SIXTEENTH SUPPLEMENTAL INDENTURE DATED AS OF DECEMBER 16, 2004

Indenture Agreement

You are currently viewing:

This Indenture Agreement involves

CONSUMERS ENERGY CO

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: SIXTEENTH SUPPLEMENTAL INDENTURE DATED AS OF DECEMBER 16, 2004
Governing Law: Michigan Date: 3/10/2005

SIXTEENTH SUPPLEMENTAL INDENTURE DATED AS OF DECEMBER 16, 2004, Parties: consumers energy co

<PAGE>

Exhibit 4(d)(ii)

SIXTEENTH SUPPLEMENTAL INDENTURE

DATED AS OF DECEMBER 16, 2004

----------

This Sixteenth Supplemental Indenture, dated as of the 16th day of

December, 2004 between CMS Energy Corporation, a corporation duly organized and

existing under the laws of the State of Michigan (hereinafter called the

"Issuer") and having its principal office at One Energy Plaza, Jackson, Michigan

49201, and J.P. Morgan Trust Company, N.A., a national banking association

(hereinafter called the "Trustee") and having its Corporate Trust Office at 227

West Monroe St., 26th Floor, Chicago, IL 60606.

WITNESSETH:

WHEREAS, the Issuer and the Trustee (successor to NBD Bank, National

Association) entered into an Indenture, dated as of September 15, 1992 (the

"Original Indenture"), pursuant to which one or more series of debt securities

of the Issuer (the "Securities") may be issued from time to time; and

WHEREAS, Section 2.3 of the Original Indenture permits the terms of any

series of Securities to be established in an indenture supplemental to the

Original Indenture; and

WHEREAS, Section 8.1(e) of the Original Indenture provides that a

supplemental indenture may be entered into by the Issuer and the Trustee without

the consent of any Holders (as defined in the Original Indenture) of the

Securities to establish the form and terms of the Securities of any series; and

WHEREAS, The Issuer has exchanged the Original 2023 Notes for the 2023

Notes; and

WHEREAS, the Issuer has requested the Trustee to join with it in the

execution and delivery of this Sixteenth Supplemental Indenture in order to

supplement and amend the Original Indenture by, among other things, establishing

the form and terms of a series of Securities to be known as the Issuer's "3.375%

Convertible Senior Notes due 2023, Series B" (the "2023 Notes"), providing for

the issuance of the 2023 Notes and amending and adding certain provisions

thereof for the benefit of the Holders of the 2023 Notes; and

WHEREAS, the Issuer and the Trustee desire to enter into this Sixteenth

Supplemental Indenture for the purposes set forth in Sections 2.3 and 8.1(e) of

the Original Indenture as referred to above; and

WHEREAS, the Issuer has furnished the Trustee with a copy of the

resolutions of its Board of Directors certified by its Secretary or Assistant

Secretary authorizing the execution of this Sixteenth Supplemental Indenture;

and

<PAGE>

WHEREAS, all things necessary to make this Sixteenth Supplemental Indenture

a valid agreement of the Issuer and the Trustee and a valid supplement to the

Original Indenture have been done;

NOW, THEREFORE, for and in consideration of the premises and the purchase

of the 2023 Notes to be issued hereunder by holders thereof, the Issuer and the

Trustee mutually covenant and agree, for the equal and proportionate benefit of

the respective holders from time to time of the 2023 Notes, as follows:

ARTICLE I

STANDARD PROVISIONS; DEFINITIONS

SECTION 1.01. Standard Provisions. The Original Indenture together with

this Sixteenth Supplemental Indenture and all previous indentures supplemental

thereto entered into pursuant to the applicable terms thereof are hereinafter

sometimes collectively referred to as the "Indenture." All capitalized terms

which are used herein and not otherwise defined herein are defined in the

Indenture and are used herein with the same meanings as in the Indenture.

SECTION 1.02. Definitions.

(a) The following terms have the meanings set forth in the Sections hereof

set forth below:

<TABLE>

Term Section

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

<S> <C>

Additional Amounts 2.04

Additional Shares 6.06(e)

Application Period 7.06

Asset Sale 7.06

Company 2.03

Conversion Date 6.02

Conversion Rate 6.01

Conversion Value 6.13(a)

Depositary Article IX

Determination Date 6.13(b)

Distributed Assets or Securities 6.06(c)

Dividend Adjustment Amount 6.06(d)(ii)

DTC 2.03

Effective Date 2.04(d)

Events of Default 8.01

ex date 1.01(b); 2.04

Excess Proceeds 7.06

Fundamental Change Purchase Date 3.01

Fundamental Change Purchase Notice 3.03

Fundamental Change Purchase Price 3.01

Global Note Article IX

Indenture 1.01; 2.04

</TABLE>

<PAGE>

<TABLE>

Term Section

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

<S> <C>

Interest Payment Date 2.03

Issue 7.04(a)

Issuer Preamble; 2.03

Issuer Notice 5.01

Issuer Notice Date 5.01

Lien 7.02(a)

Maturity 2.03

Maximum Conversion Rate 6.06(j)

Net Share Amount 6.13(b)(ii)

Net Shares 6.13(b)(ii)

Original 2023 Notes 2.03

Original Indenture Recitals

Original Issue Date 2.03

Place of Payment 2.03

Principal Return 6.13(b)(i)

Pre-Dividend Sale Price 6.06(d)(i)

Public Acquirer Change of Control 6.06(f)

Public Acquirer Common Stock 6.06(f)

Purchase Date 2.04; 4.01(a)

Purchase Notice 4.01(a)(i)

Purchase Price 2.04

Record Date 2.03

Redemption Price 2.04

Restricted Payment 7.05(a)

Rule 144A 2.03

Securities Recitals

Securities Act 2.03

Ten Day Average Closing Stock Price 6.13(a)

Trading Exception 2.04

Trustee Preamble; 2.04

2023 Notes Recitals; 2.04

</TABLE>

(b) Section 1.1 of the Original Indenture is amended to insert the new

definitions applicable to the 2023 Notes, in the appropriate alphabetical

sequence, as follows:

"Additional Registration Defaults" means failure of the Issuer to, at

Issuer's cost and using its best efforts, amend the shelf registration statement

on Form S-3 filed with the Securities and Exchange Commission on September 24,

2004 to cover resales of 2023 Notes and cause such shelf registration to be

declared effective under the Securities Act of 1933, as amended, no later than

February 15, 2005.

"Amortization Expense" means, for any period, amounts recognized during

such period as amortization of capital leases, depletion, nuclear fuel, goodwill

and assets classified as intangible assets in accordance with generally accepted

accounting principles.

<PAGE>

"Average Life" means, as of the date of determination, with respect to any

Indebtedness, the quotient obtained by dividing (i) the sum of the products of

(x) the number of years from the date of determination to the dates of each

successive scheduled principal payment of such Indebtedness and (y) the amount

of such principal payment by (ii) the sum of all such principal payments.

"Capital Lease Obligation" of a Person means any obligation that is

required to be classified and accounted for as a capital lease on the face of a

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; 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; and

such obligation shall be deemed secured by a Lien on any property or assets to

which such lease relates.

"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 or Letter

Stock; provided that Hybrid Preferred Securities shall not be considered Capital

Stock for purposes of this definition.

"CMS Electric and Gas" means CMS Electric and Gas Company, a Michigan

corporation and wholly-owned subsidiary of Enterprises.

"CMS ERM" means CMS Energy Resource Management Company, formerly CMS MST, a

wholly-owned subsidiary of Enterprises.

"CMS Gas Transmission" means CMS Gas Transmission Company (formerly known

as CMS Gas Transmission and Storage Company), a Michigan corporation and

wholly-owned subsidiary of Enterprises.

"CMS Generation" means CMS Generation Co., a Michigan corporation and

wholly-owned subsidiary of Enterprises.

"CMS MST" means CMS Marketing, Services and Trading Company, a wholly-owned

subsidiary of Enterprises, whose name was changed to CMS Energy Resource

Management Company effective January 2004.

"Common Equity" of any Person means capital stock of such Person that is

generally entitled to (i) vote in the election of directors of such Person or

(ii) if such Person is not a corporation, vote or otherwise participate in the

selection of the governing body, partners, managers or others that will control

the management or policies of such Person.

"Consolidated Assets" means, at any date of determination, the aggregate

assets of the Issuer and its Consolidated Subsidiaries determined on a

consolidated basis in accordance with generally accepted accounting principles.

<PAGE>

"Consolidated Coverage Ratio" with respect to any period means the ratio of

(i) the aggregate amount of Operating Cash Flow for such period to (ii) the

aggregate amount of Consolidated Interest Expense for such period.

"Consolidated Current Liabilities" means, for any period, the aggregate

amount of liabilities of the Issuer and its Consolidated Subsidiaries which may

properly be classified as current liabilities (including taxes accrued as

estimated), after (i) eliminating all inter-company items between the Issuer and

any Consolidated Subsidiary and (ii) deducting all current maturities of

long-term Indebtedness, all as determined in accordance with generally accepted

accounting principles.

"Consolidated Indebtedness" means, at any date of determination, the

aggregate Indebtedness of the Issuer and its Consolidated Subsidiaries

determined on a consolidated basis in accordance with generally accepted

accounting principles; provided that Consolidated Indebtedness shall not include

any subordinated debt owned by any Hybrid Preferred Securities Subsidiary.

"Consolidated Interest Expense" means, for any period, the total interest

expense in respect of Consolidated Indebtedness of the Issuer and its

Consolidated Subsidiaries, including, without duplication, (i) interest expense

attributable to capital leases, (ii) amortization of debt discount, (iii)

capitalized interest, (iv) cash and noncash interest payments, (v) commissions,

discounts and other fees and charges owed with respect to letters of credit and

bankers' acceptance financing, (vi) net costs under Interest Rate Protection

Agreements (including amortization of discount) and (vii) interest expense in

respect of obligations of other Persons deemed to be Indebtedness of the Issuer

or any Consolidated Subsidiaries under clause (v) or (vi) of the definition of

Indebtedness, provided, however, that Consolidated Interest Expense shall

exclude (A) any costs otherwise included in interest expense recognized on early

retirement of debt and (B) any interest expense in respect of any Indebtedness

of any Subsidiary of Consumers, CMS Generation, CMS Electric and Gas, CMS Gas

Transmission, CMS ERM or any other Designated Enterprises Subsidiary, provided

that such Indebtedness is without recourse to any assets of the Issuer,

Consumers, Enterprises, CMS Generation, CMS Electric and Gas, CMS Gas

Transmission, CMS ERM or any other Designated Enterprises Subsidiary.

"Consolidated Net Income" means, for any period, the net income of the

Issuer and its Consolidated Subsidiaries determined on a consolidated basis in

accordance with generally accepted accounting principles; provided, however,

that there shall not be included in such Consolidated Net Income:

(i) any net income of any Person if such Person is not a Subsidiary, except

that (A) the Issuer's equity in the net income of any such Person for such

period shall be included in such Consolidated Net Income up to the

aggregate amount of cash actually distributed by such Person during such

period to the Issuer or a Consolidated Subsidiary as a dividend or other

distribution and (B) the Issuer's equity in a net loss of any such Person

for such period shall be included in determining such Consolidated Net

Income;

<PAGE>

(ii) any net income of any Person acquired by the Issuer or a Subsidiary in

a pooling of interests transaction for any period prior to the date of such

acquisition;

(iii) any gain or loss realized upon the sale or other disposition of any

property, plant or equipment of the Issuer or its Consolidated Subsidiaries

which is not sold or otherwise disposed of in the ordinary course of

business and any gain or loss realized upon the sale or other disposition

of any Capital Stock of any Person; and

(iv) any net income of any Subsidiary of Consumers, CMS Generation, CMS

Electric and Gas, CMS Gas Transmission, CMS ERM or any other Designated

Enterprises Subsidiary whose interest expense is excluded from Consolidated

Interest Expense, provided, however, that for purposes of this subsection

(iv), any cash, dividends or distributions of any such Subsidiary to the

Issuer shall be included in calculating Consolidated Net Income.

"Consolidated Net Tangible Assets" means, for any period, the total amount

of assets (less accumulated depreciation or amortization, allowances for

doubtful receivables, other applicable reserves and other properly deductible

items) as set forth on the most recently available quarterly or annual

consolidated balance sheet of the Issuer and its Consolidated Subsidiaries,

determined on a consolidated basis in accordance with generally accepted

accounting principles, and after giving effect to purchase accounting and after

deducting therefrom, to the extent otherwise included, the amounts of: (i)

Consolidated Current Liabilities; (ii) minority interests in Consolidated

Subsidiaries held by Persons other than the Issuer or a Restricted Subsidiary;

(iii) excess of cost over fair value of assets of businesses acquired, as

determined in good faith by the Board of Directors as evidenced by Board of

Directors resolutions; (iv) any revaluation or other write-up in value of assets

subsequent to December 31, 1996, as a result of a change in the method of

valuation in accordance with generally accepted accounting principles; (v)

unamortized debt discount and expenses and other unamortized deferred charges,

goodwill, patents, trademarks, service marks, trade names, copyrights, licenses,

organization or developmental expenses and other intangible items; (vi) treasury

stock; and (vii) any cash set apart and held in a sinking or other analogous

fund established for the purpose of redemption or other retirement of Capital

Stock to the extent such obligation is not reflected in Consolidated Current

Liabilities.

"Consolidated Net Worth" of any Person means the total of the amounts shown

on the consolidated balance sheet of such Person and its consolidated

subsidiaries, determined on a consolidated basis in accordance with generally

accepted accounting principles, as of any date selected by such Person not more

than 90 days prior to the taking of any action for the purpose of which the

determination is being made (and adjusted for any material events since such

date), as (i) the par or stated value of all outstanding Capital Stock plus (ii)

paid-in capital or capital surplus relating to such Capital Stock plus (iii) any

retained earnings or earned surplus less (A) any accumulated deficit, (B) any

amounts attributable to Redeemable Stock and (C) any amounts attributable to

Exchangeable Stock.

<PAGE>

"Consolidated Subsidiary" means any Subsidiary whose accounts are or are

required to be consolidated with the accounts of the Issuer in accordance with

generally accepted accounting principles.

"Consumers" means Consumers Energy Company, a Michigan corporation, all of

whose common stock is on the date hereof owned by the Issuer.

"Continuing Director" means a director who either was a member of the Board

of Directors on November 9, 2004 or who becomes a member of the Board of

Directors subsequent to that date and whose appointment, election or nomination

for election by the Issuer's shareholders is duly approved by a majority of the

Continuing Directors on the Board of Directors at the time of such approval,

either by a specific vote or by approval of the proxy statement issued by the

Issuer on behalf of the Board of Directors in which such individual is named as

nominee for director.

"Conversion Agent" means the office or agency designated by the Issuer

where 2023 Notes may be presented for conversion. Initially, the Conversion

Agent shall be the Trustee.

"Conversion Price" means $1,000 divided by the Conversion Rate.

"Designated Enterprises Subsidiary" means any wholly-owned subsidiary of

Enterprises formed after the date of this Sixteenth Supplemental Indenture which

is designated a Designated Enterprises Subsidiary by the Board of Directors.

"Enterprises" means CMS Enterprises Company, a Michigan corporation and

wholly-owned subsidiary of the Issuer.

"Equity Interests" means any capital stock, partnership, joint venture,

member or limited liability or unlimited liability company interest, beneficial

interest in a trust or similar entity or other equity interest or investment of

whatever nature.

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

"Exchangeable Stock" means any Capital Stock of a corporation that is

exchangeable or convertible into another security (other than Capital Stock of

such corporation that is neither Exchangeable Stock or Redeemable Stock).

"Fair Market Value" means the amount which a willing buyer would pay a

willing seller in an arm's length transaction.

A "Fundamental Change" shall be deemed to have occurred at such time after

the original issuance of the 2023 Notes as any of the following occurs: (i) the

Common Stock or other common stock into which the 2023 Notes are convertible is

neither listed for trading on a United States national securities exchange nor

approved for trading on the Nasdaq National Market or another established

automated over-the-counter trading market in the United States; (ii) a "person"

or "group" within the meaning of Section 13(d) of the Exchange Act, other than

<PAGE>

the Issuer, any Subsidiary of the Issuer or any employee benefit plan of the

Issuer or any such Subsidiary, files a Schedule TO (or any other schedule, form

or report under the Exchange Act) disclosing that such person or group has

become the direct or indirect ultimate "beneficial owner" (as such term is used

in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group

shall be deemed to have "beneficial ownership" of all shares that such person or

group has the right to acquire whether such right is exercisable immediately or

only after the passage of time) of Common Equity of the Issuer representing more

than 50% of the voting power of the Issuer's Common Equity; (iii) consummation

of any share exchange, consolidation or merger of the Issuer pursuant to which

the Common Stock will be converted into cash, securities or other property or

any sale, lease or other transfer (in one transaction or a series of

transactions) of all or substantially all of the consolidated assets of the

Issuer and its Subsidiaries, taken as a whole, to any Person (other than the

Issuer or one or more of the Issuer's Subsidiaries); provided, however, that a

transaction where the holders of the Issuer's Common Equity immediately prior to

such transaction own, directly or indirectly, more than 50% of the aggregate

voting power of all classes of Common Equity of the continuing or surviving

corporation or transferee immediately after such event shall not be a

Fundamental Change; or (iv) Continuing Directors cease to constitute at least a

majority of the Board of Directors; provided, however, that a Fundamental Change

shall not be deemed to have occurred in respect of any of the foregoing if

either (1) the Last Reported Sale Price of Common Stock for any five Trading

Days within the ten consecutive Trading Days ending immediately before the later

of the Fundamental Change or the public announcement thereof equals or exceeds

105% of the applicable Conversion Price of the Notes in effect immediately

before the Fundamental Change or the public announcement thereof (except that

this clause (1) shall not apply to the events described in Section 6.06(e)

hereof) or (2) at least 90% of the consideration (excluding cash payments for

fractional shares) in the transaction or transactions constituting the

Fundamental Change consists of shares of capital stock traded on a national

securities exchange or quoted on the Nasdaq National Market (or which shall be

so traded or quoted when issued or exchanged in connection with such Fundamental

Change) (such securities being referred to as "Publicly Traded Securities") and

as a result of such transaction or transactions the 2023 Notes become

convertible into such Publicly Traded Securities (excluding cash payments for

fractional shares).

"Hybrid Preferred Securities" means any preferred securities issued by a

Hybrid Preferred Securities Subsidiary, where such preferred securities have the

following characteristics:

(i) such Hybrid Preferred Securities Subsidiary lends substantially all of

the proceeds from the issuance of such preferred securities to the Issuer

or Consumers in exchange for subordinated debt issued by the Issuer or

Consumers, respectively;

(ii) such preferred securities contain terms providing for the deferral of

distributions corresponding to provisions providing for the deferral of

interest payments on such subordinated debt; and

(iii) the Issuer or Consumers (as the case may be) makes periodic interest

payments on such subordinated debt, which interest payments are in turn

used by the Hybrid Preferred

<PAGE>

Securities Subsidiary to make corresponding payments to the holders of the

Hybrid Preferred Securities.

"Hybrid Preferred Securities Subsidiary" means any business trust (or

similar entity) (i) all of the common equity interest of which is owned (either

directly or indirectly through one or more wholly-owned Subsidiaries of the

Issuer or Consumers) at all times by the Issuer or Consumers, (ii) that has been

formed for the purpose of issuing Hybrid Preferred Securities and (iii)

substantially all of the assets of which consist at all times solely of

subordinated debt issued by the Issuer or Consumers (as the case may be) and

payments made from time to time on such subordinated debt.

"Indebtedness" of any Person means, without duplication:

(i) the principal of and premium (if any) 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, all conditional sale obligations and all

obligations under any title retention agreement (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, bankers' acceptance or similar credit transaction

(other than obligations with respect to letters of credit securing

obligations (other than obligations described in clauses (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)

above of other Persons and all dividends of other Persons for the payment

of which, in either case, such Person is responsible or liable as obligor,

guarantor or otherwise; and

(vi) all obligations of the type referred to in clauses (i) through (v)

above of other Persons secured by any Lien on any property or asset of such

Person (whether or not such obligation is assumed by such Person), the

amount of such obligation being deemed to be the lesser of the value of

such property or assets or the amount of the obligation so secured.

"Initial Purchasers" has the meaning ascribed to such term in the Purchase

Agreement.

<PAGE>

"Interest Rate Protection Agreement" means any interest rate swap

agreement, interest rate cap agreement or other financial agreement or

arrangement designed to protect the Issuer or any Subsidiary against

fluctuations in interest rates.

"Last Reported Sale Price" of the applicable security on any date means the

closing sale price per share (or, if no closing sale price is reported, the

average of the bid and ask prices or, if more than one in either case, the

average of the average bid and the average ask prices) on that date as reported

in composite transactions for the principal U.S. securities exchange on which

the applicable security is traded or, if the applicable security is not listed

on a U.S. national or regional securities exchange, as reported by the Nasdaq

National Market. If the applicable security is not listed for trading on a U.S.

national or regional securities exchange and not reported by the Nasdaq National

Market on the relevant date, the Last Reported Sale Price shall be the last

quoted bid price for the applicable security in the over-the-counter market on

the relevant date as reported by the National Quotation Bureau or similar

organization. If the applicable security is not so quoted, the Last Reported

Sale Price will be the average of the mid-point of the last bid and ask prices

for the applicable security on the relevant date from each of at least three

nationally recognized independent investment banking firms selected by the

Issuer for this purpose.

"Letter Stock", as applied to the Capital Stock of any corporation, means

Capital Stock of any class or classes (however designated) which is intended to

reflect the separate performance of certain of the businesses or operations

conducted by such corporation or any of its subsidiaries.

"Market Price" means the average of the Last Reported Sale Prices of Common

Stock for the 20 Trading Day period ending on the applicable date of

determination (if the applicable date of determination is a Trading Day or, if

not, then on the last Trading Day prior to such applicable date of

determination), appropriately adjusted to take into account the occurrence,

during the period commencing on the first of the Trading Days during such 20

Trading Day period and ending on the applicable date of determination, of any

event that would result in an adjustment of the Conversion Rate under this

Sixteenth Supplemental Indenture.

"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the

aggregate proceeds of such Asset Sale including the fair market value (as

determined by the Board of Directors and net of any associated debt and of any

consideration other than Capital Stock received in return) of property other

than cash, received by the Issuer, net of (i) brokerage commissions and other

fees and expenses (including fees and expenses of counsel and investment

bankers) related to such Asset Sale, (ii) provisions for all taxes (whether or

not such taxes will actually be paid or are payable) as a result of such Asset

Sale without regard to the consolidated results of operations of the Issuer and

its Restricted Subsidiaries, taken as a whole, (iii) payments made to repay

Indebtedness or any other obligation outstanding at the time of such Asset Sale

that either (A) is secured by a Lien on the property or assets sold or (B) is

required to be paid as a result of such sale and (iv) appropriate amounts to be

provided by the Issuer or any Restricted Subsidiary of the Issuer as a reserve

against any liabilities associated with such Asset Sale including, without

limitation, pension and other post-employment benefit liabilities, liabilities

related to environmental matters and liabilities under any indemnification

obligations associated with such Asset Sale, all as determined in conformity

with generally accepted accounting principles and (b) with respect to any

issuance or sale or contribution in respect of Capital Stock, the aggregate

<PAGE>

proceeds of such issuance, sale or contribution, including the fair market value

(as determined by the Board of Directors and net of any associated debt and of

any consideration other than Capital Stock received in return) of property other

than cash, received by the Issuer, net of attorneys' fees, accountants' fees,

underwriters' or placement agents' fees, discounts or commissions and brokerage,

consultant and other fees incurred in connection with such issuance or sale and

net of taxes paid or payable as a result thereof, provided, however, that if

such fair market value as determined by the Board of Directors of property other

than cash is greater than $25 million, the value thereof shall be based upon an

opinion from an independent nationally recognized firm experienced in the

appraisal or similar review of similar types of transactions.

"Non-Convertible Capital Stock" means, with respect to any corporation, any

non-convertible Capital Stock of such corporation and any Capital Stock of such

corporation convertible solely into non-convertible Capital Stock other than

Preferred Stock of such corporation; provided, however, that Non-Convertible

Capital Stock shall not include any Redeemable Stock or Exchangeable Stock.

"Operating Cash Flow" means, for any period, with respect to the Issuer and

its Consolidated Subsidiaries, the aggregate amount of Consolidated Net Income

after adding thereto Consolidated Interest Expense (adjusted to include costs

recognized on early retirement of debt), income taxes, depreciation expense,

Amortization Expense and any noncash amortization of debt issuance costs, any

nonrecurring, noncash charges to earnings and any negative accretion

recognition.

"Other Rating Agency" means any one of Fitch, Inc. or Moody's Investors

Service, Inc., and any successor to any of these organizations which is a

nationally recognized statistical rating organization.

"Paying Agent" means any Person authorized by the Issuer to pay the

principal of (and premium, if any) or interest on any of the 2023 Notes on

behalf of the Issuer. Initially, the Paying Agent shall be the Trustee.

"Predecessor 2023 Note" of any particular 2023 Note means every previous

2023 Note evidencing all or a portion of the same debt as that evidenced by such

particular 2023 Note; and, for the purposes of the definition, any 2023 Note

authenticated and delivered under Section 2.9 of the Indenture in exchange for

or in lieu of a mutilated, destroyed, lost or stolen 2023 Note shall be deemed

to evidence the same debt as the mutilated, destroyed, lost or stolen 2023 Note.

"Preferred Stock", as applied to the Capital Stock of any corporation,

means Capital Stock of any class or classes (however designated) that is

preferred as to the payment of dividends, or as to the distribution of assets

upon any voluntary or involuntary liquidation or dissolution of such

corporation, over shares of Capital Stock of any other class of such

corporation; provided that Hybrid Preferred Securities shall not be considered

Preferred Stock for purposes of this definition.

"Publicly Traded Securities" has the meaning provided in the definition of

Fundamental Change.

<PAGE>

"Purchase Agreement" means that certain Purchase Agreement dated July 9,

2003 among the Issuer and the Initial Purchasers which provides for the sale by

the Issuer to the Initial Purchasers of the Original 2023 Notes.

"Redeemable Stock" means any Capital Stock that by its terms or otherwise

is required to be redeemed prior to the first anniversary of the Stated Maturity

of the outstanding 2023 Notes or is redeemable at the option of the holder

thereof at any time prior to the first anniversary of the Stated Maturity of the

outstanding 2023 Notes.

"Registrable Securities" has the meaning ascribed to such term in the

Registration Rights Agreement.

"Registration Default" has the meaning ascribed to such term in the

Registration Rights Agreement, except that Registration Default shall not

include the registration default contained in Section 2(c)(i)(1) of the

Registration Rights Agreement..

"Registration Rights Agreement" means that certain Registration Rights

Agreement, dated as of July 16, 2003, by and among the Issuer and the Initial

Purchasers.

"Regulation S" means Regulation S under the Securities Act.

"Restricted Subsidiary" means any Subsidiary (other than Consumers and its

Subsidiaries) of the Issuer which, as of the date of the Issuer's most recent

quarterly consolidated balance sheet, constituted at least 10% of the total

Consolidated Assets of the Issuer and its Consolidated Subsidiaries and any

other Subsidiary which from time to time is designated a Restricted Subsidiary

by the Board of Directors; provided that no Subsidiary may be designated a

Restricted Subsidiary if, immediately after giving effect thereto, an Event of

Default or event that, with the lapse of time or giving of notice or both, would

constitute an Event of Default would exist or the Issuer and its Restricted

Subsidiaries could not incur at least one dollar of additional Indebtedness

under Section 7.04 hereof, and (i) any such Subsidiary so designated as a

Restricted Subsidiary must be organized under the laws of the United States or

any State thereof, (ii) more than 80% of the Voting Stock of such Subsidiary

must be owned of record and beneficially by the Issuer or a Restricted

Subsidiary and (iii) such Restricted Subsidiary must be a Consolidated

Subsidiary.

"Share Price" means the price per share of Common Stock paid in connection

with a corporate transaction described in Section 6.06(e) hereof, which shall be

equal to (i) if holders of Common Stock receive only cash in such corporate

transaction, the cash amount paid per share of Common Stock and (ii) in all

other cases, the average of the Last Reported Sale Prices of Common Stock on the

five Trading Days up to but not including the Effective Date.

"Spin-off Market Price" per share of Common Stock or the Equity Interests

in a Subsidiary or other business unit of the Issuer on any day means the

average of the daily Last Reported Sale Price for the 10 consecutive Trading

Days commencing on and including the fifth Trading Day after the ex date with

respect to the issuance or distribution requiring such computations. As used

herein, the term "ex date," when used with respect to any issuance or

distribution, shall mean the first date on which the security trades regular way

on the New York

<PAGE>

Stock Exchange or such other national regional exchange or market in which the

security trades without the right to receive such issuance or distribution.

"Standard & Poor's" means Standard & Poor's Ratings Group, a division of

The McGraw-Hill Companies, Inc., and any successor thereto which is a nationally

recognized statistical rating organization, or if such entity shall cease to

rate the 2023 Notes or shall cease to exist and there shall be no such successor

thereto, any other nationally recognized statistical rating organization

selected by the Issuer which is acceptable to the Trustee.

"Subordinated Indebtedness" means any Indebtedness of the Issuer (whether

outstanding on the date of this Sixteenth Supplemental Indenture or thereafter

incurred) which is contractually subordinated or junior in right of payment to

the 2023 Notes.

"Support Obligations" means, for any Person, without duplication, any

financial obligation, contingent or otherwise, of such Person guaranteeing or

otherwise supporting any debt or other obligation of any other Person in any

manner, whether directly or indirectly, and including, without limitation, any

obligation of such Person, direct or indirect, (i) to purchase or pay (or

advance or supply funds for the purchase or payment of) such debt or to purchase

(or to advance or supply funds for the purchase of) any security for the payment

of such debt, (ii) to purchase property, securities or services for the purpose

of assuring the owner of such debt of the payment of such debt, (iii) to

maintain working capital, equity capital, available cash or other financial

statement condition of the primary obligor so as to enable the primary obligor

to pay such debt, (iv) to provide equity capital under or in respect of equity

subscription arrangements (to the extent that such obligation to provide equity

capital does not otherwise constitute debt) or (v) to perform, or arrange for

the performance of, any non-monetary obligations or non-funded debt payment

obligations of the primary obligor.

"Tax Sharing Agreement" means the Amended and Restated Agreement for the

Allocation of Income Tax Liabilities and Benefits, dated January 1, 1994, as

amended or supplemented from time to time, by and among Issuer, each of the

members of the Consolidated Group (as defined therein), and each of the

corporations that become members of the Consolidated Group.

"Trading Day" means (i) if the applicable security is listed, admitted for

trading or quoted on the New York Stock Exchange, the Nasdaq National Market or

another national security exchange, a day on which the New York Stock Exchange,

the Nasdaq National Market or another national security exchange is open for

business or (ii) if the applicable security is not so listed, admitted for

trading or quoted, any day other than a Saturday or Sunday or a day on which

banking institutions in the State of New York are authorized or obligated by

law, regulation or executive order to close.

"Trading Price" of the 2023 Notes on any date of determination means the

average of the secondary market bid quotations per $1,000 principal amount of

2023 Notes obtained by the Trustee for $5,000,000 principal amount of 2023 Notes

at approximately 3:30 p.m., New York City time, on such determination date from

three independent nationally recognized securities dealers the Issuer selects,

provided that if three such bids cannot reasonably be obtained by the

<PAGE>

Trustee, but two such bids are obtained, then the average of the two bids shall

be used, and if only one such bid can reasonably be obtained by the Trustee,

this one bid shall be used. If the Trustee cannot reasonably obtain at least one

bid for $5,000,000 principal amount of the 2023 Notes from a nationally

recognized securities dealer, then the Trading Price will be deemed to be less

than 95% of the product of the sale price of Common Stock and the then

applicable Conversion Rate.

"Voting Stock" means securities of any class or classes the holders of

which are ordinarily, in the absence of contingencies, entitled to vote for

corporate directors (or persons performing similar functions).

<PAGE>

ARTICLE II

DESIGNATION AND TERMS OF THE 2023 NOTES; FORMS

SECTION 2.01. Establishment of Series.

(a) There is hereby created a series of Securities to be known and

designated as the "3.375% Convertible Senior Notes due 2023, Series B" to be

issued in an initial aggregate principal amount of up to $150,000,000.

Additional Securities, without limitation as to amount, having substantially the

same terms as the 2023 Notes (except a different issue date, issue price and

bearing interest from the last Interest Payment Date to which interest has been

paid or duly provided for on the 2023 Notes, and, if no interest has been paid,

from December 16, 2004), may also be issued by the Issuer pursuant to the

Indenture without the consent of the existing Holders of the 2023 Notes. Such

additional Securities shall be part of the same series as the 2023 Notes. The

Stated Maturity of the 2023 Notes is July 15, 2023; the principal amount of the

2023 Notes shall be payable on such date unless the 2023 Notes are earlier

redeemed, purchased or converted in accordance with the terms of the Indenture.

(b) The 2023 Notes will bear interest from the Original Issue Date, or from

the most recent date to which interest has been paid or duly provided for on the

Original 2023 Notes, at the rate of 3.375% per annum stated therein until the

principal thereof is paid or made available for payment. Interest will be

payable semiannually on each Interest Payment Date and at Maturity, as provided

in the form of the 2023 Note in Section 2.03 hereof.

the payment of the interest on any 2023 Note payable on any Interest Payment

Date (other than at Maturity) shall be the 1st day of the calendar month in

which such Interest Payment Date occurs (whether or not a Business Day) except

that the Record Date for interest payable at Maturity shall be the date of

Maturity.

(d) The payment of the principal of, premium (if any) and interest on the

2023 Notes shall not be secured by a security interest in any property.

(e) The 2023 Notes shall be purchased by the Issuer at the option of the

Holders thereof as provided in Article III, Article IV and Article V hereof.

(f) The 2023 Notes shall be convertible in accordance with the terms of

this Sixteenth Supplemental Indenture.

(g) The 2023 Notes will not be subordinated to the payment of Senior Debt.

(h) The Issuer will not pay any additional amounts on the 2023 Notes held

by a Person who is not a U.S. person (as defined in Regulation S) in respect of

any tax, assessment or government charge withheld or deducted.

<PAGE>

(i) The events specified in Events of Default with respect to the 2023

Notes shall include the events specified in Article VIII of this Sixteenth

Supplemental Indenture. In addition to the covenants set forth in Article III of

the Original Indenture, the Holders of the 2023 Notes shall have the benefit of

the covenants of the Issuer set forth in this Sixteenth Supplemental Indenture.

SECTION 2.02. Forms Generally. The 2023 Notes and Trustee's certificates of

authentication shall be in substantially the form set forth in this Article II,

with such appropriate insertions, omissions, substitutions and other variations

as are required or permitted by the Indenture, and may have such letters,

numbers or other marks of identification and such legends or endorsements placed

thereon as may be required to comply with the rules of any securities exchange

or as may, consistently herewith, be determined by the officers executing such

2023 Notes, as evidenced by their execution thereof.

The definitive 2023 Notes shall be printed, lithographed or engraved on

steel engraved borders or may be produced in any other manner, all as determined

by the officers executing such 2023 Notes, as evidenced by their execution

thereof.

SECTION 2.03. Form of Face of 2023 Note.

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE

HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A

NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED

IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE

LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED

EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A

NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE

DEPOSITARY.

Unless this Global 2023 Note is presented by an authorized representative

of The Depository Trust Company, a New York corporation ("DTC"), to CMS Energy

Corporation or its agent for registration of transfer, exchange or payment, and

any certificate issued is registered in the name of a nominee of DTC or in such

other name as is requested by an authorized representative of DTC (and any

payment is made to such nominee of DTC or to such other entity as is requested

by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE

HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the

registered owner hereof has an interest herein.

<PAGE>

CMS ENERGY CORPORATION

3.375% CONVERTIBLE SENIOR NOTES DUE 2023, SERIES B

No. 1 $150,000,000

CUSIP No.: 125896AT7

ISIN No.: US125896AT74

CMS Energy Corporation, a corporation duly organized and existing under the

laws of the State of Michigan (herein called the "Issuer" or "Company", which

term includes any successor Person under the Indenture hereinafter referred to),

for value received, hereby promises to pay to CEDE & Co., or registered assigns,

the principal sum of One Hundred Fifty Million Dollars on July 15, 2023

("Maturity") and to pay interest thereon from December 16, 2004 (the "Original

Issue Date") or from the date interest has been paid or duly provided for on the

3.375% Convertible Senior Notes Due 2023 issued by the Issuer on July 16, 2003

(the "Original 2023 Notes") pursuant to the terms of the Thirteenth Supplemental

Indenture dated July 16, 2003 between the Issuer and the Trustee for which the

2023 Notes have been exchanged, semi-annually in arrears on January 15 and July

15, in each year, commencing on January 15, 2005 (each an "Interest Payment

Date") to the Persons in whose names the 2023 Notes are registered at the close

of business on January 1 and July 1 (each a "Record Date"), and at Maturity, at

the rate of 3.375% per annum, until the principal hereof is paid or made

available for payment. The amount of interest payable on any Interest Payment

Date shall be computed on the basis of a 360-day year of twelve 30-day months.

The interest so payable, and punctually paid or duly provided for, on any

Interest Payment Date will, as provided in such Indenture, be paid to the Person

in whose name this 2023 Note (or one or more Predecessor 2023 Notes) is

registered at the close of business on the Record Date for such interest, which

shall be the 1st day of the calendar month in which such Interest Payment Date

occurs (whether or not a Business Day) except that the Record Date for interest

payable at Maturity shall be the date of Maturity. Any such interest not so

punctually paid or duly provided for will forthwith cease to be payable to the

Holder on such Record Date and may either be paid to the Person in whose name

this 2023 Note (or one or more Predecessor 2023 Notes) is registered at the

close of business on a subsequent Record Date (which shall be not less than five

Business Days prior to the date of payment of such defaulted interest) for the

payment of such defaulted interest to be fixed by the Trustee, notice whereof

shall be given to Holders of 2023 Notes not less than 15 days preceding such

subsequent Record Date.

This 2023 Note is convertible and is subject to redemption at the option of

the Issuer and to purchase by the Issuer at the option of the Holder as

specified on the reverse of this 2023 Note.

Payment of the principal of (and premium, if any) and interest, if any, on

this 2023 Note will be made at the office or agency of the Issuer maintained for

that purpose in New York, New York (the "Place of Payment"), in such coin or

currency of the United States of America as at the time of payment is legal

tender for payment of public and private debts; provided, however, that at the

option of the Issuer payment of interest (other than interest payable at

Maturity) may be made by check mailed to the address of the Person entitled

thereto as such address shall appear

<PAGE>

in the Security Register or by wire transfer to an account designated by such

Person not later than ten days prior to the date of such payment.

Reference is hereby made to the further provisions of this 2023 Note set

forth on the reverse hereof, which further provisions shall for all purposes

have the same effect as if set forth at this place.

THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION

EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS

AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND THE COMMON STOCK ISSUABLE

UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE

ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH

PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY

MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE

SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY

AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND THE COMMON

STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR

OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER

REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A

UNDER THE SECURITIES ACT ("RULE 144A")) IN A TRANSACTION MEETING THE

REQUIREMENTS OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A

QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE

144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE

WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN

EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144

THEREUNDER (IF AVAILABLE), (IV) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE

REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (V) TO CMS ENERGY CORPORATION

OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES

ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE

SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND

EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM

IT OF THE RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A) ABOVE.

THE HOLDER OF THIS SECURITY AGREES THAT SUCH HOLDER WILL NOT ENGAGE IN

HEDGING TRANSACTIONS INVOLVING THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON

CONVERSION HEREOF UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED

FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND

OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR

REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE

RESALE OR

<PAGE>

TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL

BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH

AMENDMENT OR SUPPLEMENT.

THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS OF,

A REGISTRATION RIGHTS AGREEMENT, DATED AS OF JULY 16, 2003 ENTERED INTO BY THE

COMPANY FOR THE BENEFIT OF CERTAIN HOLDERS OF SECURITIES FROM TIME TO TIME.

Unless the certificate of authentication hereon has been executed by the

Trustee referred to on the reverse hereof by manual signature, this 2023 Note

shall not be entitled to any benefit under the Indenture or be valid or

obligatory for any purpose.

IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly

executed under its corporate seal.

Dated:

CMS ENERGY CORPORATION

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

Its: Executive Vice President and

Chief Financial Officer

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

Its: Vice President and Treasurer

SECTION 2.04. Form of Reverse of 2023 Note.

This 3.375% Convertible Senior Note due 2023, Series B is one of a duly

authorized issue of securities of the Issuer (herein called the "2023 Notes"),

issued and to be issued under an Indenture, dated as of September 15, 1992, as

supplemented by certain supplemental indentures, including the Sixteenth

Supplemental Indenture, dated as of December 16, 2004 (herein collectively

referred to as the "Indenture"), between the Issuer and J.P. Morgan Trust

Company, N.A., a national banking association (ultimate successor to NBD Bank,

National Association), as Trustee (herein called the "Trustee", which term

includes any successor trustee under the Indenture), to which Indenture and all

indentures supplemental thereto reference is hereby made for a statement of the

respective rights, limitations of rights, duties and immunities thereunder of

the Issuer, the Trustee, and the Holders of the 2023 Notes and of the terms upon

which the 2023 Notes are, and are to be, authenticated and delivered. This 2023

Note is one of the series designated on the face hereof, issued in an initial

aggregate principal amount of $150,000,000. Additional Securities, without

limitation as to amount, having substantially the same terms as the 2023 Notes

(except a different issue date, issue price and bearing interest from the last

Interest Payment Date to which interest has been paid or duly provided for on

the 2023 Notes, and, if no

<PAGE>

interest has been paid, from December 16, 2004), may also be issued by the

Issuer pursuant to the Indenture without the consent of the existing Holders of

the 2023 Notes. Such additional Securities shall be part of the same series as

the 2023 Notes.

Holders of 2023 Notes at the close of business on a Record Date will

receive payment of interest, payable on the corresponding Interest Payment Date

notwithstanding the conversion of such 2023 Notes at any time after the close of

business on such Record Date. 2023 Notes surrendered for conversion by a Holder

during the period from the close of business on any Record Date to the opening

of business on the immediately following Interest Payment Date must be

accompanied by payment of an amount equal to the interest that the Holder is to

receive on the 2023 Notes; provided, however, that no such payment need be made

if (1) the Issuer has specified a redemption date that is after a Record Date

and on or prior to the immediately following Interest Payment Date, (2) the

Issuer has specified a Purchase Date following a Fundamental Change that is

during such period or (3) any overdue interest exists at the time of conversion

with respect to such 2023 Notes to the extent of such overdue interest. The

Holders of the 2023 Notes and any Common Stock issuable upon conversion thereof

will continue to be entitled to receive Additional Amounts in accordance with

the Registration Rights Agreement.

If the principal hereof or any portion of such principal is not paid when

due (whether upon acceleration, upon the date set for payment of the Redemption

Price, upon the date set for payment of a Purchase Price or Fundamental Change

Purchase Price or upon the Stated Maturity of this 2023 Note) or if interest due

hereon or any portion of such interest is not paid when due in accordance with

the terms of this 2023 Note, then in each such case the overdue amount shall

bear interest at the rate of 3.375% per annum, compounded semiannually (to the

extent that the payment of such interest shall be legally enforceable), which

interest shall accrue from the date such overdue amount was due to the date

payment of such amount, including interest thereon, has been made or duly

provided for, all such interest shall be payable on demand.

The interest rate borne by the Registrable Securities will be increased by

0.25% per annum upon the occurrence of a Registration Default or upon the

occurrence of an Additional Registration Default, which rate will increase by an

additional 0.25% per annum if such Registration Default or Additional

Registration Default has not been cured within 90 days after the occurrence

thereof and will continue to increase by 0.25% at the beginning of each

subsequent 90-day period until all Registration Defaults and Additional

Registration Defaults have been cured ("Additional Amounts"); provided, that the

aggregate amount of any such increase in the interest rate on the Registrable

Securities shall in no event exceed 0.50% per annum. All accrued Additional

Amounts shall be paid to Holders of Registrable Securities in the same manner

and at the same time as regular payments of interest on the Registrable

Securities. Following the cure of all Registration Defaults and Additional

Registration Defaults, the accrual of Additional Amounts shall cease and the

interest rate on the Registrable Securities will revert to 3.375% per annum.

In the event of redemption of this 2023 Note in part only, a new 2023 Note

for the unredeemed portion hereof will be issued in the name of the Holder

hereof upon the cancellation hereof. No sinking fund is provided for the 2023

Notes. The 2023 Notes are redeemable for cash or check in whole, or in part, at

any time on or after July 15, 2008 at the option of the Issuer at a redemption

price ("Redemption Price") equal to 100% of the principal amount of the 2023

<PAGE>

Notes to be redeemed plus any accrued and unpaid interest (including Additional

Amounts, if any) to the redemption date. Notice of redemption at the option of

the Issuer shall be mailed at least 30 days but not more than 60 days before a

redemption date to the Trustee, the Paying Agent and each Holder of 2023 Notes

to be redeemed at the Holder's registered address. If money sufficient to pay

the Redemption Price of all 2023 Notes (or portions thereof) to be redeemed on

the redemption date is deposited with the Paying Agent prior to or on the

redemption date, on and after the redemption date interest (including Additional

Amounts, if any), if any, shall cease to accrue on such 2023 Notes or portions

thereof. 2023 Notes in denominations larger than $1,000 principal amount may be

redeemed in part but only in integral multiples of $1,000 principal amount.

Subject to the terms and conditions of the Indenture, a Holder shall have

the option to require the Issuer to purchase the 2023 Notes held by such Holder

on July 15, 2008, July 15, 2013 and July 15, 2018 (each, a "Purchase Date") at a

purchase price (the "Purchase Price") equal to 100% of the principal amount of

the 2023 Notes to be purchased plus any accrued and unpaid interest (including

Additional Amounts, if any) to but excluding such Purchase Date, upon delivery

of a Purchase Notice containing the information set forth in the Indenture, from

the opening of business on the date that is 20 Business Days prior to such

Purchase Date until the close of business on the fifth Business Day prior to

such Purchase Date and upon delivery of the 2023 Notes to the Paying Agent by

the Holder as set forth in the Indenture. The Issuer will pay the Purchase Price

in cash or by check. 2023 Notes in denominations larger than $1,000 principal

amount may be purchased in part, but only in integral multiples of $1,000

principal amount.

If a Fundamental Change shall occur at any time prior to July 15, 2008,

each Holder shall have the right, at such Holder's option and subject to the

terms and conditions of the Indenture, to require the Issuer to purchase any or

all of such Holder's 2023 Notes or any portion of the principal amount thereof

that is equal to $1,000 or an integral multiple of $1,000 on the day that is no

earlier than 60 days nor later than 90 days after the date of the Issuer Notice

of the occurrence of the Fundamental Change (subject to extension to comply with

applicable law) for a Fundamental Change Purchase Price equal to 100% of the

principal amount of 2023 Notes purchased plus accrued and unpaid interest

(including Additional Amounts, if any) to the Fundamental Change Purchase Date,

which Fundamental Change Purchase Price shall be paid by the Issuer in cash or

by check, as set forth in the Indenture.

Holders have the right to withdraw any Purchase Notice or Fundamental

Change Purchase Notice, as the case may be, by delivery to the Paying Agent of a

written notice of withdrawal in accordance with the provisions of the Indenture.

If cash sufficient to pay a Fundamental Change Purchase Price or Purchase

Price, as the case may be, of all 2023 Notes or portions thereof to be purchased

as of the Purchase Date or the Fundamental Change Purchase Date, as the case may

be, is on deposit with the Paying Agent on the Business Day following the

Purchase Date or the Fundamental Change Purchase Date, as the case may be,

interest (including Additional Amounts, if any) shall cease to accrue on such

2023 Notes (or portions thereof) on and after such date, and the Holder thereof

shall have no other rights as such (other than the right to receive the Purchase

Price or Fundamental Change Purchase Price, as the case may be, upon surrender

of such Note).

<PAGE>

Subject to the procedures set forth in the Indenture, a Holder may convert

2023 Notes into cash and shares of Common Stock on or before the close of

business on July 15, 2023 during the periods and upon satisfaction of at least

one of the conditions set forth below:

(a) in any calendar quarter (and only during such calendar quarter) if the

Last Reported Sale Price for Common Stock for at least 20 Trading Days

during the period of 30 consecutive Trading Days ending on the last Trading

Day of the previous calendar quarter is greater than or equal to 120% of

the Conversion Price per share of Common Stock on such last Trading Day;

(b) prior to Maturity during the five Business Days immediately following

any ten consecutive Trading Day period in which the Trading Price per

$1,000 principal amount of 2023 Notes (as determined following a request by

a Holder of the 2023 Notes in accordance with the procedures described in

the Indenture) for each day of that period was less than 95% of the product

of the sale price of Common Stock and the then applicable Conversion Rate

(the "Trading Exception"); provided, however, that a Holder may not convert

its 2023 Notes if the average closing sale price of Common Stock for such

ten consecutive Trading Day period is between the then current Conversion

Price and 120% of the then applicable Conversion Price; in connection with

any conversion upon satisfaction of such Trading Price condition, the

Trustee shall have no obligation to determine the Trading Price unless the

Issuer has requested such determination; and the Issuer shall have no

obligation to make such request unless the Holder provides reasonable

evidence that the Trading Price would be less than 95% of the product of

the sale price of Common Stock and the then applicable Conversion Rate; at

which time, the Issuer shall instruct the Trustee to determine the Trading

Price beginning on the next Trading Day and on each successive Trading Day

until the Trading Price is greater than or equal to 95% of the product of

the sale price of Common Stock and the then applicable Conversion Rate;

any time prior to the close of business on the second Business Day

immediately preceding the redemption date;

(d) the Issuer becomes a party to a consolidation, merger or binding share

exchange pursuant to which the Common Stock would be converted into cash or

property (other than securities), in which case a Holder may surrender 2023

Notes for conversion at any time from and after the date which is 15 days

prior to the anticipated effective date for the transaction until 15 days

after the actual effective date of such transaction; or

(e) the Issuer elects to (i) distribute to all holders of Common Stock

assets, debt securities or rights to purchase securities of the Issuer,

which distribution has a per share value as determined by the Board of

Directors exceeding 15% of the Last Reported Sale Price of a share of

Common Stock on the Trading Day immediately preceding the declaration date

for such distribution, or (ii) distribute to all holders of Common Stock

rights entitling them to purchase, for a period expiring within 60 days

after the date of such distribution, shares of Common Stock at less than

the Last Reported Sale Price of Common Stock on the Trading Day immediately

preceding the declaration date of the

<PAGE>

distribution. In the case of the foregoing clauses (i) and (ii), the Issuer

must notify the Holders at least 20 Business Days immediately prior to the

ex date for such distribution. Once the Issuer has given such notice,

Holders may surrender their 2023 Notes for conversion at any time

thereafter until the earlier of the close of business on the Business Day

immediately prior to the ex date or the Issuer's announcement that such

distribution will not take place; provided, however, that a Holder may not

exercise this right to convert if the Holder may participate in the

distribution without conversion. As used herein, the term "ex date," when

used with respect to any issuance or distribution, shall mean the first

date on which the Common Stock trades regular way on such exchange or in

such market without the right to receive such issuance or distribution.

If the Issuer engages in certain reclassifications of its Common Stock or

is a party to a consolidation, merger, binding share exchange or transfer of all

or substantially all of its assets pursuant to which Common Stock is converted

into cash, securities or other property, then, at the effective time of the

transaction, the right to convert a 2023 Note into cash and shares of Common

Stock will be changed into a right to convert a 2023 Note into the kind and

amount of cash, securities or other property which the Holder would have

received if the Holder had converted its 2023 Notes immediately prior to the

transaction. If the Issuer engages in any transaction described in the preceding

sentence, the Conversion Rate will not be adjusted. If the transaction also

constitutes a Fundamental Change, a Holder can require the Issuer to purchase

all or a portion of its 2023 Notes as described in the Indenture.

2023 Notes in respect of which a Holder has delivered a notice of exercise

of the option to require the Issuer to purchase such 2023 Notes pursuant to

Article VII or Article XIII of the Indenture may be converted only if the notice

of exercise is withdrawn in accordance with the terms of the Indenture.

The initial Conversion Rate is 93.7137 shares of Common Stock per $1,000

principal amount, subject to adjustment in certain events described in the

Indenture. The Issuer shall deliver cash or a check in lieu of any fractional

share of Common Stock.