its nominee, and (iii) shall be delivered by the Trustee to such Depository or
pursuant to such Depository's instruction.
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Each Depository designated pursuant to Section 2.01 for a
Global Security in registered form must, at the time of its designation and at
all times while it serves as Depository, be a clearing agency registered under
the Exchange Act and any other applicable statute or regulation.

SECTION 2.04. Temporary Securities. Pending the
preparation of definitive Securities of any series, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued, in registered
form and with such appropriate insertions, omissions, substitutions and other
variations as the Officers executing such Securities may determine, as
evidenced conclusively by their execution of such Securities. Such temporary
Securities may be in global form.

If temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company maintained pursuant to
Section 2.05 for the purpose of exchanges of Securities of such series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a like aggregate Principal
Amount of definitive Securities of the same series and of like tenor or
authorized denominations and having the same Terms and conditions.

Until exchanged in full as hereinabove provided, the
temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of the same series
and of like tenor authenticated and delivered hereunder.

SECTION 2.05. Registrar and Paying Agent. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where Securities may be presented for payment (the "Paying Agent"). The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.

The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a party to this
Indenture, which shall incorporate the terms of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such agent. The
Company shall notify the Trustee of the name and address of any such agent. If
the Company fails to maintain a Registrar or Paying Agent, the Trustee shall
act as such and shall be entitled to appropriate compensation therefor pursuant
to Section 6.07. The Company or any
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Subsidiary or Affiliate of the Company may act as Paying Agent, Registrar,
co-registrar or transfer agent.

The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.

SECTION 2.06. Paying Agent To Hold Money in Trust. On or
prior to each due date of the principal and interest on any Security, the
Company shall deposit with the Paying Agent a sum sufficient to pay such
principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal of or interest on the
Securities and shall notify the Trustee of any default by the Company in making
any such payment. If the Company or any Subsidiary or Affiliate of the Company
acts as Paying Agent, it shall segregate the money held by it as Paying Agent
and hold it as a separate trust fund. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed by the Paying Agent. Upon complying with this Section, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.

SECTION 2.07. Securityholder Lists. The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders. If the Trustee
is not the Registrar, the Company shall furnish to the Trustee, in writing at
least five Business Days before each May 15 and November 15 and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Securityholders.

SECTION 2.08. Transfer and Exchange. The Securities shall
be issued in registered form and shall be transferable only upon the surrender
of a Security with similar Terms of the same series for registration of
transfer. When a Security is presented to the Registrar or a co-registrar with
a request to register a transfer, the Registrar shall register the transfer as
requested, subject to compliance with this paragraph. When Securities of a
series are presented to the Registrar or a co-registrar with a request to
exchange them for an equal Principal Amount of Securities of such series with
similar Terms of other denominations, the Registrar shall make the exchange as
requested, subject to such compliance. To permit registration of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities of the applicable series with similar Terms at the Registrar's or
co-registrar's request. The Company may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges. Every Security
presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Registrar duly executed, by the Holder thereof or his attorney duly authorized
in writing. The Company shall not be required (i) to Issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of
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Securities of that series selected for redemption under Section 9.03 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.

Prior to the due presentation for registration of transfer
of any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other
purposes whatsoever, whether or not such Security is overdue, and none of the
Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall
be affected by notice to the contrary.

If at any time the Depository for the whole or part of the
Securities of a series notifies the Company that it is unwilling or unable to
continue as Depository for such Securities or if at any time the Depository for
such Securities shall no longer be eligible under Section 2.03, the Company
shall appoint a successor Depository with respect to such Securities. If a
successor Depository for such Securities is not appointed by the Company within
90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company's election pursuant to Section 2.01 shall no longer
be effective with respect to such Securities and the Company will execute, and
the Trustee, upon receipt of a Company Order for the authentication and
delivery of definitive Securities of such series, will authenticate and
deliver, corresponding Securities in definitive form in an aggregate principal
amount equal to the Principal Amount of the Global Security representing such
Securities in exchange for such Global Security.

If specified by the Company pursuant to Section 2.01 with
respect to a series of Securities, the Company may at any time and in its sole
discretion determine that Securities of any series issued in the form of one or
more Global Securities shall no longer be represented by such Global Security
or Securities. In such event the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of corresponding
definitive Securities, will authenticate and deliver such Securities in
definitive form and in an aggregate Principal Amount equal to the Principal
Amount of such Global Security or Securities in exchange for such Global
Security or Securities.

If specified by the Company pursuant to Section 2.01 with
respect to the whole or part of a series of Securities, the Depository for such
Securities may surrender a Global Security for such Securities with similar
Terms in exchange in whole or in part for Securities of such series with
similar Terms in definitive form on such terms as are acceptable to the Company
and such Depository. Thereupon, the Company shall execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series with similar Terms, shall authenticate and
deliver, without charge to the Holders,
<PAGE> 23
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(i) to each person specified by such Depository a new
Security or Securities of the series with similar Terms of any
authorized denomination as requested by such person in
aggregate Principal Amount equal to and in exchange for such
person's beneficial interest in the Global Security; and

(ii) to such Depository a new Global Security in a
denomination equal to the difference, if any, between the
Principal Amount of the surrendered Global Security and the
aggregate Principal Amount of Securities with similar Terms
delivered to Holders thereof.

In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee will authenticate and
deliver Securities in definitive form in authorized denominations.

Upon the exchange of a Global Security for Securities in
definitive form, such Global Security shall be cancelled by the Trustee.
Securities issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depository for such Global Security, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to the persons in whose names such Securities are
so registered.

Notwithstanding any other provision of this Section to the
contrary, unless and until a Global Security is exchanged in whole for
Securities in definitive form, a Global Security representing all or a portion
of the Securities of a series may not be transferred except as a whole by the
Depository for such series to a nominee of such Depository or by a nominee of
such Depository to such Depository or another nominee of such Depository or by
such Depository or any such nominee to a successor Depository for such series
or a nominee of such successor Depository.

SECTION 2.09. Replacement Securities. If a mutilated
Security is surrendered to the Registrar or if the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, the Company
shall Issue and the Trustee shall authenticate a replacement Security of the
applicable series with similar Terms if the Holder satisfies any other
reasonable requirements of the Trustee. If required by the Trustee or the
Company, such Holder shall furnish evidence to their satisfaction of the
destruction, loss or wrongful taking of any Security so claimed to be lost,
destroyed or wrongfully taken, and an indemnity bond sufficient in the judgment
of the Company and the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss which any of them may
suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.

Every replacement Security is an additional obligation of
the Company.
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SECTION 2.10. Outstanding Securities. Securities
outstanding at any time are all Securities authenticated by the Trustee except
for those cancelled by it, those delivered to it for cancellation and those
described in this Section as not outstanding. A Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.

If a Security is replaced pursuant to Section 2.09, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a bona fide
purchaser.

If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal, premium (if applicable) and interest payable
on that date with respect to the Securities to be redeemed or maturing, as the
case may be, and the Paying Agent is not prohibited from paying such money to
the Securityholders on that date pursuant to the terms of this Indenture, then
on and after that date such Securities cease to be outstanding and interest on
them ceases to accrue.

In determining whether the Holders of the requisite
Principal Amount of outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder the Principal
Amount of an Original Issue Discount Security that shall be deemed to be
outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.02.

SECTION 2.11. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the
Paying Agent shall forward to the Trustee any Securities surrendered to them
for registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancellation and deliver a certificate of such destruction
to the Company unless the Company directs the Trustee to deliver cancelled
Securities to the Company. The Company may not Issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancellation.

SECTION 2.12. Default Interest. If the Company defaults
in a payment of interest on the Securities, the Company shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful at the
rate or rates prescribed therefor in the Securities) in any lawful manner. The
Company may also pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date, which date shall be at
least five Business Days prior to the payment date in which case the Company
shall fix or cause to be fixed any such special record date and payment date,
and, at least 15 days before any such special record date, the Company shall
mail to each Securityholder a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid.
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ARTICLE 3

Covenants

SECTION 3.01. Payment of Securities. The Company shall
promptly pay the principal of and interest on the Securities on the dates and
in the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient to
pay all principal and interest then due and the Trustee or the Paying Agent, as
the case may be, is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture.

SECTION 3.02. SEC Reports. The Company shall file with
the Trustee, within 30 days after it files them with the SEC, copies of its
annual report and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. The Company shall also comply with
the other provisions of TIA Section 314(a)(1),(2) and (3).

SECTION 3.03. Limitation on Secured Debt. The Company
shall not issue any Secured Debt unless contemporaneously therewith effective
provision is made to secure the Securities equally and ratably with such
Secured Debt for so long as such Secured Debt is secured by a Lien. The
preceding sentence shall not require the Company to equally and ratably secure
the Securities upon the incurrence of the following Secured Debt:

(1) Debt of the Company which is incurred to finance the
acquisition, construction or improvement of assets of the
Company and its Subsidiaries, which acquisition is
consummated, or which construction or improvement is
commenced, after the date of this Indenture; provided,
however, that such Debt shall not be secured by any assets of
the Company other than assets so acquired, constructed or
improved (together with (i) to the extent the terms of Secured
Debt so provides, repairs and additions thereto and
improvements thereof, and (ii) with respect to construction
and improvement, if any theretofore unimproved real property on
which the property so constructed or improved is located);

(2) Debt of the Company which is secured by assets of a
person where such Debt was existing at the time such person
was merged or consolidated with the Company or at the time of
sale, other disposition, or lease, of the properties of such
person as an entirety (or substantially as an entirety) to the
Company; provided, however, that such Debt shall not be
secured by any assets of the Company other than the assets
subject thereto at the time of the acquisition (together with,
to the extent the terms of Secured Debt so provides, repairs
and additions thereto and improvements thereof);
<PAGE> 26
PAGE 25

(3) Debt of the Company issued to refinance such Debt
incurred under paragraphs (1) and (2) provided that the Debt
so issued is not secured by a Lien on assets other than those
which secure the Debt being refinanced (together with, to the
extent the terms of new Secured Debt so provides, repairs and
additions thereto and improvements thereof);

(4) Debt of the Company which is secured by inventory,
accounts receivable, or customers' installment paper including
by means of asset securitizations;

(5) Obligations arising with respect to Production
Payments; and

(6) Other Debt with a Principal Amount not exceeding, in
the aggregate at any one time outstanding, ten percent (10%)
of the Consolidated Tangible Assets of the Company and its
consolidated subsidiaries, as of the end of the most recent
fiscal quarter of the Company ending not less than 45 days
from the date of determination.

The term "Consolidated Tangible Assets" means that sum of
the Tangible Assets of the Company and its consolidated
Subsidiaries after eliminating intercompany items.

The term "Tangible Assets", as applied to any person on any
date shall mean the gross book value as shown on the books of
such person of all its property both real and personal
(exclusive of licenses, patents, patent applications,
copyrights, trademarks, trade names, good will, experimental
or organizational expense and other like intangibles, treasury
stock and unamortized debt discount and expense but including
regulatory assets properly recorded on the balance sheet of
such person.)

SECTION 3.04. Limitations on Funded Debt of Significant
Subsidiaries. The Company shall not permit any Significant Subsidiary to
issue, directly or indirectly, any Funded Debt except:

(1) Funded Debt issued and outstanding on or prior to the
date of this Indenture;

(2) Funded Debt issued to and held by the Company or a
Subsidiary; provided, however, that any subsequent issuance or
transfer of any common stock which results in any such
Subsidiary ceasing to be a Subsidiary and any subsequent
transfer of such Debt (other than to the Company or a
Subsidiary) shall be deemed the issuance of such Debt by the
issuer thereof;

(3) Funded Debt of a Significant Subsidiary issued and
outstanding on or prior to the date on which such Subsidiary
was acquired by the Company or on which it became a
Significant Subsidiary;
<PAGE> 27
PAGE 26

(4) Funded Debt issued to finance the acquisition by such
Significant Subsidiary of any assets or Capital Stock of any
person or the construction or improvement of assets of such
Significant Subsidiary, which acquisition is consummated, or
which construction or improvement is commenced, after the date
of this Indenture;

(5) Funded Debt issued in exchange for, or the proceeds of
which are used to refund or refinance, Debt referred to in the
foregoing clauses (1) through (4) or to reacquire equity of
such Significant Subsidiary held by the Company or a
Subsidiary;

(6) Funded Debt issued with respect to (a) obligations that
are tax-exempt pursuant to Section 103 of the Internal Revenue
Code of 1986 as from time to time amended and that are issued
in connection with pollution control or other facilities of
such Significant Subsidiary or (b) other obligations, whether
taxable to tax-exempt, that are issued through any public or
governmental authority in connection with pollution control or
other facilities of such Significant Subsidiary;

(7) Funded Debt in an aggregate amount not exceeding the
sum of (a) total inventory of the Significant Subsidiary; (b)
total accounts receivable of the Significant Subsidiary; and
(c) the total amount of customers' installment paper of such
Significant Subsidiary, in accordance with generally accepted
accounting principles, in each case, as of the end of the most
recent fiscal quarter of such Significant Subsidiary ending
not less than 45 days from the date of determination;

(8) Obligations with respect to Production Payments; and

(9) Funded Debt in an aggregate Principal Amount which,
when added to the aggregate Principal Amount of Funded Debt of
all other Significant Subsidiaries (other than Funded Debt
referred to in clauses (1) through (8) above) does not exceed,
at any one time outstanding, ten percent (10%) of the sum of
the Tangible Assets of such Significant Subsidiary and all
other Significant Subsidiaries determined on a consolidated
basis, as of the end of the most recent fiscal quarter of each
such Significant Subsidiary ending not less than 45 days from
the date of determination.

SECTION 3.05. Compliance Certificate. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company a certificate from its principal executive officer, principal
financial officer or principal accounting officer stating that in the course
of the performance by such signer of his duties as an officer of the Company
he would normally have knowledge of any Default by the Company or any
noncompliance with the conditions and covenants under the Indenture and
whether or not he knows of any Default or any such noncompliance that occurred
during such period. If such officer does, the certificate shall describe the
Default or non-compliance, its status and what action the Company is taking or
proposes to take with respect thereto. For purposes of this Section 3.05,
such noncompliance
<PAGE> 28
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shall be determined without regard to any period of grace or requirement of
notice provided under this Indenture.

ARTICLE 4

Successor Company

SECTION 4.01. When Company May Merge or Transfer Assets.
The Company shall not consolidate with or merge with or into, or convey or
otherwise transfer, or lease, its assets as an entirety (or substantially as an
entirety) to, any person, unless:

(i) the resulting, surviving or transferee person (if not
the Company) shall be a person organized and existing under
the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all
the obligations of the Company under the Securities and this
Indenture;

(ii) immediately after giving effect to such transaction
(and treating any Debt, other than Debt referred to in clause
(2) of Section 3.03, which becomes an obligation of the
resulting, surviving or transferee person as a result of such
transaction as having been incurred by such person at the time
of such transaction and, in the case of Debt of the type
described in clause (1) of Section 3.03, the relevant
acquisition, construction or improvement as having then
occurred no Default shall have happened and be continuing; and

(iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, transfer, or lease and such
supplemental indenture (if any) comply with this Indenture.

SECTION 4.02. Successor Entity Substituted. Upon any
consolidation by the Company with or merger by the Company into any other
entity or any conveyance or other transfer, or lease, of the assets of the
Company as an entirety (or substantially as an entirety) in accordance with
Section 4.01, the successor entity formed by such consolidation or into which
the Company is merged or to which such conveyance or other transfer, or lease,
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor entity had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor entity shall be relieved of all
obligations and covenants under this Indenture and the Securities.
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ARTICLE 5

Defaults and Remedies

SECTION 5.01. Events of Default. An "Event of Default"
occurs if:

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

(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at its
stated maturity, upon declaration or otherwise;

(3) the Company fails to comply with Section 4.01;

(4) the Company fails to comply with any of its agreements
in the Securities or this Indenture (other than those referred
to in (1), (2), or (3) above) and such failure continues for
60 days after the notice specified below;

(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:

(A) commences a voluntary case;

(B) consents to the entry of an order for relief
against it in an involuntary case;

(D) makes a general assignment for the benefit of its
creditors; or

(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:

(A) is for relief against the Company in an
involuntary case;

(B) appoints a Custodian of the Company or for any
substantial part of its property; or

and the order or decree remains unstayed and in effect for 60
days.

The term "Bankruptcy Law" means Title 11, United States
Code, or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
<PAGE> 30
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A Default under clause (4) is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such Notice. Such Notice
must specify the Default, demand that it be remedied and state that such notice
is a "Notice of Default".

The Company shall deliver to the Trustee, within 30 days
after the occurrence thereof, written notice in the form of an Officers'
Certificate of any event which with the giving of notice and the lapse of time
would become an Event of Default under clause (4), its status and what action
the Company is taking or proposes to take with respect thereto.

SECTION 5.02. Acceleration. If an Event of Default (other
than an Event of Default specified in Section 5.01(5) or (6)) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least
25% in principal amount of the Securities by notice to the Company and the
Trustee, may declare the principal of (or, in connection with Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of such Securities) and accrued interest on all the Securities to
be due and payable. Upon such a declaration, such principal (or portion
thereof) and interest shall be due and payable immediately. If an Event of
Default specified in Section 5.01(5) or (6) occurs and is continuing, the
principal of and interest on all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholders. If all existing Events of Default have
been cured or waived, except nonpayment of principal or interest that has
become due solely because of acceleration, any such acceleration and its
consequences shall be automatically rescinded unless such rescission would
conflict with any judgment or decree. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

SECTION 5.03. Other Remedies. If an Event of Default
occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of principal of or interest on the Securities or to enforce
the performance of any provision of the Securities or this Indenture.

The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.

SECTION 5.04. Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (1) a Default in the
payment of the principal of or interest on a Security or (2) a Default in
respect of a provision that under Section 8.02 cannot be amended without the
<PAGE> 31
PAGE 30

consent of each Securityholder affected. When a Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.

SECTION 5.05. Control by Majority. The Holders of a
majority in Principal Amount of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 6.01, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.

SECTION 5.06. Limitation on Suits. A Securityholder may
not pursue any remedy with respect to this Indenture or the Securities unless:

(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;

(2) the Holders of at least 25% in Principal Amount of the
Securities make a written request to the Trustee to pursue the
remedy;

(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;

(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and

(5) the Holders of a majority of Principal Amount of the
Securities do not give the Trustee a direction inconsistent
with the request during such 60-day period.

A Securityholder may not use this Indenture to prejudice
the rights of another Securityholder or to obtain a preference or priority over
another Securityholder.

SECTION 5.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.

SECTION 5.08. Collection Suit by Trustee. If an Event of
Default in payment of interest or principal specified in Section 5.01(1) or (2)
occurs and is continuing, the Trustee
<PAGE> 32
PAGE 31

may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount of principal and interest remaining unpaid
(together with interest on such unpaid interest as provided in Section 3.01, to
the extent lawful) and the amounts provided for in Section 6.07.

SECTION 5.09. Trustee May File Proofs of Claim. The
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relative to the Company,
its creditors or its property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 6.07.

SECTION 5.10. Priorities. If the Trustee collects any
money pursuant to this Article 5, it shall pay out the money in the following
order:

FIRST: to the Trustee for amounts due under Section 6.07;

SECOND: to Securityholders for amounts due and unpaid on
the Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and

THIRD: to the Company.

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

SECTION 5.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 5.07 or a suit
by Holders of more than 10% in Principal Amount of the Securities.

SECTION 5.12. Waiver of Stay or Extension Laws. The
Company (to the extent it may lawfully do so) shall not at any time insist
upon, or plead, or in any manner whatsoever
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PAGE 32

claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.

ARTICLE 6

Trustee

SECTION 6.01. Duties of Trustee. (a) If an Event of
Default has occurred and is continuing, the Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.

(b) Except during the continuance of an Event of Default:

(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of
this Indenture.

(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:

(1) this paragraph does not limit the effect of paragraph
(b) of this Section;

(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and

(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.05.

(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
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PAGE 33

(e) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company.

(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.

(g) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.

SECTION 6.02. Rights of Trustee. (a) The Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officers' Certificate or Opinion of Counsel, subject to Section
6.02(e).

(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.

(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers.

(e) The Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.

SECTION 6.03. Individual Rights of Trustee. The Trustee
in its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 6.10 and 6.11.
<PAGE> 35
PAGE 34

SECTION 6.04. Trustee's Disclaimer. The Trustee shall not
be responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in the Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.

SECTION 6.05. Notice of Defaults. If a Default occurs and
is continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security), the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in
the interests of Securityholders.

SECTION 6.06. Reports by Trustee to Holders. Prior to
November 1 in each year, the Trustee shall mail to each Securityholder a brief
report dated as of the preceding September 1 that complies with TIA Section
313(a), if so required by such Section of the TIA. The Trustee also shall
comply with TIA Section 313(b).

A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange on which
the Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any
delisting thereof.

SECTION 6.07. Compensation and Indemnity. The Company
shall pay to the Trustee from time to time reasonable compensation for its
services, including those arising in the Trustee's performance of its duties
under Sections 5.02, 5.03 and 5.08 hereof, and to the extent permitted by law,
Section 5.09 hereof. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company shall indemnify the Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Company
promptly of any claim for which it believes it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee may
have separate counsel and the Company shall pay the reasonable fees and
expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense to the extent incurred by the
Trustee through the Trustee's own willful misconduct, negligence or bad faith.
<PAGE> 36
PAGE 35

To secure the Company's payment obligations in this
Section, the Trustee shall have a Lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal of and interest on particular Securities.

The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture.

For purposes of this Section, the term "Trustee" shall
include any predecessor Trustee, provided that any Trustee hereunder shall not
be liable for the willful misconduct, negligence or bad faith of any other
Trustee hereunder.

SECTION 6.08. Replacement of Trustee. The Trustee may
resign at any time by so notifying the Company. The Holders of a majority in
Principal Amount of the Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:

(1) the Trustee fails to comply with Section 6.10;

(2) the Trustee is adjudged bankrupt or insolvent;

(3) a receiver or other public officer takes charge of the
Trustee or its property; or

(4) the Trustee otherwise becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists
in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.

A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the
Lien provided for in Section 6.07.

If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in Principal Amount of the Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
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PAGE 36

If the Trustee fails to comply with Section 6.10, any
Securityholder (subject to compliance with TIA Section 310(b)(iii)) may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 6.07 shall continue for
the benefit of the retiring Trustee.

SECTION 6.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.

SECTION 6.10. Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report. The Trustee shall comply
with TIA Section 310(b).

SECTION 6.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.

ARTICLE 7

Discharge of Indenture; Defeasance

SECTION 7.01. Discharge of Liability on Securities;
Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.09) for
cancellation or (ii) all outstanding Securities have become due and payable and
the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity all outstanding Securities, including interest thereon (other than
Securities replaced pursuant to Section 2.09), and if in either case the
Company pays all other sums payable hereunder by the
<PAGE> 38
PAGE 37

Company, then this Indenture shall, subject to Section 7.01(c), cease to be of
further effect. The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company accompanied by an Officers' Certificate
and an Opinion of Counsel.

(b) Subject to Sections 7.01(c) and 7.02, the Company at
any time may terminate (i) all its obligations under this Indenture with
respect to the Securities of a series ("Legal Defeasance Option") or (ii) its
obligations under Sections 3.03 and 3.04 and the operation of Section 5.01(4)
("Covenant Defeasance Option") with respect to a series of Securities. The
Company may exercise its Legal Defeasance Option notwithstanding its prior
exercise of its Covenant Defeasance Option.

If the Company exercises its Legal Defeasance Option,
payment of the Securities of such series may not be accelerated because of an
Event of Default. If the Company exercises its Covenant Defeasance Option,
payment of the Securities of such series may not be accelerated because of an
Event of Default specified in Section 5.01(4).

Upon satisfaction of the conditions set forth herein and
upon request of the Company, the Trustee shall acknowledge in writing the
discharge of those obligations that the Company terminates.

(c) Notwithstanding clauses (a) and (b) above, the
Company's obligations with respect to such series in Sections 2.05, 2.06, 2.07,
2.08, 2.09, 6.07, 6.08, 7.03 and 7.04 shall survive until the Securities of
such series have been paid in full. Thereafter, the Company's obligations in
Sections 6.07 and 7.04 with respect to such series shall survive.

SECTION 7.02. Conditions to Defeasance. The Company may
exercise its Legal Defeasance Option or its Covenant Defeasance Option only if:

(1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Securities of the series to
be defeased to maturity or redemption, as the case may be;

(2) the Company delivers to the Trustee a certificate from
a nationally recognized firm of independent accountants
expressing its opinion that the payments of principal and
interest when due and without reinvestment on the deposited
U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts
(but, in the case of the Legal Defeasance Option only, not
more than such amounts) as will be sufficient to pay principal
and interest when due on all the Securities of such series to
maturity or redemption, as the case may be;

(3) in the case of the Legal Defeasance Option, 91 days
pass after the deposit is made and during the 91-day period
no Default specified in Section 5.01(5) or (6) occurs which is
continuing at the end of the period;
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PAGE 38

(4) no Default has occurred and is continuing on the date
of such deposit and after giving effect thereto; and

(5) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the
Securities of such series as contemplated by this Article 7
have been complied with.

Before or after a deposit, the Company may make
arrangements satisfactory to the Trustee for the redemption of Securities at a
future date in accordance with Article 9.

SECTION 7.03. Application of Trust Money. The Trustee
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to this Article 7. It shall apply the deposited money and the money
from U.S. Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of and interest on the relevant
Securities.

SECTION 7.04. Repayment to Company. The Trustee and the
Paying Agent shall promptly turn over to the Company upon request any excess
money or securities held by them at any time not required for the payment of
the Securities.

With respect to the money or securities held under Sections
7.01 and 7.02, in determining whether such money or securities are excess, the
Trustee may rely on the certificate provided to it under Section 7.02(2).

Subject to any applicable abandoned property law, the
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed
for two years, and, thereafter, Securityholders entitled to the money must look
to the Company for payment as general creditors.

ARTICLE 8

Amendments

SECTION 8.01. Without Consent of Holders. The Company and
the Trustee may amend this Indenture or the Securities without notice to or
consent of any Securityholder:

(1) to cure any ambiguity, omission, defect or
inconsistency;

(2) to comply with Article 4;

(3) to provide for uncertificated Securities in addition to
or in place of certificated Securities; provided, however,
that the uncertificated Securities are issued in registered
<PAGE> 40
PAGE 39

form for purposes of Section 163(f) of the Internal Revenue
Code of 1986, as amended, or in a manner such that the
uncertificated Securities are described in Section
163(f)(2)(B) of the Internal Revenue Code of 1986, as amended;

(4) to add guarantees with respect to the Securities;

(5) to add to the covenants of the Company for the benefit
of the Holders or to surrender any right or power herein
conferred upon the Company;

(6) to comply with any requirements of the SEC in
connection with qualifying this Indenture under the TIA; or

(7) to make any change that does not adversely affect the
rights of any Securityholder in any material respect.

After an amendment under this Section becomes effective,
the Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.

SECTION 8.02. With Consent of Holders. The Company and
the Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities. However, without the consent
of each Securityholder affected, an amendment may not:

(1) reduce the amount of Securities whose Holders must
consent to an amendment;

(2) reduce the rate of or extend the time for payment of
interest on any Security;

(3) reduce the principal of or extend the fixed maturity of
any Security;

(4) reduce the premium payable upon the redemption of any
Security or change the time at which any Security may or shall
be redeemed;

(5) make any Security payable in money other than that
stated in the Security; or

(6) make any change in Section 5.04 or this Section;

and, provided further, that in case more than one series of Securities (or
Securities of a single series which have different Terms) shall be outstanding
under this Indenture, and any such proposed amendment shall affect the rights
of Holders of the Securities of one or more series (or Securities of a single
series which have different Terms) and shall not affect the rights of Holders
of the Securities of one or more of the other series (or Securities of a
single series which have

<PAGE> 41
PAGE 40

different Terms), then only Holders of Securities to be affected shall have
authority or be required to consent to or approve such amendment. Any waiver
of a default provided for in Section 5.04 shall be deemed to affect the
Securities of all series, and, subject to the foregoing, any modification of
the provisions of any sinking fund or covenant established in respect of
Securities of a particular series (or Securities of a single series having the
same Terms) shall be deemed to affect only such Securities.

It shall not be necessary for the consent of the Holders
under this Section 8.02 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent approves the substance
thereof.

After an amendment under this Section becomes effective,
the Company shall mail to Holders of the affected Securities a notice briefly
describing such amendment. The failure to give such notice to all
Securityholders (or all Holders of the affected Securities), or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.

SECTION 8.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.

SECTION 8.04. Revocation and Effect of Consents and
Waivers. A consent to an amendment or any other action hereunder or a waiver
by a Holder of a Security shall bind the Holder and every subsequent Holder of
that Security or portion of the Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent or waiver is not
made on the Security. However, any such Holder or subsequent Holder may revoke
the consent or waiver as to such Holder's Security or portion of the Security
if the Trustee receives the notice of revocation before the date the amendment
or waiver becomes effective. After an amendment or waiver becomes effective,
it shall bind every Securityholder.

The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Securityholders entitled to take
any action under this Indenture by vote or consent. Such record date shall be
the later of 30 days prior to the first solicitation of such consent or vote or
the date of the most recent list of Holders of the affected Securities
furnished to the Trustee pursuant to Section 2.07 prior to such solicitation.
If a record date is fixed, those persons who were Securityholders at such
record date (or their duly designated proxies), and only those persons, shall
be entitled to take such action by vote or consent or to revoke any vote or
consent previously given, whether or not such persons continue to be
Securityholders after such record date.

SECTION 8.05. Notation on or Exchange of Securities. If
an amendment changes the terms of a Security, the Trustee may require the
Holder of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new
<PAGE> 42
PAGE 41

Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.

SECTION 8.06. Trustee To Sign Amendments. The Trustee
shall sign any amendment authorized pursuant to this Article 8 if the amendment
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 6.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.

ARTICLE 9

Redemption

SECTION 9.01. Applicability. Securities of any series
which are redeemable before their final maturity shall be redeemable in
accordance with their Terms and (except as otherwise specified as contemplated
by Section 2.01 for Securities of any series) in accordance with this Article.

SECTION 9.02. Notice to Trustee. The Company may, with
respect to any series of Securities (or Securities of a series having the same
Terms), reserve the right to redeem and pay such Securities or any part
thereof, or may covenant to redeem and pay the series of Securities (or
Securities of a series having the same Terms) or any part thereof, before
maturity at such time and on such terms as provided for in such Securities. If
a series of Securities (or Securities of a series having the same Terms) is
redeemable and the Company wants or is obligated to redeem all or part of the
series of Securities (or Securities of a series having the same Terms) pursuant
to the Terms of such Securities, the Company shall notify the Trustee of the
redemption date and the Principal Amount of the series of Securities (or
Securities of a series having the same Terms) to be redeemed. The Company
shall give such notice at least 60 days before the redemption date (or such
shorter notice as may be acceptable to the Trustee in its sole discretion).

SECTION 9.03. Selection of Securities To Be Redeemed. If
less than all the Securities of a series (or Securities of a series having the
same Terms) are to be redeemed, the Trustee, not more than 60 days prior to the
redemption date, shall select the Securities of the series (or Securities of a
series having the same Terms) to be redeemed pro rata or by lot or by such
other method as the Trustee shall deem fair and appropriate. The Trustee shall
make the selection from Securities that are outstanding and that have not
previously been called for redemption. Securities of the series (or Securities
of a series having the same Terms) and portions of them selected by the Trustee
shall be in amounts of $1,000 or integral multiples of $1,000 or with respect
to Securities of any Series issuable in other denominations pursuant to Section
2.01(8), in amounts equal to the minimum principal denomination for each such
series
<PAGE> 43
PAGE 42

and in integral multiples thereof. Provisions of this Indenture that apply to
Securities of that series (or Securities of a series having the same Terms)
called for redemption also apply to portions of Securities of that series (or
Securities of a series having the same Terms) called for redemption. The
Trustee shall promptly notify the Company in writing of the Securities selected
for redemption and, in the case of any Securities selected for partial
redemption, the Principal Amount thereof to be redeemed.

SECTION 9.04. Notice of Redemption. (a) At least 30 days
but not more than 60 days before a redemption date, unless a shorter period is
specified in the Terms of the Securities to be redeemed, the Company shall
cause to be mailed a notice of redemption by first-class mail to each Holder
of Securities that are to be redeemed.

(b) All notices of redemption shall identify the
Securities to be redeemed and shall state:

(1) the redemption date;

(2) the redemption price and interest, if any, payable upon
such redemption;

(3) if less than all the outstanding Securities of a series
(or Securities of a series having the same Terms) are to be
redeemed, the identification (and, in the case of partial
redemption, the Principal Amounts) of the particular
Securities to be redeemed;

(4) the name and address of the Paying Agent;

(5) that the Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption
price; and

(6) that interest on Securities called for redemption
ceases to accrue on and after the redemption date.

(c) If at the time of any notice of redemption the Company
shall not have deposited or caused to be deposited with the Trustee moneys
sufficient to redeem all the Debentures called for redemption, such notice
shall state that it is subject to the deposit of the redemption moneys with the
Trustee not later than the opening of business on the redemption date and shall
be of no effect unless such moneys are so deposited. If such moneys are not
deposited by such date and time, the Trustee shall promptly notify the holders
of all Debentures called for redemption of such fact.

At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense.

SECTION 9.05. Effect of Notice of Redemption. Once notice
of redemption is mailed, Securities called for redemption become due and
payable on the redemption date at the redemption price. Any failure to mail
notice of redemption or any defect therein shall not affect the redemption of
any other Securities called for redemption. Upon surrender to the Paying Agent
of such Securities, such Securities shall be paid at the redemption price plus
accrued interest to the redemption date, but installments of interest due on or
prior to the redemption date will be payable to the Holders of such Securities
of record at the close of business on the relevant record dates, unless
otherwise specified in the Terms of such Securities.
<PAGE> 44
PAGE 43

SECTION 9.06. Deposit of Redemption Price. On or before
the redemption date, the Company shall deposit with the Paying Agent money
sufficient to pay the redemption price of and interest accrued to the
redemption date on all Securities to be redeemed on that date.

SECTION 9.07. Securities Redeemed in Part. Upon surrender
of a Security that is redeemed in part, the Company shall issue and the Trustee
shall authenticate for the Holder of that Security a new Security or Securities
of the same series and terms in authorized denominations equal in aggregate
principal amount to the unredeemed portion of the Security surrendered.

ARTICLE 10

Sinking Funds

SECTION 10.01. Applicability. The provisions of this
Article shall be applicable to any sinking fund for the retirement of
Securities, except as otherwise specified as contemplated by Section 2.01 for
Securities of any series.

The minimum amount of any sinking fund payment provided for
by the Terms of any Securities is herein referred to as a "Mandatory Sinking
Fund Payment", and any payment in excess of such minimum amount provided for by
the terms of such Securities is herein referred to as an "Optional Sinking Fund
Payment". If provided for by the Terms of Securities, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 10.02.
Each sinking fund payment shall be applied to the redemption of Securities of
any series (or Securities of a series having the same Terms) as provided for by
the Terms of such Securities.

SECTION 10.02. Satisfaction of Sinking Fund Payments with
Securities. The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities to be made pursuant to the Terms of
such Securities as provided for by such Terms, (1) deliver outstanding
Securities of such series having the same Terms (other than any of such
Securities previously called for redemption) and (2) apply as credit Securities
of such series having the same Terms which have been redeemed either at the
election of the Company pursuant to the Terms of such Securities or through the
application of permitted Optional Sinking Fund Payments pursuant to the Terms
of such Securities, provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly. If as a result of the delivery or credit of Securities
in lieu of cash payments pursuant to this Section 10.02, the Principal Amount
of Securities to be redeemed in order to exhaust the aforesaid cash payment
shall be less than $100,000, the Trustee need not call Securities for
redemption, except upon receipt of a Company Order that such action be taken,
and such cash payment shall be held by the Trustee or a Paying Agent and
applied to the next succeeding sinking fund payment with
<PAGE> 45
PAGE 44

respect to such series of Securities (or Securities of such series having the
same Terms), provided, however, that the Trustee or such Paying Agent shall at
the request of the Company from time to time pay over and deliver to the
Company any cash payment so being held by the Trustee or such Paying Agent upon
delivery by the Company to the Trustee of Securities of that series having the
same Terms purchased by the Company having an unpaid Principal Amount equal to
the cash payment required to be released to the Company.

SECTION 10.03. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series of
Securities (or Securities of such series having the same Terms), the Company
will deliver to the Trustee an Officers' Certificate specifying the amount of
the next ensuing Mandatory Sinking Fund Payment for that series (or Securities
of such series having the same Terms) pursuant to the Terms of that series, the
portion thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by delivering and crediting
of Securities of that series (or Securities of such series having the same
Terms) pursuant to Section 10.02, and the optional amount, if any, to be added
in cash to the next ensuing Mandatory Sinking Fund Payment, and the Company
shall thereupon be obligated to pay the amount therein specified. Not less
than 30 days before each such sinking fund payment date the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 9.03 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner
provided in Section 9.04. Such notice having been duly given, the redemption
of such Securities shall be made upon the terms and in the manner stated in
Sections 9.05, 9.06 and 9.07.
<PAGE> 46
PAGE 45

ARTICLE 11

Miscellaneous

SECTION 11.01. Trust Indenture Act Controls. If any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by operation of TIA Section 318(c), the imposed duties shall control.

SECTION 11.02. Notices. Any notice or communication shall
be in writing and delivered in person or mailed by first-class mail addressed
as follows:

if to the Company: The Columbia Gas System, Inc.
20 Montchanin Road
Wilmington, DE 19807
Attention: Corporate Secretary

if to the Trustee: Marine Midland Bank
140 Broadway
New York, NY 10005
Attention: Corporate Trust
Administrator

The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.

Any notice or communication mailed to a Securityholder
shall be mailed to the Securityholder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.

Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency with
respect to other Securityholders. If a notice or communication is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.

SECTION 11.03. Communication by Holders with Other
Holders. Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).

SECTION 11.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
<PAGE> 47
PAGE 46

(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and

(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of
such counsel, all such conditions precedent have been complied
with.

SECTION 11.05. Statements Required in Certificate or
Opinion. Each certificate or opinion with respect to compliance with a
covenant or condition provided for in this Indenture shall include:

(1) a statement that the person making such certificate or
opinion has read such covenant or condition;

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

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

(4) a statement as to whether or not, in the opinion of
such person, such covenant or condition has been complied
with.

SECTION 11.06. When Securities Disregarded. In
determining whether the Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent, Securities owned by the
Company or by any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company shall be disregarded
and deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at
the time shall be considered in any such determination.

SECTION 11.07. Rules by Trustee, Paying Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Securityholders or for evidencing the due execution of consents or waivers by
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.

SECTION 11.08. Legal Holidays. A "Legal Holiday" is a
Saturday, a Sunday or a day on which banking institutions are not required to
be open in the State of New York. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not
<PAGE> 48
PAGE 47

a Legal Holiday, and no interest shall accrue for the intervening period. If a
regular record date is a Legal Holiday, the record date shall not be affected.

SECTION 11.09. Governing Law. This Indenture and the
Securities shall be governed by, and construed in accordance with, the laws of
the State of Delaware but without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.

SECTION 11.10. No Recourse Against Others. A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities of this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release shall be
part of the consideration for the issue of the Securities.

SECTION 11.11. Successors. All agreements of the Company
in this Indenture and the Securities shall bind its successors. All agreements
of the Trustee in this Indenture shall bind its successors.

SECTION 11.12. Multiple Originals. The parties may sign
any number of copies of this Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement. One signed copy is
enough to prove this Indenture.

SECTION 11.13 Table of Contents; Headings. The table of
contents and headings of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not intended to be considered a
part hereof and shall not modify or restrict any of the terms or provisions
hereof.
<PAGE> 49
PAGE 48

IN WITNESS WHEREOF, the parties have caused this Indenture
to be duly executed as of the date first written above.

THE COLUMBIA GAS SYSTEM, INC.,
Attest:

- ------------------------- ---------------------------
Title: Title:

MARINE MIDLAND BANK, as Trustee
Attest:

- ------------------------- ---------------------------
Title: Title:

<PAGE> 50
PAGE 49

STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )

On this ____ day of ______, 199_, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and
say that he resides at Wilmington, Delaware 19807; that he is Executive Vice
President of THE COLUMBIA GAS SYSTEM, INC., one of the corporations described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument bearing the corporate
name of said corporation is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his
name thereto by like order.

----------------------------
Notary Public

STATE OF ___________ )
) ss.:
COUNTY OF ___________ )

On the ____ day of ________, 199_, before me personally came
______________________, to me known, who, being by me duly sworn, did depose
and say that he resides at __________________________, and that he is an
____________________________________________ of _______________________________
, one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument bearing the corporate name of said corporation is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation; and that he signed his name thereto by like authority.

---------------------------
Notary Public

<PAGE> 1

EXHIBIT 4-R

[FORM OF SUPPLEMENTAL INDENTURE]

THE COLUMBIA GAS SYSTEM, INC.

AND

MARINE MIDLAND BANK, AS TRUSTEE

/ / SUPPLEMENTAL INDENTURE

Dated as of
Supplementing Indenture Dated as of ,

% Debentures, Series Due
<PAGE> 2
TABLE OF CONTENTS(1)

<TABLE>
<CAPTION>
PAGE
<S> <C>
PARTIES 1
RECITALS 1

ARTICLE ONE
DEFINITIONS

ARTICLE TWO

% DEBENTURES DUE

Sec.2.01. Creation of Series 2
Sec.2.02. Date of issue, maturity, interest rate, place of payment 2
Sec.2.03. Denominations 2
Sec.2.04. Redemption 2
Sec.2.05. Payment of Interest 2
Sec.2.06. Global Certificate Provisions 3
Sec.2.07. Covenant with respect to Columbia Gas Transmission Corporation 3

ARTICLE THREE
MISCELLANEOUS PROVISIONS

Sec.3.01. Execution in counterparts 4
Sec.3.02. Governing Law 5
Sec.3.03. Company Recitals 5

TESTIMONIUM 5
EXECUTION 6
ACKNOWLEDGMENTS 6

EXHIBIT A--Form of % Debenture, Series Due
</TABLE>

(1) The Table of Contents is included herein for convenience only and is
not to be considered a part of the Supplemental Indenture.
<PAGE> 3
SUPPLEMENTAL INDENTURE dated as of ________ , between THE COLUMBIA
GAS SYSTEM, INC., a corporation duly organized and existing under the laws of
the State of Delaware (hereinafter called the "Company"), having its principal
office at 20 Montchanin Road, Wilmington, Delaware 19807-0020, and Marine
Midland Bank, a banking corporation and trust company organized and existing
under the laws of the State of New York (hereinafter called the "Trustee") (the
"Supplemental Indenture").

RECITALS

WHEREAS the Company has heretofore executed and delivered to the
Trustee a certain indenture dated as of , (hereinafter called the Original
Indenture), providing for the issuance of senior debt securities of the
Company, unlimited in aggregate principal amount (hereinafter called the
Securities); and

WHEREAS ARTICLE TWO of the Original Indenture provides, among other
things, that the Securities may be issued in one or more series, the Securities
of each series maturing on such dates and bearing interest at such rates and
having such other terms and provisions as the Board of Directors of the Company
may determine prior to the authentication thereof; and

WHEREAS ARTICLES TWO and EIGHT of the Original Indenture provide,
among other things, that the Company and the Trustee may from time to time
enter into indentures supplemental thereto for the purpose of setting forth the
terms and provisions of any one or more series of Securities and for any
purpose not inconsistent with the terms of the Original Indenture, including
such additional covenants not inconsistent with the provisions of the Original
Indenture as may be agreed upon by the Company and the Trustee, or for the
purpose of curing any ambiguity or of curing, correcting or supplementing any
defective or inconsistent provision of the Original Indenture; and

WHEREAS the Company, pursuant to resolutions duly adopted by its Board
of Directors at a meeting of said Board duly called and held, has determined,
under and in accordance with the provisions of the Original Indenture, to
create a new series of Securities to be known as "% Debentures, Series Due "
(hereinafter called the Securities Due ) limited to $ in aggregate principal
amount, the further terms and provisions of which are hereinafter set forth;
and

WHEREAS the Company, pursuant to resolutions duly adopted by its Board
of Directors at a meeting of said Board duly called and held, has determined
that it is advisable to amend and supplement the Original Indenture by
providing for a record date in connection with the payment of interest to the
holders of Securities Due ; and

WHEREAS at or pursuant to resolutions adopted at said meeting of the
Board of Directors of the Company the form, terms and provisions of this
Supplemental Indenture were duly approved and the execution and delivery by the
Company of a supplemental indenture in the form approved and having the terms
and provisions so approved were duly authorized and
<PAGE> 4
directed, and there was established for the Securities Due a form substantially
as in Exhibit A and all things necessary to make the Securities Due , when
executed by the Company and authenticated by the Trustee and issued under the
Original Indenture, as supplemented by this Supplemental Indenture, the valid,
binding and legal obligations of the Company in accordance with their terms and
to make this Supplemental Indenture a valid, binding and legal agreement, have
been done and performed;

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH that, in order
to set forth the terms and provisions of the Securities Due and for and in
consideration of the premises and of the acceptance or purchase of the
Securities Due by the holders thereof, the Company covenants and agrees with
the Trustee as follows:
<PAGE> 5
ARTICLE ONE
DEFINITIONS

All terms defined in the Original Indenture referred to in the
Recitals hereto or in any of the supplements thereto referred to in such
Recitals are, unless the context otherwise requires, used herein with the same
meanings therein set forth.

ARTICLE TWO
SECURITIES DUE

SECTION 2.01. There shall be a series of Securities designated as " %
Debentures, Series Due ," the aggregate principal amount of which that
may be outstanding being limited to $, except as provided in Section 2.10 of
the Original Indenture.

The Securities Due shall be substantially in the form recited in
Exhibit A.

SECTION 2.02. The Securities Due shall be dated as provided in
Section 2.05 of this Article One; shall mature ; shall bear interest at the
rate of % per annum until paid or redeemed as herein and in the Original
Indenture provided, payable semiannually on each and to the Securityholders
in whose names such Securities Due are registered at the close of business on
or , as the case may be, next preceding such or or, if such date shall not be
a Business Day, then the next preceding Business Day (unless such Security has
been called for redemption on a date fixed for such redemption which is prior
to such interest payment date), except that if the Company shall default in the
payment of any installment of interest on any Securities Due , such interest in
default shall be paid to the Securityholders in whose names the Securities Due
are registered at the close of business on a record date established for the
payment of such defaulted interest, and interest thereon, by the Company in any
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities Due may be listed (such record date to be not less
than five days prior to the date for the payment of such defaulted interest);
and shall be payable as to both principal and interest in such coin or currency
of the United States of America as at the time of payment is legal tender for
the payment of public and private debts, at the corporate trust office of the
Trustee in the Borough of Manhattan, the City of New York. Any such defaulted
installment of interest on any Securities Due that is not paid when due shall
bear interest, to the extent lawful, at the rate per annum (expressed in basis
points) borne by such Securities plus 100 basis points.

SECTION 2.03. The Securities Due shall be issued in registered form
without coupons in the denominations of $1,000 and any integral multiple of
$1,000. Temporary Securities Due may be issued in denominations as provided
in Section 2.04 of the Original Indenture and shall be exchangeable as provided
in such temporary Securities.

SECTION 2.04. [for Securities with no redemption option]. The
Securities Due are not subject to redemption prior to maturity.
<PAGE> 6
SECTION 2.04. [for Securities with redemption option]. The
Securities Due may be redeemed prior to maturity, at the election of the
Company, as a whole at any time or in part from time to time, at the applicable
redemption price or prices (expressed in percentages of principal amount) set
forth in the tabulation under the heading "Regular Redemption Prices" in the
form of Securities Due contained in Exhibit A to this Supplemental Indenture,
with accrued interest to the date fixed for redemption.

SECTION 2.05. Each Securities Due shall be dated the date of
authentication, and shall bear interest from the interest payment date to which
interest has been paid last preceding the date thereof (unless the date thereof
is an interest payment date to which interest has been paid, in which case from
the date thereof, or unless the date thereof is prior to in which case from ).
Notwithstanding the foregoing, if the date of a Securities Due is after or ,
as the case may be, and before the following or , as the case may be, such
Securities shall bear interest from such or ; provided, however, that if and
to the extent that the Company shall default in the payment of interest due on
such or , such Securities shall bear interest from the next preceding or to
which interest has been paid or, if no interest has been paid, from.

SECTION 2.06. The Securities Due will be issued in fully registered
form and will be represented by a global certificate or certificates (the
"Global Security") registered in the name of a nominee of The Depository Trust
Company ("DTC" or the "Depositary"). The Global Security representing the
Securities Due will be deposited with, or on behalf of, the Depositary. The
Securities Due will not be exchangeable for certificates issued in
definitive, registered form at the option of the holder and, except as set
forth below, will not otherwise be issuable in definitive form.

So long as the Depositary for the Global Security, or its nominee, is
the registered owner of the Global Security, the Depositary or its nominee, as
the case may be, will be considered the sole owner or holder of the Securities
Due for all purposes under the Original Indenture and this Supplemental
Indenture. Except as provided below, beneficial owners of the Securities Due
will not be entitled to have the Securities Due registered in their names,
will not receive or be entitled to receive physical delivery of Securities Due
in definitive form and will not be considered the owners or holders thereof
under the Original Indenture and this Supplemental Indenture. Unless and until
it is exchanged in whole or in part for individual certificates evidencing the
Securities Due represented thereby, the Global Security may not be transferred
except as a whole by the Depositary for the Global Security to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by the Depositary or any nominee to a
successor Depositary or any nominee of such successor.

If the Depositary with respect to the Global Security is at any time
unwilling or unable to continue as Depositary or if at any time the Depositary
shall no longer be eligible under Section 2.01 of the Original Indenture and a
successor Depositary is not appointed by the Company within 90 days, the
Company will issue definitive certificates in exchange for the Securities Due
represented by such Global Security. In addition, the Company may at any time
and in its sole discretion determine not to use the Depositary's book-entry
system, and, in such
<PAGE> 7
event, will issue definitive certificates in exchange for the Securities Due
represented by such Global Security.

SECTION 2.07. Until the earlier of (i) the date on which none of
Columbia Gas Transmission Corporation, any successor thereto and any transferee
of the assets of Columbia Gas Transmission Corporation as an entirety (or
substantially as an entirety) (collectively "TCO"), is a Significant Subsidiary
of the Company, and (ii) the fourth anniversary of the date on which any of the
New Indenture Securities are first issued (said earlier date being the
"Covenant Expiration Date"), the Company shall, subject to applicable law and
regulation, hold not less than $600 million of First Mortgage Bonds of TCO (the
"First Mortgage Bonds") issued pursuant to and entitled to the benefits of the
TCO Indenture of Mortgage and Deed of Trust (the "TCO Mortgage"). Until the
Covenant Expiration Date, the lien in favor of the Company under the TCO
Mortgage securing the First Mortgage Bonds shall at all times (i) cover all
property and assets of TCO intended to be subject to the TCO Mortgage as in
effect on the date of this Supplemental Indenture, and (ii) be a first priority
perfected lien subject only to those exceptions that are contained in the TCO
Mortgage as in effect on the date of this Supplemental Indenture, and the
Company shall not release, or consent to any release of, any property or assets
from that lien, other than (x) as provided in the TCO Mortgage as in effect on
the date of this Supplemental Indenture and (y) releases of property and assets
in the normal course of TCO's business in connection with the sale, other
transfer or abandonment of such property or assets. Until the Covenant
Expiration Date, no other Debt of any Person shall be secured by any lien on
any property or assets of TCO except as permitted under the TCO Mortgage as in
effect on the date of this Supplemental Indenture.

Notwithstanding the foregoing, the Company shall not be in breach of
this Section 2.07(A) if the amount of the Company's holdings of First Mortgage
Bonds is less than $600 million for not more than an aggregate of 30 days after
the date of this Supplemental Indenture and prior to the Covenant Expiration
Date (the first day, subsequent to such 30th day, on which the amount of such
holdings is below $600 million being hereafter referred to as the "Trigger
Date") or (B) if on or before the sixtieth day after the Trigger Date, the
Company retires (as described below) or has previously retired Company Funded
Debt in an amount equal to 150% of the amount by which $600 million exceeds the
amount of the Company's holdings of First Mortgage Bonds on the Trigger Date,
or (C) if subsequent to the Trigger Date, the amount of the Company's holdings
of First Mortgage Bonds falls below the amount of such holdings as of the
Trigger Date or below the lowest previous amount of such holdings subsequent to
the Trigger Date (any such date, a "Further Trigger Date") and the Company
retires (as described below) or has previously retired Company Funded Debt in
an amount equal to 150% of the amount by which $600 million exceeds the amount
of such holding on the Further Trigger Date, the amount of such retirement with
respect to any Further Trigger Date to be measured for purposes of determining
compliance with this provision as of the sixtieth day after such Further
Trigger Date. The Company may "retire" Company Funded Debt by any one or more
of the following methods: (1) by cancellation of Company Funded Debt which it
acquires or reacquires, (2) by defeasance of Company Funded Debt in accordance
with the terms of such Company Funded Debt, (3) by a bona fide tender offer for
Company Funded Debt which, to the extent such
<PAGE> 8
tender offer is for New Indenture Securities, is for principal amounts of each
series of New Indenture Securities that are proportionate to the relative
principal amount of such series outstanding on the relevant Trigger Date or
Further Trigger Date (a tender offer for any of the New Indenture Securities at
par will be deemed to retire an equivalent amount of Company Funded Debt,
irrespective of the amount of New Indenture Securities or the amount of any
series thereof actually tendered), or (4) by repayment or prepayment of Company
Funded Debt in accordance with its terms; provided, however, that repayment or
prepayment of Company Funded Debt under a banking loan facility shall not
constitute retirement of such Debt unless the Company shall have waived or
terminated any entitlement it may have thereunder to reborrow the amounts so
repaid or prepaid. In connection with any such "retirement" of Company Funded
Debt, the Company (i) shall "retire" New Indenture Securities (treating the New
Indenture Securities as a single class) and other Company Funded Debt (treating
all such other Company Funded Debt as a single class) pro rata based on their
respective outstanding principal amounts on the relevant Trigger Date or
Further Trigger Date or (ii) may, at its option, "retire" a greater principal
amount of New Indenture Securities than is determined in accordance with the
foregoing clause (i). The foregoing covenant shall not represent a limit on
the amount of Company Funded Debt or Funded Debt of TCO that may be outstanding
from time to time.

"Company Funded Debt" means all Debt (other than debt under a bank
loan commonly referred to as a "revolving credit facility") created, assumed or
guaranteed by the Company which matures by its terms, or is renewable at the
option of the Company to a date, more than one year after the date of the
original creation, assumption or guarantee of such Debt by the Company.

"New Indenture Securities" means (i) the Securities Due , and (ii) the
Company's % Debentures, Series Due , % Debentures, Series Due , % Debentures,
Series Due , % Debentures, Series Due , % Debentures, Series Due and %
Debentures, Series Due , each issued under the Original Indenture.

"TCO Indenture of Mortgage and Deed of Trust" means the Indenture of
Mortgage and Deed of Trust, dated August 30, 1985, between Columbia Gas
Transmission Corporation and Wilmington Trust, as amended or restated from time
to time.

ARTICLE THREE
MISCELLANEOUS PROVISIONS

SECTION 3.01. This Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

SECTION 3.02. This Supplemental Indenture and each of the Securities
Due shall be deemed to be a contract made under the laws of the State of New
York and for all purposes shall be construed in accordance with and governed by
the laws of said State.
<PAGE> 9
SECTION 3.03. The recitals contained herein shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representation as to the validity or
sufficiency of this Supplemental Indenture.
<PAGE> 10
IN WITNESS WHEREOF, The Columbia Gas System, Inc. has caused this
Supplemental Indenture to be executed in its corporate name by its Chairman of
the Board or its President or one of its Vice Presidents or its Treasurer, and
its corporate seal to be hereunto affixed and to be attested by its Secretary
or one of its Assistant Secretaries, and [Trustee] has caused this Supplemental
Indenture to be executed in its corporate name and its corporate seal to be
hereunto affixed by one of its Trust Officers and to be attested by one of its
Assistant Secretaries, all as of ___________________.

THE COLUMBIA GAS SYSTEM, INC.

By:
-----------------------------------
Attest:
---------------------------

[CORPORATE SEAL]

[Trustee] MARINE MIDLAND BANK

By:
-----------------------------------

Attest:
---------------------------

[CORPORATE SEAL]
<PAGE> 11
STATE OF DELAWARE
ss:
New Castle County

On the of in the year before me personally came , to me known, who,
being by me duly sworn, did depose and say that he resides at Wilmington,
Delaware 19807; that he is of THE COLUMBIA GAS SYSTEM, INC., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument
bearing the corporate name of said corporation is such corporate seal; that it
was so affixed by order of the Board of Directors of said corporation; and that
he signed his name thereto by like order.

(NOTARIAL SEAL)

STATE OF
ss:
County of

On the of , in the year , before me personally came to me known,
who, being by me duly sworn, did depose and say that he resides at , ; that she
is a Trust Officer of , one of the corporations described in and which executed
the foregoing instrument; that she knows the seal of said corporation; that the
seal affixed to said instrument bearing the corporate name of said corporation
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that she signed her name thereto by like
authority.

(NOTARIAL SEAL)
<PAGE> 12
EXHIBIT A
TO SUPPLEMENTAL INDENTURE

FORM OF DEBENTURE
(FACE)

Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
issuer of its agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name
as requested by an authorized representative of The Depository Trust Company
and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered
owner hereof, Cede & Co., has an interest herein.

THE COLUMBIA GAS SYSTEM, INC.
% DEBENTURE, SERIES DUE
DUE

NO. $

THE COLUMBIA GAS SYSTEM, INC., a Delaware corporation (hereinafter
called the Company), for value received, hereby promises to pay to or
registered assigns, the sum of $ on the [] day of , at the corporate trust
office of Marine Midland Bank, Trustee under the Indenture referred to on the
reverse hereof, or its successor as such Trustee, in the Borough of Manhattan,
the City of New York, in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest thereon at the rate of % per annum in like
coin or currency, payable at said office semiannually on the [] day of and the
[] day of in each year, from the interest payment date to which interest has
been paid last preceding the date hereof (unless the date hereof is an interest
payment date to which interest has been paid, in which case from the date
hereof, or unless the date hereof is prior to , in which case from ) until the
Company's obligation with respect to the payment of such principal shall have
been discharged, such interest to be paid to the person who shall have been the
registered owner hereof at the close of business on or , as the case may be,
next preceding an interest payment date, except as otherwise provided in the
Indenture referred to on the reverse hereof. Notwithstanding, if the date of
this Debenture is after or , as the case may be, and before the immediately
following or, as the case may be, this Debenture shall bear interest from such
or ; provided, however, that if and to the extent that the Company shall
default in the payment of interest due on such or , this Debenture shall bear
interest from the next preceding or to which interest has been paid or, if no
interest has been paid, from . Any installment of interest on this Debenture
that is not paid when due shall bear interest at the rate borne by this
Debenture plus 1% per annum.

Additional provisions of this Debenture are contained on the reverse
hereof and such provisions shall for all purposes have the same effect as
though fully set forth at this place.
<PAGE> 13
This Debenture shall not be valid or become obligatory for any purpose
until it shall have been authenticated by the certificate, hereon endorsed, of
the Trustee under the Indenture.

IN WITNESS WHEREOF, The Columbia Gas System, Inc., has caused this
Debenture to be executed in its name by the facsimile signature of its Chairman
of the Board or its President or one of its Vice Presidents or its Treasurer,
and its corporate seal to be hereunto affixed, or a facsimile thereof to be
printed or engraved hereon, and to be attested by the facsimile signature of
its Secretary or one of its Assistant Secretaries.

THE COLUMBIA GAS SYSTEM, INC.

Dated: By:
------------------------------ ---------------------------------

Attest:
------------------------------
<PAGE> 14
(FORM OF TRUSTEE'S CERTIFICATE ON DEBENTURES)

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

Marine Midland Bank, as Trustee,

By
Authorized Officer

(REVERSE)
THE COLUMBIA GAS SYSTEM, INC.
% DEBENTURE, SERIES DUE
DUE

This Debenture is one of a duly authorized issue of Debentures of the
Company issuable in series, and is one of a series known as its % Debentures,
Series Due (herein called Debentures Due), all issued and to be issued under
an Indenture dated as of , in which the Debentures Due are created and
described, all executed between the Company and (herein called the Trustee),
Trustee, to which Indenture (herein called the Indenture) reference is hereby
made for a statement of the rights thereunder of the Trustee and of the holders
of the Debentures, and of the duties thereunder of the Trustee and of the
Company.

The rights and obligations of the Company and of the holders of
Debentures may be changed and modified at the request of the Company by an
indenture or indentures supplemental to the Indenture, executed pursuant to the
consent in writing of the holders of at least a majority in principal amount of
the Debentures then outstanding affected by such change or modification, all in
the manner and subject to the limitations set forth in the Indenture, provided
that no such change or modification by such supplemental indenture shall extend
the maturity of, or reduce the rate of interest on, or otherwise modify the
terms of payment of the principal of, or the premium, if any, or the interest
on, this Debenture, or reduce the percentage of Debentures the holders of which
are required to consent to any such supplemental indenture, or modify the
provision as to the holders of any series of Debentures authorized or required
to consent to any such supplemental indenture, without the express consent of
the holder hereof. Any such consent by the holder of this Debenture (unless
effectively revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this
Debenture, whether or not any notation of such consent is made upon this
Debenture.

[The Debentures Due may not be redeemed prior to maturity.]

[The Debentures Due may be redeemed, prior to maturity, at the
election of the Company, as a whole at any time, or in part from time to time,
as provided in the Indenture, at the redemption prices (expressed in
percentages of principal amount) set forth in the tabulation below under the
heading "Regular Redemption Prices":]
<PAGE> 15
<TABLE>
<S> <C>
IF REDEEMED DURING REGULAR
12 MONTHS' PERIOD REDEMPTION
COMMENCING PRICES
---------- ------
</TABLE>

In case a default, as defined in the Indenture, shall occur, the
principal of all the Debentures then outstanding may become or be declared due
and payable in the manner and with the effect provided in the Indenture. The
Indenture provides that in certain events such declaration and certain defaults
under the Indenture may be waived by the holders of a majority in principal
amount of all Debentures outstanding.

This Debenture is transferable and exchangeable as prescribed in the
Indenture by the registered holder hereof in person, or by his duly authorized
attorney, at the corporate trust office of the Trustee in said Borough of
Manhattan, upon surrender and cancellation of this Debenture, and, thereupon, a
new fully registered Debenture or Debentures Due of the same aggregate
principal amount shall be issued in exchange therefor as provided in the
Indenture. The Company and the Trustee may deem and treat the person in whose
name this Debenture is registered as the absolute owner hereof for the purpose
of receiving payment of or on account of the principal, premium, if any, and
interest (except as stated in the first paragraph on the face hereof) due
hereon and for all other purposes.

No recourse shall be had for the payment of the principal of, or the
premium, if any, or the interest on, this Debenture, or any part hereof, or for
any claim based hereon or otherwise in respect hereof, or of the indebtedness
represented hereby, or upon any obligation, covenant or agreement of the
Indenture, against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any successor corporation (either
directly or through the Company or any such successor corporation), whether by
virtue of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all liability, if any,
of that character against every such incorporator, stockholder, officer and
director being by the acceptance hereof, and as part of the consideration for
the issue hereof, expressly waived and released.

This Debenture shall be deemed to be a contract made under the laws of
the State of New York and for all purposes shall be construed in accordance
with and governed by the laws of said State.

<PAGE> 1

Exhibit 12
Page 1 of 2
THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES

Statements of Ratio of Earnings to Fixed Charges
($ in millions)

<TABLE>
<CAPTION>
Twelve Months
Ended September 30,
----------------------------
1995 1994
---- ----
<S> <C> <C>
Consolidated Income (Loss) from
Continuing Operations before Income
Taxes and Cumulative Effect of
Accounting Change . . . . . . . . . . . . 400.5 410.5

Adjustments:
Interest during construction . . . . . . - -
Distributed (Undistributed) equity
income . . . . . . . . . . . . . . . . (9.4) (1.4)
Fixed charges . . . . . . . . . . . . . 22.5 20.5
--------- ---------
Earnings Available . . . . . . . . . . 413.6 429.6
--------- ---------

Fixed Charges:
Interest on long-term and
short-term debt . . . . . . . . . . . . 0.4 0.7
Other interest . . . . . . . . . . . . . 22.1 19.8
--------- ---------
Total Fixed Charges before
Adjustments*,** . . . . . . . . . . . 22.5 20.5
--------- ---------

Adjustments:
Gain/(Loss) on reacquired debt . . . . . - -
--------- ---------
Total Fixed Charges . . . . . . . . . . 22.5 20.5
--------- ---------

Ratio of Earnings Before Taxes
to Fixed Charges . . . . . . . . . . . . 18.38 20.96
========= =========
</TABLE>

<TABLE>
<CAPTION>
Twelve Months
Ended December 31,
-------------------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Consolidated Income (Loss) from
Continuing Operations before Income
Taxes and Cumulative Effect of
Accounting Change . . . . . . . . . . . . 392.2 288.1 161.4 (1,205.8) 162.6

Adjustments:
Interest during construction . . . . . . - - - (3.4) (10.0)
Distributed (Undistributed) equity
income . . . . . . . . . . . . . . . . (0.9) (0.1) (0.1) (2.4) 2.9
Fixed charges . . . . . . . . . . . . . 14.8 101.5 13.7 139.9 182.5
--------- -------- --------- --------- ---------
Earnings Available . . . . . . . . . . 406.1 389.5 175.0 (1,071.7) 338.0
--------- -------- --------- --------- ---------

Fixed Charges:
Interest on long-term and
short-term debt . . . . . . . . . . . . 0.7 3.1 4.9 112.4 170.6
Other interest . . . . . . . . . . . . . 14.1 98.4 8.8 27.6 10.5
--------- -------- --------- --------- ---------
Total Fixed Charges before
Adjustments*,** . . . . . . . . . . . 14.8 101.5 13.7 140.0 181.1
--------- -------- --------- --------- ---------

Adjustments:
Gain/(Loss) on reacquired debt . . . . . - - - (0.1) 1.4
--------- -------- -------- --------- ---------
Total Fixed Charges . . . . . . . . . . 14.8 101.5 13.7 139.9 182.5
--------- -------- -------- --------- ---------

Ratio of Earnings Before Taxes
to Fixed Charges . . . . . . . . . . . . 27.44 3.84 12.77 N/A(a) 1.85
========== ======== ======== ========= =========
</TABLE>

(a) To achieve a one-to-one coverage, the Corporation would need an
additional $1,211.6 million of earnings.

* This amount excludes approximately $261 million interest expense not
recorded in the twelve months ended September 30, 1995, $222 million
interest expense not recorded in the twelve months ended September
30, 1994, $230 million, $210 million, $204 million and $86 million of
interest expenses not recorded for the twelve months ended 1994,
1993, 1992 and 1991, respectively. Reference is made to the
Statements of Consolidated Income for the quarterly period ended
September 30, 1995, as reported on Form 10-Q and to Note 2 of Notes
to Consolidated Financial Statements of the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994.

** This amount excludes $8.6 million of interest expense not recorded
with respect to the registrant's guarantee of LESOP Trust's
debentures for each of the twelve months ended September 30, 1995 and
September 30, 1994, respectively. Also excluded are $8.6 million,
$8.6 million, $8.6 million and $15.5 million of interest expense not
recorded with respect to the registrant's guarantee of LESOP Trust's
debentures for the twelve months ended December 31, 1994, 1993, 1992,
and 1991, respectively.
<PAGE> 2
Exhibit 12
Page 2 of 2

THE COLUMBIA GAS SYSTEM, INC. AND SUBSIDIARIES

Statements of Adjusted Ratio of Earnings to Fixed Charges
($ in millions)

<TABLE>
<CAPTION>
Twelve Months
Ended September 30,
----------------------------

1995 1994
---- ----
<S> <C> <C>
Consolidated Income (Loss) from
Continuing Operations before Income
Taxes and Cumulative Effect of
Accounting Change . . . . . . . . . . . . 400.5 410.5

Adjustments:
Interest during construction . . . . . . (5.4) (3.0)
Distributed (Undistributed) equity
income . . . . . . . . . . . . . . . . (9.4) (1.4)
Fixed charges, excluding interest not
recorded . . . . . . . . . . . . . . . 22.5 20.5
-------- ---------
Earnings Available . . . . . . . . . . 408.2 426.6
-------- ---------

Fixed Charges:
Interest on long-term and short-term
debt . . . . . . . . . . . . . . . . . 0.4 0.7
Interest not recorded *,**. . . . . . . . 269.8 230.5
Other interest . . . . . . . . . . . . . 22.1 19.8
---------- ---------
Total Fixed Charges before
Adjustments . . . . . . . . . . . . . 292.3 251.0
---------- ---------

Adjustments:
Gain/(Loss) on reacquired debt . . . . . - -
---------- ----------
Total Fixed Charges . . . . . . . . . . 292.3 251.0
---------- ----------

Ratio of Earnings Before Taxes
to Fixed Charges . . . . . . . . . . . . 1.40 1.70
======== ========
</TABLE>

<TABLE>
<CAPTION>
Twelve Months
Ended December 31,
------------------------------------------------------------------------------------

1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Consolidated Income (Loss) from
Continuing Operations before Income
Taxes and Cumulative Effect of
Accounting Change . . . . . . . . . . . . 392.2 288.1 161.4 (1,205.8) 162.6

Adjustments:
Interest during construction . . . . . . (4.1) (3.1) (4.0) (3.4) (10.0)
Distributed (Undistributed) equity
income . . . . . . . . . . . . . . . . (0.9) (0.1) (0.1) (2.4) 2.9
Fixed charges, excluding interest not
recorded . . . . . . . . . . . . . . . 14.8 101.5 13.7 139.9 182.5
--------- -------- --------- --------- ---------
Earnings Available . . . . . . . . . . 402.0 386.4 171.0 (1,071.7) 338.0
--------- -------- --------- --------- ---------

Fixed Charges:
Interest on long-term and short-term
debt . . . . . . . . . . . . . . . . . 0.7 3.1 4.9 112.4 170.6
Interest not recorded *,**. . . . . . . . 238.2 218.7 213.1 101.5 -
Other interest . . . . . . . . . . . . . 14.1 98.4 8.8 27.6 10.5
---------- -------- --------- --------- ---------
Total Fixed Charges before
Adjustments . . . . . . . . . . . . . 253.0 320.2 226.8 241.5 181.1
---------- -------- --------- --------- ---------

Adjustments:
Gain/(Loss) on reacquired debt . . . . . - - - (0.1) 1.4
--------- -------- --------- --------- ---------
Total Fixed Charges . . . . . . . . . . 253.0 320.2 226.8 241.4 182.5
--------- -------- --------- --------- ---------

Ratio of Earnings Before Taxes
to Fixed Charges . . . . . . . . . . . . 1.59 1.21 0.75 N/A(a) 1.85
========= ======== ======== ========= =========
</TABLE>

(a) To achieve a one-to-one coverage, the Corporation would need an additional
$1,313.1 million of earnings.

* This amount includes approximately $261.2 million interest expense
not recorded in the twelve months ended September 30, 1995, $221.9
million interest expense not recorded in the twelve months ended
September 30, 1994, $229.6 million, $210.1 million, $204.5 million
and $86.0 million of interest expense not recorded for the twelve
months ended 1994, 1993, 1992 and 1991, respectively. Reference is
made to the Statements of Consolidated Income for the quarterly
period ended September 30, 1995, as reported on Form 10-Q and to Note
2 of Notes to Consolidated Financial Statements of the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1994.

** This amount includes $8.6 million of interest expense not recorded
with respect to the registrant's guarantee of LESOP Trust's
debentures for each of the twelve months ended September 30, 1995 and
September 30, 1994, respectively. Also included are $8.6 million,
$8.6 million, $8.6 million, and $15.5 million of interest expense not
recorded with respect to the registrant's guarantee of LESOP Trust's
debentures for the twelve months ended December 31, 1994, 1993, 1992,
and 1991, respectively.

<PAGE> 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 9, 1995
included in the Columbia Gas System, Inc.'s Form 10-K for the year ended
December 31, 1994 and to all references to our Firm included in this
registration statement.

/s/ Arthur Andersen, LLP
---------------------------
ARTHUR ANDERSEN LLP

Dated: November 22, 1995

<PAGE> 1
EXHIBIT 25

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

WHEREAS, THE COLUMBIA GAS SYSTEM, INC., a Delaware corporation (the
"Corporation"), proposes to file with the Securities & Exchange Commission,
under the Securities Act of 1933, as amended, a registration statement (the
"Registration Statement") to register the issuance of up to $1,000,000,000 of
debt and equity securities to finance settlements pursuant to the Corporation's
Amended Plan of Reorganization ("POR") and the Amended Plan of Reorganization
of Columbia Gas Transmission Corporation; to refund certain securities issued
pursuant to the Corporation's POR; and for general corporate purposes
(collectively, the "Securities").

NOW, THEREFORE, the undersigned hereby constitutes and appoints P. M.
Schwolsky, M. W. O'Donnell, C. M. Afshar, R. E. Lowe and L. J. Bainter, and
each of them, as attorneys for him or her in his or her name, place and stead
to execute and file the Registration Statement, including the related
prospectus, with respect to the Securities and thereafter to execute and file
an amended registration statement or statements, prospectus or prospectuses or
amendments or supplements thereto, to deregister securities, to withdraw the
Registration Statement or otherwise, hereby giving and granting to said
attorneys full power and authority (including substitution and revocation) to
do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully, to all intents and purposes, as
he or she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ O. G. Richard III
------------------------

Dated: October 18, 1995
<PAGE> 2
THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

NOW, THEREFORE, the undersigned hereby constitutes and appoints O. G.
Richard III, P. M. Schwolsky, C. M. Afshar, R. E. Lowe and L. J. Bainter, and
each of them, as attorneys for him or her in his or her name, place and stead
to execute and file the Registration Statement, including the related
prospectus, with respect to the Securities and thereafter to execute and file
an amended registration statement or statements, prospectus or prospectuses or
amendments or supplements thereto, to deregister securities, to withdraw the
Registration Statement or otherwise, hereby giving and granting to said
attorneys full power and authority (including substitution and revocation) to
do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully, to all intents and purposes, as
he or she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his or her
hand on the date indicated.

/s/ M. W. O'Donnell
-----------------------

Dated: October 18, 1995
<PAGE> 3
THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

NOW, THEREFORE, the undersigned hereby constitutes and appoints O. G.
Richard III, P. M. Schwolsky, M. W. O'Donnell, C. M. Afshar and L. J. Bainter,
and each of them, as attorneys for him or her in his or her name, place and
stead to execute and file the Registration Statement, including the related
prospectus, with respect to the Securities and thereafter to execute and file
an amended registration statement or statements, prospectus or prospectuses or
amendments or supplements thereto, to deregister securities, to withdraw the
Registration Statement or otherwise, hereby giving and granting to said
attorneys full power and authority (including substitution and revocation) to
do and perform all and every act and thing whatsoever requisite and necessary
to be done in and about the premises as fully, to all intents and purposes, as
he or she might or could do if personally present at the doing thereof, hereby
ratifying and confirming all that said attorneys may or shall lawfully do, or
cause to be done, by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ R. E. Lowe
-------------------------

Dated: October 17, 1995
<PAGE> 4
THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

NOW, THEREFORE, the undersigned hereby constitutes and appoints O. G.
Richard III, P. M. Schwolsky, M. W. O'Donnell, C. M. Afshar, R. E. Lowe and L.
J. Bainter, and each of them, as attorneys for him or her in his or her name,
place and stead to execute and file the Registration Statement, including the
related prospectus, with respect to the Securities and thereafter to execute
and file an amended registration statement or statements, prospectus or
prospectuses or amendments or supplements thereto, to deregister securities, to
withdraw the Registration Statement or otherwise, hereby giving and granting to
said attorneys full power and authority (including substitution and revocation)
to do and perform all and every act and thing whatsoever requisite and
necessary to be done in and about the premises as fully, to all intents and
purposes, as he or she might or could do if personally present at the doing
thereof, hereby ratifying and confirming all that said attorneys may or shall
lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ R. F. Albosta
-----------------------

Dated: October 18, 1995
<PAGE> 5

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ Robert H. Beeby
--------------------------

Dated: October 18, 1995
<PAGE> 6

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ Wilson K. Cadman
--------------------------

Dated: October 18, 1995
<PAGE> 7

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ J. P. Heffernan
-----------------------

Dated: October 18, 1995
<PAGE> 8

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ Donald Paul Hodel
----------------------------

Dated: November 15, 1995
<PAGE> 9

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ Malcom T. Hopkins
---------------------------

Dated: October 18, 1995
<PAGE> 10

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ Malcom Jozoff
-------------------------

Dated: October 18, 1995
<PAGE> 11

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ William E. Lavery
----------------------------

Dated: October 18, 1995
<PAGE> 12

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ Gerald E. Mayo
-------------------------

Dated: October 18, 1995
<PAGE> 13

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ Douglas E. Olesen
----------------------------

Dated: October 18, 1995
<PAGE> 14

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ Ernesta G. Procope
----------------------------

Dated: October 18, 1995
<PAGE> 15

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ James R. Thomas
--------------------------

Dated: October 18, 1995
<PAGE> 16

THE COLUMBIA GAS SYSTEM, INC.

POWER OF ATTORNEY

KNOW ALL YEA BY THESE PRESENTS:

IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand
on the date indicated.

/s/ W. R. Wilson
-----------------------

Dated: October 18, 1995

<PAGE> 1
EXHIBIT 26

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE

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

CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)

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

MARINE MIDLAND BANK
(Exact name of trustee as specified in its charter)

New York 16-1057879
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)

140 Broadway, New York, N.Y. 10005-1180
(212) 658-1000 (Zip Code)
(Address of principal executive offices)

Eric Parets
Senior Vice President
140 Broadway
New York, New York 10005-1180
Tel: (212) 658-6560
(Name, address and telephone number of agent for service)

THE COLUMBIA GAS SYSTEM, INC.
(Exact name of obligor as specified in its charter)

Delaware 13-1594808
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)

20 Montchanin Road
Wilmington, Delaware 19807
(302) 429-5000 (Zip Code)
(Address of principal executive offices)

SENIOR DEBT SECURITIES
(Title of Indenture Securities)

- 12 -
<PAGE> 2
GENERAL

Item 1. General Information.

Furnish the following information as to the trustee:

(a) Name and address of each examining or supervisory authority to
which it is subject.

State of New York Banking Department.

Federal Deposit Insurance Corporation, Washington, D.C.

Board of Governors of the Federal Reserve System, Washington,
D.C.

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

Item 2. Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such
affiliation.

None.

- 13 -
<PAGE> 3
Item 16. List of Exhibits.

<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C> <C> <C>
T1A(i) * - Copy of the Organization Certificate of Marine Midland Bank.

T1A(ii) * - Certificate of the State of New York Banking Department dated December
31, 1993 as to the authority of Marine Midland Bank to commence business.

T1A(iii) - Not applicable.

T1A(iv) * - Copy of the existing By-Laws of Marine Midland Bank as adopted on January
20, 1994.

T1A(v) - Not applicable.

T1A(vi) * - Consent of Marine Midland Bank required by Section 321(b) of the Trust
Indenture Act of 1939.

T1A(vii) - Copy of the latest report of condition of the trustee (June 30, 1995),
published pursuant to law or the requirement of its supervisory or
examining authority.

T1A(viii) - Not applicable.

T1A(ix) - Not applicable.
</TABLE>

* Exhibits previously filed with the Securities and Exchange
Commission with Registration No. 33-53693 and incorporated herein
by reference thereto.

- 14 -
<PAGE> 4

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Marine Midland Bank, a banking corporation and trust company organized under
the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York and State of New York on the 3rd day of
November, 1995.

MARINE MIDLAND BANK

By: /s/ Metin Caner
-----------------------------
Metin Caner
Vice President

- 15 -
<PAGE> 5
EXHIBIT T1A (VII)

<TABLE>
<S> <C>
Board of Governors of the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance Corporation
OMB Number: 3064-0052
Office of the Comptroller of the Currency
OMB Number: 1557-0081
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Expires March 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
/ 1 /
Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.

- ------------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES--FFIEC 031

REPORT AT THE CLOSE OF BUSINESS JUNE 30, 1995 (950630)
------------
(RCRI 9999)
</TABLE>

<TABLE>
<S> <C>
This report is required by law; 12 U.S.C. Section 324 (State This report form is to be filed by banks with branches and
member banks); 12 U.S.C. Section 1817 (State nonmember consolidated subsidiaries in U.S. territories and
banks); and 12 U.S.C. Section 161 (National banks). possessions, Edge or Agreement subsidiaries, foreign
branches, consoli-dated foreign subsidiaries, or
International Banking Facilities.

NOTE: The Reports of Condition and Income must be signed by The Reports of Condition and Income are to be prepared in
an authorized officer and the Report of Condition must be accordance with Federal regulatory authority instructions.
attested to by not less than two directors (trustees) for NOTE: These instructions may in some cases differ from
State nonmember banks and three directors for State member generally accepted accounting principles.
and National Banks.

I, Gerald A. Ronning, Executive VP & Controller We, the undersigned directors (trustees), attest to the
-------------------------------------------- correctness of this Report of Condition (including the
Name and Title of Officer Authorized to Sign Report supporting schedules) and declare that it has been examined by
of the named bank do hereby declare that these Reports of us and to the best of our knowledge and belief has been
Condition and Income (including the supporting schedules) prepared in conformance with the instructions issued by the
have been prepared in conformance with the instructions appropriate Federal regulatory authority and is true and
issued by the appropriate Federal regulatory authority and correct.
are true to the best of my knowledge and believe.

/s/ James H. Cleave
-------------------------------------
Director (Trustee)

/s/ Gerald A. Ronning /s/ Northrup R. Knox
- ------------------------------------- -------------------------------------
Signature of Officer Authorized to Sign Report Director (Trustee)

07/25/95 /s/ Bernard J. Kennedy
- ------------------------------------- -------------------------------------
Date of Signature Director (Trustee)

FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
- ------------------------------------------------------------------------------------------------------------------------------------
STATE MEMBER BANK: Return the original and one copy to the NATIONAL BANKS: Return the original only in the special return
appropriate Federal Reserve District Bank. address envelope provided. If express mail is used in lieu of
the special return address envelope, return the original only
STATE NONMEMBER BANKS: Return the original only in the to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite
special return address envelope provided. If express mail is 204, Crofton, MD 21114.
used in lieu of the special return address envelope, return
the original only to the FDIC, c/o Quality Data Systems, 2127
Espey Court, Suite 204, Crofton, MD 21114.

FDIC Certificate Number 0 0 5 8 9
-- -- -- -- --
(RCRI 9030)
</TABLE>

- 16 -
<PAGE> 6

NOTICE

This form is intended to assist institutions with state publication
requirements. It has not been approved by any state banking authorities. Refer
to your appropriate state banking authorities for your state publication
requirements.

REPORT OF CONDITION

Consolidating domestic and foreign subsidiaries of the

Marine Midland Bank of Buffalo
Name of Bank City

in the state of New York, at the close of business
June 30, 1995.

<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
- ----------------------------------------------------------- -------------
<S> <C> <C>
Cash and balances due from depository
institutions:

Noninterest-bearing balances
currency and coin . . . . . . . . . . . . . . . . . . . $ 865,542
Interest-bearing balances . . . . . . . . . . . . . . . 899,767
Held-to-maturity securities . . . . . . . . . . . . . . 1,855,665
Available-for-sale securities . . . . . . . . . . . . . 43,871

Federal Funds sold and securities purchased . . . . . . . .
under agreements to resell in domestic . . . . . . . . . .
offices of the bank and of its Edge and . . . . . . . . . .
Agreement subsidiaries, and in IBFs: . . . . . . . . . . .

Federal funds sold . . . . . . . . . . . . . . . . . . . 1,236,600

Securities purchased under . . . . . . . . . . . . . . .
agreements to resell . . . . . . . . . . . . . . . . . . 236,688

Loans and lease financing receivables: . . . . . . . . . .

Loans and leases net of unearned income . . . . . . . . 12,821,266
LESS: Allowance for loan and lease . . . . . . . . . . .
losses . . . . . . . . . . . . . . . . . . . . . . . . . 487,904
LESS: Allocated transfer risk reserve . . . . . . . . . 0

Loans and lease, net of unearned . . . . . . . . . . . .
income, allowance, and reserve . . . . . . . . . . . . . 12,333,362
Trading assets . . . . . . . . . . . . . . . . . . . . . 505,035
Premises and fixed assets (including . . . . . . . . . .
capitalized leases) . . . . . . . . . . . . . . . . . . 175,557
Other real estate owned . . . . . . . . . . . . . . . . . . 18,821

Investments in unconsolidated . . . . . . . . . . . . . . .
subsidiaries and associated companies . . . . . . . . . . . 0
Customers' liability to this bank on . . . . . . . . . . .
acceptances outstanding . . . . . . . . . . . . . . . . . . 19,281
Intangible assets . . . . . . . . . . . . . . . . . . . . . 56,590
Other assets . . . . . . . . . . . . . . . . . . . . . . . 597,058
Total assets . . . . . . . . . . . . . . . . . . . . . . . 18,843,837
</TABLE>

- 17 -
<PAGE> 7

<TABLE>
<S> <C> <C>
LIABILITIES

Deposits: . . . . . . . . . . . . . . . . . . . . . . . . .
In domestic offices . . . . . . . . . . . . . . . . . . 13,282,857
Noninterest-bearing . . . . . . . . . . . . . . . . . . 3,201,517
Interest-bearing . . . . . . . . . . . . . . . . . . . . 10,081,340

In foreign offices, Edge, and Agreement . . . . . . . . . .
subsidiaries, and IBFs . . . . . . . . . . . . . . . . . . 2,063,737
Noninterest-bearing . . . . . . . . . . . . . . . . . . 0
Interest-bearing . . . . . . . . . . . . . . . . . . . . 2,063,737

Federal funds purchased and securities sold . . . . . . . .
under agreements to repurchase in domestic . . . . . . . .
offices of the bank and its Edge and . . . . . . . . . . .
Agreement subsidiaries, and in IBFs: . . . . . . . . . . .
Federal funds purchased . . . . . . . . . . . . . . . . 670,610
Securities sold under agreements to . . . . . . . . . .
repurchase . . . . . . . . . . . . . . . . . . . . . . . 296,580
Demand notes issued to the U.S. Treasury . . . . . . . . . 300,000
Trading Liabilities. . . . . . . . . . . . . . . . . . . . 33,836

Other borrowed money: . . . . . . . . . . . . . . . . . . .
With original maturity of one year . . . . . . . . . . .
or less . . . . . . . . . . . . . . . . . . . . . . . . 42,269
With original maturity of more than . . . . . . . . . .
one year . . . . . . . . . . . . . . . . . . . . . . . . 0
Mortgage indebtedness and obligations . . . . . . . . . . .
under capitalized leases . . . . . . . . . . . . . . . . . 36,162
Bank's liability on acceptances . . . . . . . . . . . . . .
executed and outstanding . . . . . . . . . . . . . . . . . 19,281
Subordinated notes and . . . . . . . . . . . . . . . . . . 225,000

Other liabilities . . . . . . . . . . . . . . . . . . . . . 289,820
Total liabilities . . . . . . . . . . . . . . . . . . . . . 17,260,152
Limited-life preferred stock and . . . . . . . . . . . . .
related surplus . . . . . . . . . . . . . . . . . . . . . . 0

EQUITY CAPITAL

Perpetual preferred stock and related . . . . . . . . . . .
surplus . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Common Stock . . . . . . . . . . . . . . . . . . . . . . . 185,000
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . 1,758,098
Undivided profits and capital reserves . . . . . . . . . . (359,413)

Net unrealized holding gains (losses) . . . . . . . . . . .
on available-for-sale securities . . . . . . . . . . . . . 0
Cumulative foreign currency translation . . . . . . . . . .
adjustments . . . . . . . . . . . . . . . . . . . . . . . . 0
Total equity capital . . . . . . . . . . . . . . . . . . . 1,583,685
Total liabilities, limited-life . . . . . . . . . . . . . .
preferred stock, and equity capital . . . . . . . . . . . . 18,843,837
</TABLE>

- 18 -