Document:

EX-10.2

 Exhibit 10.2 

INDEMNIFICATION AGREEMENT 

This Indemnification Agreement (“Agreement”) is entered into on September 26, 2018, but is effective as of
October 9, 2018, by and between Parsley Energy, Inc., a Delaware corporation (the “Corporation”), and David Dell’Osso (“Indemnitee”). 

RECITALS: 
 WHEREAS,
directors, officers and other persons in service to corporations or business enterprises are subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the
Corporation or business enterprise itself; 
 WHEREAS, highly competent persons have become more reluctant to serve as directors, officers
or in other capacities unless they are provided with adequate protection through insurance and adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the
corporation; 
 WHEREAS, the Board of Directors of the Corporation (the “Board”) has determined that the increased
difficulty in attracting and retaining such persons is detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure such persons that there will be increased certainty of such protection in
the future; 
 WHEREAS, (i) the Amended and Restated Bylaws of the Corporation (as may be amended, the “Bylaws”)
require indemnification of the officers and directors of the Corporation, (ii) Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”) and (iii) the
Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Corporation and members of the Board, officers and other persons
with respect to indemnification; 
 WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws and the Amended and Restated
Certificate of Incorporation of the Corporation (as may be amended, the “Certificate of Incorporation”) and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefore, nor to diminish or abrogate any
rights of Indemnitee thereunder; and 
 WHEREAS, (i) Indemnitee does not regard the protection available under the Bylaws and insurance
as adequate in the present circumstances, (ii) Indemnitee may not be willing to serve or continue to serve as a director or officer of the Corporation without adequate protection, (iii) the Corporation desires Indemnitee to serve in such
capacity, and (iv) Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Corporation on the condition that he be so indemnified. 

 

 AGREEMENT: 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee do hereby covenant and
agree as follows: 
 Section 1.    Definitions. (a) As used in this Agreement: 

“Affiliate” of any specified Person shall mean any other Person controlling, controlled by or under common control with such
specified Person. 
 “Corporate Status” describes the status of a person who is or was a director, officer, employee or
agent of (i) the Corporation or (ii) any other corporation, limited liability company, partnership or joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Corporation.

 “Disinterested Director” shall mean a director of the Corporation who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee. 
 “Enterprise” shall mean the Corporation and any other
corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary. 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 

“Expenses” shall mean all reasonable costs, expenses, fees and charges, including, without limitation, attorneys’ fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include, without limitation,
(i) expenses incurred in connection with any appeal resulting from, incurred by Indemnitee in connection with, arising out of, or in respect of or relating to, any Proceeding, including, without limitation, the premium, security for, and other
costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent, (ii) for purposes of Section 12(d) hereof only, expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of
Indemnitee’s rights under this Agreement, by litigation or otherwise, (iii) any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, and
(iv) any interest, assessments or other charges in respect of the foregoing. “Expenses” shall not include “Liabilities.” 

“Indemnity Obligations” shall mean all obligations of the Corporation to Indemnitee under this Agreement, including the
Corporation’s obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement. 

  
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 “Independent Counsel” shall mean a law firm of fifty (50) or more
attorneys, or a member of a law firm of fifty (50) or more attorneys, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Corporation or
Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder; provided, however, that the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have
a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. 

“Liabilities” shall mean all claims, liabilities, damages, losses, judgments, orders, fines, penalties and other amounts
payable in connection with, arising out of, or in respect of or relating to any Proceeding, including, without limitation, amounts paid in settlement in any Proceeding and all costs and expenses in complying with any judgment, order or decree issued
or entered in connection with any Proceeding or any settlement agreement, stipulation or consent decree entered into or issued in settlement of any Proceeding. 

“Person” shall mean any individual, corporation, partnership, limited partnership, limited liability company, trust,
governmental agency or body or any other legal entity. 
 “Proceeding” shall mean any threatened, pending or completed
action, claim, suit, arbitration, alternate dispute resolution mechanism, formal or informal hearing, inquiry or investigation, litigation, inquiry, administrative hearing or any other actual, threatened or completed judicial, administrative or
arbitration proceeding (including, without limitation, any such proceeding under the Securities Act of 1933, as amended, or the Exchange Act or any other federal law, state law, statute or regulation), whether brought in the right of the Corporation
or otherwise, and whether of a civil, criminal, administrative or investigative nature, in each case, in which Indemnitee was, is or will be, or is threatened to be, involved as a party, witness or otherwise by reason of the fact that Indemnitee is
or was a director or officer of the Corporation, by reason of any actual or alleged action taken by Indemnitee or of any action on Indemnitee’s part while acting as director or officer of the Corporation, or by reason of the fact that he is or
was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, in each case whether or not serving in such capacity at
the time any liability or expense is incurred for which indemnification, reimbursement, or advancement can be provided under this Agreement 

(b)    For the purpose hereof, references to “fines” shall include any excise tax assessed with respect to any
employee benefit plan; references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a Person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Agreement. 

Section 2.    Indemnity in Third-Party Proceedings. The Corporation shall indemnify and hold harmless
Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or reasonably incurred (and, in the case of retainers, reasonably expected to be incurred) by Indemnitee or on Indemnitee’s
behalf in connection with any Proceeding (other than any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor), or any claim, issue or matter therein. 

  
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 Section 3.    Indemnity in Proceedings by or in the Right of the
Corporation. The Corporation shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in
connection with any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor, or any claim, issue or matter therein. No indemnification for Liabilities and Expenses shall be made under this Section 3 in
respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Corporation, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was
brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to such indemnification. 

Section 4.    Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any
other provisions of this Agreement, and without limiting the rights of Indemnitee under any other provision hereof, including any rights to indemnification pursuant to Sections 2 or 3 hereof, to the fullest extent permitted by applicable law,
to the extent that Indemnitee is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Corporation shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved Proceeding, claim, issue or matter. For purposes of this Section 4 and without limitation, the termination of any Proceeding or
claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. 

Section 5.    Indemnification For Expenses of a Witness. Notwithstanding any other provision of this
Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or otherwise a participant in any Proceeding to which Indemnitee is not a party, Indemnitee
shall be indemnified against all Expenses suffered or incurred (or, in the case of retainers, reasonably expected to be incurred) by Indemnitee or on Indemnitee’s behalf in connection therewith. 

Section 6.    Additional Indemnification. Notwithstanding any limitation in Sections 2, 3 or 4 hereof, the
Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Corporation to procure a
judgment in its favor) against all Liabilities and Expenses suffered or reasonably incurred by Indemnitee in connection with such Proceeding, including but not limited to: 

(a)    the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional
indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL; and 

  
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 (b)    the fullest extent authorized or permitted by any amendments to
or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors. 

Section 7.    Exclusions. Notwithstanding any provision in this Agreement, the Corporation shall not be
obligated under this Agreement to indemnify or hold harmless Indemnitee: 
 (a)    for which payment has actually been
made to or on behalf of Indemnitee under any insurance policy obtained by the Corporation except with respect to any excess beyond the amount paid under such insurance policy; 

(b)    for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of
the Corporation within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law; 

(c)    except as provided in Section 12(d) of this Agreement, in connection with any Proceeding (or any part of any
Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Corporation or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the
Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Corporation provides the indemnification, in its sole discretion, pursuant to the powers vested in the Corporation under applicable law; or 

(d)    if a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not
lawful. 
 Section 8.    Advancement. In accordance with the
pre-existing requirements of the Bylaws, and notwithstanding any provision of this Agreement to the contrary, the Corporation shall advance, to the extent not prohibited by applicable law, the Expenses
reasonably incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within thirty (30) days after the receipt by the Corporation of a statement or statements requesting such advances from time to time,
whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate
entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all Expenses reasonably incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and
forwarding statements to the Corporation to support the advances claimed. Indemnitee shall qualify for advances upon the execution and delivery to the Corporation of this Agreement, which shall constitute an undertaking providing that Indemnitee
undertakes to repay the amounts advanced to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Corporation. This Section 8 shall not apply to any claim made by Indemnitee for which indemnity is
excluded pursuant to Section 7 hereof. 

  
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 Section 9.    Procedure for Notification and Defense of
Claim. 
 (a)    Indemnitee shall promptly notify the Corporation in writing of any Proceeding with respect to which
Indemnitee intends to seek indemnification or advancement hereunder following the receipt by Indemnitee of written notice thereof. The written notification to the Corporation shall include a description of the nature of the Proceeding and the facts
underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and
is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. Any delay or failure by Indemnitee to notify the Corporation hereunder will not relieve the
Corporation from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay or failure in so notifying the Corporation shall not constitute a waiver by Indemnitee of any rights under this Agreement.
The Secretary of the Corporation shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. 

(b)    In the event Indemnitee is entitled to indemnification and/or advancement with respect to any Proceeding,
Indemnitee may, at Indemnitee’s option, (i) retain counsel selected by Indemnitee and approved by the Corporation to defend Indemnitee in such Proceeding, at the sole expense of the Corporation (which approval shall not be unreasonably
withheld, conditioned or delayed), or (ii) have the Corporation assume the defense of Indemnitee in such Proceeding, in which case the Corporation shall assume the defense of such Proceeding with counsel selected by the Corporation and approved
by Indemnitee (which approval shall not be unreasonably withheld, conditioned or delayed) within ten (10) days of the Corporation’s receipt of written notice of Indemnitee’s election to cause the Corporation to do so. If the
Corporation is required to assume the defense of any such Proceeding, it shall engage legal counsel for such defense, and the Corporation shall be solely responsible for all fees and expenses of such legal counsel and otherwise of such defense. Such
legal counsel may represent both Indemnitee and the Corporation (and any other party or parties entitled to be indemnified by the Corporation with respect to such matter) unless, in the reasonable opinion of legal counsel to Indemnitee, there is a
conflict of interest between Indemnitee and the Corporation (or any other such party or parties) or there are legal defenses available to Indemnitee that are not available to the Corporation (or any such other party or parties). Notwithstanding
either party’s assumption of responsibility for defense of a Proceeding, each party shall have the right to engage separate counsel at its own expense. The party having responsibility for defense of a Proceeding shall provide the other party
and its counsel with all copies of pleadings and material correspondence relating to the Proceeding. Indemnitee and the Corporation shall reasonably cooperate in the defense of any Proceeding with respect to which indemnification is sought
hereunder, regardless of whether the Corporation or Indemnitee assumes the defense thereof. Indemnitee may not settle or compromise any Proceeding without the prior written consent of the Corporation, which consent shall not be unreasonably
withheld, conditioned or delayed. The Corporation may not settle or compromise any Proceeding without the prior written consent of Indemnitee. 

Section 10.    Procedure Upon Application for Indemnification. 

(a)    Upon written request by Indemnitee for indemnification pursuant to Section 9(a) hereof, if any determination
by the Corporation is required by applicable law with respect to Indemnitee’s entitlement thereto, such determination shall be made (i) if Indemnitee shall request such determination be made by Independent Counsel, by Independent Counsel,
and (ii) in all other circumstances, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote

  
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of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent
Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (D) if so directed by the Board, by the stockholders of the Corporation; and, if it is so determined that Indemnitee is entitled to indemnification,
payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Corporation (irrespective of the determination as to Indemnitee’s
entitlement to indemnification) and the Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Corporation will not deny any written request for indemnification hereunder made in good faith by Indemnitee unless a
determination as to Indemnitee’s entitlement to such indemnification described in this Section 10(a) has been made. The Corporation agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully
indemnify such counsel against any and all Liabilities and Expenses arising out of or relating to this Agreement or its engagement pursuant hereto. 

(b)    In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to
Section 10(a) hereof, (i) the Independent Counsel shall be selected by the Corporation within ten (10) days of the Submission Date (the cost of such Independent Counsel to be paid by the Corporation), (ii) the Corporation shall
give written notice to Indemnitee advising it of the identity of the Independent Counsel so selected and (iii) Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Corporation
Indemnitee’s written objection to such selection. Such objection by Indemnitee may be asserted only on the ground that the Independent Counsel selected does not meet the requirements of “Independent Counsel” as defined in this
Agreement. If such written objection is made and substantiated, the Independent Counsel selected shall not serve as Independent Counsel unless and until Indemnitee withdraws the objection or a court has determined that such objection is without
merit. Absent a timely objection, the person so selected shall act as Independent Counsel. If no Independent Counsel shall have been selected and not objected to before the later of (i) thirty (30) days after the later of submission by
Indemnitee of a written request for indemnification pursuant to Section 10(a) hereof (the “Submission Date”) and (ii) ten (10) days after the final disposition of the Proceeding, each of the Corporation and Indemnitee
shall select a law firm or member of a law firm meeting the qualifications to serve as Independent Counsel, and such law firms or members of law firms shall select the Independent Counsel. Upon the due commencement of any judicial proceeding or
arbitration pursuant to Section 12(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing). 

  
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 Section 11.    Presumptions and Effect of Certain
Proceedings. 
 (a)    In making a determination with respect to entitlement to indemnification hereunder, the
person, persons or entity making such determination shall, to the fullest extent not prohibited by applicable law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification
in accordance with Section 9(a) of this Agreement, and the Corporation shall, to the fullest extent not prohibited by applicable law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or
entity of any determination contrary to that presumption. Neither the failure of the Corporation (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation (including by its directors or independent legal counsel) that Indemnitee has
not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct. 

(b)    Subject to Section 12(e) hereof, if the person, persons or entity empowered or selected under Section 10
of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Corporation of the request therefore, the requisite determination of entitlement to
indemnification shall, to the fullest extent not prohibited by applicable law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law; provided,
however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if (i) the determination is to be made by Independent Counsel and
Indemnitee objects to the Corporation’s selection of Independent Counsel and (ii) the Independent Counsel ultimately selected requires such additional time for the obtaining or evaluating of documentation or information relating thereto;
provided further, however, that such 60-day period may also be extended for a reasonable time, not to exceed an additional sixty (60) days, if the determination of entitlement to indemnification is
to be made by the stockholders of the Corporation. 
 (c)    The termination of any Proceeding or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) adversely affect the right of Indemnitee to indemnification or
create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal Proceeding, that Indemnitee had reasonable
cause to believe that Indemnitee’s conduct was unlawful. 
 (d)    Reliance as Safe Harbor. For purposes of
any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by
an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 11(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have
met the applicable standard of conduct set forth in this Agreement. 

  
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 (e)    Actions of Others. The knowledge or actions, or failure to
act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. 

Section 12.    Remedies of Indemnitee. 

(a)    Subject to Section 12(e) hereof, in the event that (i) a determination is made pursuant to
Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement is not timely made pursuant to Section 8 of this Agreement, (iii) no determination of entitlement to
indemnification shall have been made pursuant to Section 10(a) of this Agreement within ninety (90) days after receipt by the Corporation of the request for indemnification, (iv) payment of indemnification is not made pursuant to
Sections 4 or 5 or the last sentence of Section 10(a) of this Agreement within ten (10) days after receipt by the Corporation of a written request therefor, (v) payment of indemnification pursuant to Sections 2, 3 or 6 of this
Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Corporation or any other Person takes or threatens to take any action to declare
this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled
to an adjudication by a court of Indemnitee’s entitlement to such indemnification or advancement. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. The Corporation shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration. 

(b)    In the event that a determination shall have been made pursuant to Section 10(a) of this Agreement that
Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 12 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be
prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 12 the Corporation shall have the burden of proving Indemnitee is not entitled to indemnification or advancement,
as the case may be. 
 (c)    If a determination shall have been made pursuant to Section 10(a) of this Agreement
that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a prohibition of such indemnification under applicable
law. 
 (d)    The Corporation shall, to the fullest extent not prohibited by applicable law, be precluded from
asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Corporation is bound by all the provisions of this Agreement. It is the intent of the Corporation that Indemnitee not be required to incur Expenses associated with the interpretation, enforcement or defense of Indemnitee’s
rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder. The Corporation shall indemnify Indemnitee against any and all
such Expenses and, if 

  
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requested by Indemnitee, shall (within ten (10) days after receipt by the Corporation of a written request therefore) advance, to the extent not prohibited by applicable law, such Expenses
to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advancement from the Corporation under this Agreement or under any directors’ and officers’ liability insurance
policies maintained by the Corporation, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement or insurance recovery, as the case may be. 

(e)    Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification
under this Agreement shall be required to be made prior to the final disposition of the Proceeding; provided that, in absence of any such determination with respect to such Proceeding, the Corporation shall advance Expenses with respect to
such Proceeding. 
 Section 13.    Non-Exclusivity; Survival of Rights;
Insurance; Subrogation. 
 (a)    The rights of indemnification and to receive advancement as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or
otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s
Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement than would be afforded currently under the Bylaws or
this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy. 
 (b)    The
Corporation hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement and insurance provided by one or more Persons with whom or which Indemnitee may be associated. The Corporation hereby acknowledges and agrees
that (i) the Corporation shall be the indemnitor of first resort with respect to any Proceeding, Expense, Liability or matter that is the subject of the Indemnity Obligations, (ii) the Corporation shall be primarily liable for all
Indemnity Obligations and any indemnification afforded to Indemnitee in respect of any Proceeding, Expense, Liability or matter that is the subject of Indemnity Obligations, whether created by applicable law, organizational or constituent documents,
contract (including this Agreement) or otherwise, (iii) any obligation of any other Persons with whom or which Indemnitee may be associated to indemnify Indemnitee or advance Expenses or Liabilities to Indemnitee in respect of any Proceeding
shall be secondary to the obligations of the Corporation hereunder, (iv) the Corporation shall be required to indemnify Indemnitee and advance Expenses or Liabilities to Indemnitee hereunder to the fullest extent provided herein without regard
to any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated or insurer of any such Person and (v) the Corporation irrevocably waives, relinquishes 

  
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and releases any other Person with whom or which Indemnitee may be associated from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the
Corporation hereunder. In the event any other Person with whom or which Indemnitee may be associated or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Corporation or payable
under any Corporation insurance policy, the payor shall have a right of subrogation against the Corporation or its insurer or insurers for all amounts so paid which would otherwise be payable by the Corporation or its insurer or insurers under this
Agreement. In no event will payment of an Indemnity Obligation by any other Person with whom or which Indemnitee may be associated or their insurers affect the obligations of the Corporation hereunder or shift primary liability for any Indemnity
Obligation to any other Person with whom or which Indemnitee may be associated. Any indemnification, insurance or advancement provided by any other Person with whom or which Indemnitee may be associated with respect to any Liability arising as a
result of Indemnitee’s Corporate Status or capacity as an officer or director of any Person is specifically in excess over any Indemnity Obligation of the Corporation or any collectible insurance (including but not limited to any malpractice
insurance or professional errors and omissions insurance) provided by the Corporation under this Agreement. 
 (c)    To
the extent that the Corporation maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Corporation or of any other Enterprise, Indemnitee shall be covered by such policy or
policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies and such policies shall provide for and recognize that the insurance
policies are primary to any rights to indemnification, advancement or insurance proceeds to which Indemnitee may be entitled from one or more Persons with whom or which Indemnitee may be associated to the same extent as the Corporation’s
indemnification and advancement obligations set forth in this Agreement. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Corporation has director and officer liability insurance in effect, the Corporation
shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Corporation shall thereafter take all necessary or desirable action to cause such insurers to
pay, on behalf of Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. 

(d)    In the event of any payment under this Agreement, the Corporation shall not be subrogated to the rights of recovery
of Indemnitee, including rights of indemnification provided to Indemnitee from any other person or entity with whom Indemnitee may be associated; provided, however, that the Corporation shall be subrogated to the extent of any such
payment of all rights of recovery of Indemnitee under insurance policies of the Corporation or any of its subsidiaries. 

(e)    The indemnification and contribution provided for in this Agreement will remain in full force and effect regardless
of any investigation made by or on behalf of Indemnitee. 

  
 11 

 Section 14.    Duration of Agreement; Not Employment
Contract. This Agreement shall continue until and terminate upon the latest of: (i) ten (10) years after the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Corporation or any other
Enterprise and (ii) the date of final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 12 of this Agreement relating thereto. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators. This
Agreement shall not be deemed an employment contract between the Corporation (or any of its subsidiaries or any other Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Corporation (or any of
its subsidiaries or any other Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the
Corporation (or any of its subsidiaries or any other Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Corporation, by the Certificate of Incorporation, the Bylaws or
the DGCL. 
 Section 15.    Severability. If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by applicable
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions
of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall be construed so as
to give effect to the intent manifested thereby. 
 Section 16.    Enforcement. 

(a)    The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations
imposed on it hereby in order to induce Indemnitee to serve as a director, officer, employee or agent of the Corporation, and the Corporation acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer, employee or
agent of the Corporation. 
 (b)    This Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a
supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefore, nor diminish or abrogate any rights of Indemnitee thereunder. 

Section 17.    Modification and Waiver. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provision of this Agreement nor shall any waiver constitute a continuing
waiver. 

  
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 Section 18.    Notices. All notices, requests, demands and
other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed,
(b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other
communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received: 

(a)    If to Indemnitee, at such address as Indemnitee shall provide to the Corporation. 

(b)    If to the Corporation to: 

Parsley Energy, Inc. 
 303
Colorado Street, Suite 3000 
 Austin, Texas 78701 

Attention: Board of Directors 
 or to any other
address as may have been furnished to Indemnitee by the Corporation. 
 Section 19.    Contribution. To the
fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Corporation, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for Liabilities or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such
Proceeding in order to reflect (i) the relative benefits received by the Corporation and Indemnitee as a result of the event(s) and transaction(s) giving cause to such Proceeding; and (ii) the relative fault of the Corporation (and its
directors, officers, employees and agents) and Indemnitee in connection with such event(s) and transaction(s). 

Section 20.    Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the
parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to
Section 12(a) of this Agreement, the Corporation and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court
of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the
Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (iv) waive, and agree
not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum. 

  
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 Section 21.    Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought
needs to be produced to evidence the existence of this Agreement. 
 Section 22.    Miscellaneous. Use of
the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction thereof. 
 [Signatures Follow] 
  

  
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 IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and
year first above written. 
  

									
	PARSLEY ENERGY, INC.	 		 	INDEMNITEE
					
	By:	 	/s/ Colin Roberts	 		 	By:	 	/s/ David Dell’Osso
	Name:	 	Colin Roberts	 		 	Name:	 	David Dell’Osso
	Title:	 	EVP—General Counsel	 		 	Title:	 	EVP—Chief Operating Officer

  

  
 Signature Page to
Indemnification AgreementExhibit 4.1

 

SEVENTH SUPPLEMENTAL INDENTURE
 dated as of September 26, 2018

 

This Seventh Supplemental Indenture, dated as of the 26th day of September, 2018 (this “Seventh Supplemental Indenture”), 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 The Bank of New York Mellon, a New York banking corporation (hereinafter called the “Trustee”) and having its Corporate Trust Office at 240 Greenwich Street, New York, New York 10286.

 

WITNESSETH:

 

WHEREAS, the Issuer and the Trustee entered into an Indenture, dated as of June 1, 1997, as amended and supplemented by, among other things, the Fifth Supplemental Indenture dated as of February 13, 2018 between the Issuer and the Trustee (as so amended and supplemented, 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, the Issuer now desires to provide for the issuance of a series of its unsecured, subordinated debt securities pursuant 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 Holder (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 requested the Trustee to join with it in the execution and delivery of this Seventh 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 “5.875% Junior Subordinated Notes due 2078” (the “New Notes”), providing for the issuance of the New Notes and amending and adding certain provisions thereof for the benefit of the Holders of the New Notes; and

 

WHEREAS, the Issuer and the Trustee desire to enter into this Seventh Supplemental Indenture for the purposes set forth in Section 2.3 and Section 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 Seventh Supplemental Indenture; and

 

WHEREAS, all things necessary to make this Seventh 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 New 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 New Notes, as follows:

 

ARTICLE I
 STANDARD PROVISIONS; DEFINITIONS

 

SECTION 1.01.  Standard Provisions.  The Original Indenture together with this Seventh 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 Original Indenture and are used herein with the same meanings as in the Original Indenture.

 

SECTION 1.02.  Definitions.

 

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

 

	
Term
    	
 
    	
Section
    
	
Compound Interest
    	
 
    	
2.03
    
	
Deferred Interest
    	
 
    	
2.03
    
	
Depositary
    	
 
    	
Article VII
    
	
DTC
    	
 
    	
2.03
    
	
Events of Default
    	
 
    	
5.01
    
	
Extension Period
    	
 
    	
2.03
    
	
Global Note
    	
 
    	
Article VII
    
	
Indenture
    	
 
    	
1.01; 2.04
    
	
Interest Payment Date
    	
 
    	
2.03
    
	
Issuer
    	
 
    	
Preamble; 2.03
    
	
Ministerial Action
    	
 
    	
2.01(e); 2.04
    
	
New Notes
    	
 
    	
Recitals; 2.04
    
	
Original Indenture
    	
 
    	
Recitals
    
	
Original Issue Date
    	
 
    	
2.03
    
	
Place of Payment
    	
 
    	
2.03
    
	
Record Date
    	
 
    	
2.03
    
	
Securities
    	
 
    	
Recitals
    
	
Seventh Supplemental Indenture
    	
 
    	
Preamble
    
	
Stated Maturity
    	
 
    	
2.01(a); 2.03
    
	
Trustee
    	
 
    	
Preamble; 2.04
    

 

(b)                                 Section 1.1 of the Original Indenture is amended to insert the new definitions solely applicable to the New Notes and to replace, solely with respect to the New Notes (but not with respect to any other series of Securities), any existing definitions (as applicable) in the Original Indenture, in the appropriate alphabetical sequence, as follows:

 

“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

 

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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.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor legislation.

 

“Indebtedness” of any Person means, without duplication:

 

(i)                                     the principal (including any premium) 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.

 

“Indebtedness Ranking Equally with the New Notes” means Indebtedness, to the extent the Indebtedness specifically by its terms ranks equally with and not prior to or junior to the New Notes in the right of payment upon the happening of the dissolution, winding-up, liquidation or reorganization of the Issuer. The securing of any Indebtedness otherwise constituting

 

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Indebtedness Ranking Equally with the New Notes will not prevent the Indebtedness from constituting Indebtedness Ranking Equally with the New Notes.

 

“Indebtedness Ranking Junior to the New Notes” means any Indebtedness, to the extent the Indebtedness specifically by its terms ranks junior to and not equally with or prior to:

 

(i)                                     the New Notes, and

 

(ii)                                  any other Indebtedness Ranking Equally with the New Notes,

 

in the right of payment upon the happening of the dissolution, winding-up, liquidation or reorganization of the Issuer. The securing of any Indebtedness otherwise constituting Indebtedness Ranking Junior to the New Notes will not prevent the Indebtedness from constituting Indebtedness Ranking Junior to the New Notes.

 

“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.

 

“Lien” means any lien, mortgage, pledge, security interest, conditional sale, title retention agreement or other charge or encumbrance of any kind, or any other type of arrangement intended or having the effect of conferring upon a creditor of the Issuer or any Subsidiary a preferential interest.

 

“NYSE” means the New York Stock Exchange.

 

“Paying Agent” means any Person authorized by the Issuer to pay the principal of (including premium, if any) or interest on any of the New Notes on behalf of the Issuer.  Initially, the Paying Agent shall be the Trustee.

 

“Predecessor New Note” of any particular New Note means every previous New Note evidencing all or a portion of the same debt as that evidenced by such particular New Note; and, for the purposes of the definition, any New Note authenticated and made available for delivery under Section 2.9 of the Original Indenture in exchange for or in lieu of a mutilated, destroyed, lost or stolen New Note shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen New 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.

 

“Rating Agency Event” means a change in the methodology published by any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act (a “rating agency”) that currently publishes a rating for the Issuer in assigning equity credit to securities such as the New Notes, as such methodology was in effect on September20, 2018

 

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(the “current criteria”), which change results in (i) any shortening of the length of time for which equity credit pertaining to the New Notes would have been in effect had the current methodology not been changed or (ii) a lower equity credit being assigned by such rating agency to the New Notes as of the date of such change than the equity credit that would have been assigned to the New Notes as of the date of such change by such rating agency pursuant to its current criteria.

 

“Rights Plan” means a plan of the Issuer providing for the issuance by the Issuer to all holders of the Issuer’s Capital Stock of rights entitling them to subscribe for or purchase such Capital Stock, which rights (i) are deemed to be transferred with such Capital Stock, (ii) are not exercisable and (iii) are also issued in respect of future issuances of Capital Stock, in each case until the occurrence of a specified event or events.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor legislation.

 

“Senior Indebtedness” means the principal of (including premium, if any) and interest on the following, whether outstanding on the date hereof or thereafter incurred, created or assumed: (i) indebtedness of the Issuer for money borrowed by the Issuer or evidenced by debentures, notes, bankers’ acceptances or other corporate debt securities, or similar instruments issued by the Issuer (in each case, other than the New Notes or any other Subordinated Securities); (ii) all capital lease obligations of the Issuer; (iii) all obligations of the Issuer issued or assumed as the deferred purchase price of property, all conditional sale obligations of the Issuer and all obligations of the Issuer under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business); (iv) obligations with respect to letters of credit; (v) all indebtedness of others of the type referred to in clauses (i) though (iv) assumed by or guaranteed in any manner by the Issuer or in effect guaranteed by the Issuer; (vi) all obligations of the type referred to in clauses (i) through (v) of other Persons secured by any lien on any property or asset of the Issuer (whether or not such obligation is assumed by the Issuer), except for (1) any such indebtedness that is by its terms subordinated to or pari passu with the New Notes, as the case may be, and (2) any indebtedness between or among the Issuer and its Affiliates; and/or (vii) renewals, extensions or refundings of any of the indebtedness referred to in the preceding clauses unless, in the case of any particular indebtedness, renewal, extension or refunding, under the express provisions of the instrument creating or evidencing the same or the assumption or guarantee of the same, or pursuant to which the same is outstanding, such indebtedness or such renewal, extension or refunding thereof is not superior in right of payment to the New Notes (or any other Subordinated Securities).

 

“Subordinated Securities” has the meaning set forth in Section 12.1(a) of the Original Indenture.

 

“Tax Event” means receipt by the Issuer of an opinion of nationally recognized independent tax counsel experienced in such matters at any time after the occurrence of any of the events set forth below to the effect that, as a result of:

 

(i)                                     any amendment to or change or announced proposed change in the laws or regulations of the United States or any of its political subdivisions or taxing authorities affecting taxation;

 

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(ii)                                  any amendment to or change in an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority; or

(iii)                               any official administration interpretation or official administrative pronouncement that provides for a position with respect to those laws or regulations that differs from the generally accepted position on the date of this Seventh Supplemental Indenture;

 

which amendment or change becomes effective or proposed change, pronouncement, interpretation, action or decision is announced on or after September 20, 2018, there is more than an insubstantial risk that interest payable on the New Notes is not or within 90 days of the date of the opinion would not be currently deductible as such interest accrues, in whole or in part, by the Issuer for United States federal income tax purposes.

 

ARTICLE II
 DESIGNATION AND TERMS OF THE NEW NOTES; FORMS

 

SECTION 2.01.  Establishment of Series.

 

(a)                                 There is hereby created a series of Securities to be known and designated as the “5.875% Junior Subordinated Notes due 2078” to be issued in aggregate principal amount of $250,000,000 (plus such additional principal amount of Securities, not exceeding $37,500,000, that may be subsequently issued pursuant to an exercise (in whole or in part) of the over-allotment option by the underwriters of the New Notes).  Additional Securities, without limitation as to amount, having substantially the same terms as the New Notes (except a different issue date, a different issue price and bearing interest from the last Interest Payment Date to which interest has been paid or duly provided for on the New Notes, and, if no interest has been paid, from the Original Issue Date), may also be issued by the Issuer pursuant to the Indenture without the consent of the existing Holders of the New Notes; provided, that such additional Securities must be part of the same issue as the New Notes for U.S. federal income tax purposes or, if they are not part of the same issue for such purposes, such additional Securities must be issued with a separate CUSIP number.  Such additional Securities shall be part of the same series as the New Notes.  The “Stated Maturity” of the New Notes is October 15, 2078; the principal amount of the New Notes shall be payable on such date unless the New Notes are earlier redeemed in accordance with the terms of the Indenture.

 

(b)                                 The New 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, at the rate of 5.875% per annum stated therein until the principal thereof is paid or made available for payment.  Interest will be payable quarterly on each Interest Payment Date and at Maturity, as provided and subject to the terms contained in the form of the New Note in Section 2.03 and Section 2.04 hereof (including the right of the Issuer to defer interest payable on the New Notes as set forth in Section 2.03 hereof).

 

(c)                                  The Record Date referred to in Section 2.3(f)(4) of the Original Indenture for the payment of the interest on any New Note payable on any Interest Payment Date (other than on the Stated Maturity) shall be the date 15 calendar days immediately preceding the applicable

 

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Interest Payment Date (whether or not a Business Day) except that interest payable on the Stated Maturity shall be paid to the Person to whom the principal amount is paid.

 

(d)                                 The payment of the principal of (including premium, if any) and interest on the New Notes shall not be secured by a security interest in any property.

 

(e)                                  The New Notes shall be redeemable at the option of the Issuer as follows:

 

(i)                                     in whole or in part, at any time and from time to time, on or after October 15, 2023, at a redemption price equal to 100% of the principal amount of such New Notes being redeemed, plus accrued and unpaid interest, if any, thereon to, but not including, the date of redemption;

 

(ii)                                  in whole but not in part, at any time prior to October 15, 2023, at any time within 90 days following the occurrence and continuation of a Tax Event, at a redemption price equal to 100% of the principal amount of the New Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the date of redemption; and

 

(iii)                               in whole but not in part, at any time prior to October 15, 2023, at any time within 90 days following the conclusion of any review or appeal process instituted by the Issuer at any time following the occurrence and continuation of a Rating Agency Event, at a redemption price equal to 102% of the principal amount of the New Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the date of redemption.

 

The Issuer’s right to redeem the New Notes under clause (ii) above shall be subject to the condition that if at the time there is available to the Issuer the opportunity to eliminate a Tax Event, within 90 days following the occurrence and continuation of such Tax Event, by taking some ministerial action (“Ministerial Action”), such as filing a form or making an election, or pursuing some other similar reasonable measure that will have no adverse effect on the Issuer or the Holders of the New Notes and will involve no material cost, the Issuer shall pursue such measures in lieu of redemption; provided further, that the Issuer shall have no right to redeem the New Notes while the Issuer is pursuing any such Ministerial Action.

 

The Trustee may rely on an Officers’ Certificate stating that a Tax Event or Rating Agency Event, as the case may be, has occurred and shall have no responsibility to monitor or determine whether or not such an event has occurred.

 

(f)                                   The New Notes shall not be convertible.

 

(g)                                  The New Notes shall be subordinated to the payment of Senior Indebtedness as provided in Article IV of this Seventh Supplemental Indenture, and the provisions of Article Twelve of the Original Indenture shall apply to the New Notes.

 

(h)                                 The Issuer will not pay any additional amounts on the New Notes held by a Person who is not a U.S. person (as defined in Regulation S under the Securities Act) in respect of any tax, assessment or government charge withheld or deducted.

 

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(i)                                     The events specified as Events of Default with respect to the New Notes shall only include the events specified in Article V hereof, which shall supersede the “Events of Default” set forth in Section 5.1 of the Original Indenture.  In addition to the covenants set forth in Article Three of the Original Indenture, the Holders of the New Notes shall have the benefit of the covenants of the Issuer set forth in Articles III and V hereof.

 

(j)                                    The New Notes are issuable only in registered form without coupons in minimum denominations of $25 and any integral multiple in excess thereof.

 

(k)                                 The provisions of Article VI and Article VII hereof shall apply to the New Notes as specified therein.

 

(l)                                     The Place of Payment for the New Notes shall be determined in accordance with Section 3.2 of the Original Indenture and shall initially be the Corporate Trust Office of the Trustee.

 

(m)                             The New Notes shall have such additional terms and provisions as set forth in Sections 2.03 and 2.04 hereof.

 

SECTION 2.02.  Forms Generally.  The New Notes and Trustee’s certificate 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 New Notes, as evidenced by their execution thereof.

 

The definitive New 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 New Notes, as evidenced by their execution thereof.

 

SECTION 2.03.  Form of Face of New 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.

 

BY ITS PURCHASE, ACCEPTANCE AND HOLDING OF THIS SECURITY, EACH PURCHASER AND SUBSEQUENT TRANSFEREE WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF THE ASSETS USED BY SUCH PURCHASER OR TRANSFEREE TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES ASSETS OF ANY EMPLOYEE BENEFIT PLAN (AS DEFINED

 

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IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”)), THAT IS SUBJECT TO TITLE I OF ERISA, ANY PLAN (AS DEFINED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO SECTION 4975 OF THE CODE, OR ANY ENTITY DEEMED TO HOLD ANY PLAN ASSETS OF THE FOREGOING BY VIRTUE OF SUCH EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN THE ENTITY (EACH, A “PLAN”) OR A PLAN THAT IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR OTHER LAW THAT IS SUBSTANTIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA AND THE CODE (“SIMILAR LAW”) OR (II) THE PURCHASE, ACCEPTANCE AND HOLDING OF THIS SECURITY BY SUCH PURCHASER OR TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR, IN THE CASE OF A PLAN THAT IS SUBJECT TO SIMILAR LAW, A VIOLATION UNDER ANY SUCH SIMILAR LAW.  “PLAN ASSETS” HAS THE MEANING GIVEN TO IT BY SECTION 3(42) OF ERISA AND REGULATIONS OF THE U.S. DEPARTMENT OF LABOR, BUT ALSO INCLUDES ASSETS OF AN EMPLOYEE BENEFIT PLAN (WITHIN THE MEANING OF SECTION 3(3) OF ERISA) SUBJECT TO LAWS OR REGULATIONS THAT ARE SUBSTANTIALLY SIMILAR TO SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.

 

Unless this Global 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.

 

CMS ENERGY CORPORATION
 5.875% JUNIOR SUBORDINATED NOTE DUE 2078

 

	
No. 1
    	
$250,000,000
    

 

CUSIP No.: 125896 852

 

ISIN No.: US1258968528

 

CMS Energy Corporation, a corporation duly organized and existing under the laws of the State of Michigan (herein called the “Issuer”, 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 Two Hundred Fifty Million Dollars on October 15, 2078 (“Stated Maturity”) and to pay interest thereon from September 26, 2018 (the “Original Issue Date”) or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on January 15, April 15, July 15 and October 15 in each year, commencing on January 15, 2019 (each an “Interest Payment Date”), to the Persons in whose names the New Notes are registered at 5:00 p.m., New York City time, on the date 15 calendar days immediately preceding the applicable Interest Payment Date (whether or not a

 

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Business Day) (each a “Record Date”), and on the Stated Maturity, to the Person to whom the principal amount is paid, at the rate of 5.875% 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 and, for any period shorter than a quarter, on the basis of the actual number of days elapsed per 30-day month.  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 New Note (or one or more Predecessor New Notes) is registered at 5:00 p.m., New York City time, 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 New Notes not less than 15 calendar days preceding such subsequent Record Date. All references in this New Note to interest shall include Compound Interest, if any.

 

So long as no Event of Default with respect to this New Note has occurred and is continuing, the Issuer shall have the right, at any time and from time to time, to defer payments of interest on this New Note by extending the interest payment period of such New Note for a period not exceeding 40 consecutive quarterly periods (an “Extension Period”), during which Extension Period no interest shall be due and payable; except that no Extension Period may extend beyond the Stated Maturity. To the extent permitted by applicable law, interest, the payment of which has been deferred because of the extension of the interest payment period pursuant to this paragraph, will bear interest thereon at an annual rate of 5.875% compounded quarterly for each quarterly period of the Extension Period (“Compound Interest”). At the end of the Extension Period, the Issuer shall pay all interest accrued and unpaid on this New Note, including any Compound Interest (together, “Deferred Interest”), that shall be payable to the Holder in whose name the New Note is registered in the Security Register on the Record Date for the first Interest Payment Date after the end of the Extension Period. Before the termination of any Extension Period, the Issuer may shorten or further extend such period, provided that such Extension Period as extended shall not exceed 40 consecutive quarterly periods, or extend beyond the Stated Maturity or redemption date, if earlier, of this New Note. Upon the termination of any Extension Period and upon the payment of all Deferred Interest then due, the Issuer may commence a new Extension Period, subject to the foregoing requirements. No interest shall be due and payable during an Extension Period, except at the end thereof, but the Issuer may prepay at any time all or any portion of the interest accrued during an Extension Period.

 

The Issuer shall give the Holder of this New Note and the Trustee written notice of its selection of such Extension Period or any shortening or extension thereof at least ten Business Days before the earlier of (x) the next succeeding Interest Payment Date or (y) if this New Note is then listed, the date the Issuer is required to give notice to the NYSE or other applicable self-regulatory organization or to the Holder of this New Note of the Record Date or the Interest Payment Date. The quarterly period in which any notice is given pursuant to this paragraph shall be counted as one of the 40 quarterly periods permitted in the maximum Extension Period permitted under the preceding paragraph.

 

Payment of the principal of (including premium, if any) and interest on this New Note will be made at the office or agency of the Issuer maintained for that purpose (the “Place of

 

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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 in the Security Register or by wire transfer to an account designated by such Person not later than five Business Days prior to the related Record Date. The initial Place of Payment shall be the Trustee’s Corporate Trust Office.

 

Reference is hereby made to the further provisions of this New 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.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this New 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.

 

Dated:

 

	
 
    	
CMS   ENERGY CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Its:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
Its:
    

 

SECTION 2.04.  Form of Reverse of New Note.

 

This 5.875% Junior Subordinated Note due 2078 is one of a duly authorized issue of securities of the Issuer (herein called the “New Notes”), issued and to be issued under an Indenture, dated as of June 1, 1997 (as supplemented by the Fifth Supplemental Indenture, dated as of February 13, 2018 and the Seventh Supplemental Indenture, dated as of September 26, 2018 and as further amended or supplemented from time to time, the “Indenture”), between the Issuer and The Bank of New York Mellon, a New York banking corporation, 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 New Notes and of the terms upon which the New Notes are, and are to be, authenticated and made available for delivery.  This New Note is one of the series designated on the face hereof, issued in an initial aggregate principal amount of $250,000,000 (plus such additional principal amount of New Notes, not exceeding $37,500,000, that may be subsequently issued pursuant to an exercise (in whole or in part) of the over-allotment option by the underwriters of the New Notes).  Additional Securities, without limitation as to amount, having substantially the same terms as the New Notes (except a different issue date, a different

 

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issue price and bearing interest from the last Interest Payment Date to which interest has been paid or duly provided for on the New Notes, and, if no interest has been paid, from the Original Issue Date), may also be issued by the Issuer pursuant to the Indenture without the consent of the existing Holders of the New Notes; provided, that such additional Securities must be part of the same issue as the New Notes for U.S. federal income tax purposes or, if they are not part of the same issue for such purposes, such additional Securities must be issued with a separate CUSIP number.  Such additional Securities shall be part of the same series as the New Notes.

 

Payment of the principal of and interest on this New Note is, to the extent provided in the Indenture, subordinated and subject in right of payment to the prior payment in full of all existing and future Senior Indebtedness of the Issuer and this New Note is issued subject to the provisions of the Indenture with respect thereto. Each registered Holder of this New Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination so provided and (c) appoints the Trustee as his or her attorney-in-fact for any and all such purposes. Each registered Holder hereof, by his or her acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.

 

The Issuer and, by its acceptance of this New Note or a beneficial interest herein, the registered Holder of, and any Person that acquires a beneficial interest in, this New Note agree that for United States federal, state and local tax purposes it is intended that this New Note constitute indebtedness, and each of the Issuer and the Holder of, and any Person that acquires a beneficial interest in, this New Note agrees to treat this New Note as indebtedness for United States federal income tax purposes.

 

No sinking fund is provided for the New Notes, and the New Notes shall not be subject to redemption or repurchase at the option of the Holder.

 

The New Notes are subject to redemption at the option of the Issuer, in whole or in part, at any time and from time to time, on or after October 15, 2023, at a redemption price equal to 100% of the principal amount of such New Notes being redeemed, plus accrued and unpaid interest, if any, thereon to, but not including, the date of redemption.

 

The New Notes are subject to redemption at the option of the Issuer, in whole but not in part, at any time prior to October 15, 2023, at any time within 90 days following the occurrence and continuation of a Tax Event, at a redemption price equal to 100% of the principal amount of the New Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the date of redemption.

 

As used in this New Note, a “Tax Event” means receipt by the Issuer of an opinion of nationally recognized independent tax counsel experienced in such matters at any time after the occurrence of any of the events set forth below to the effect that, as a result of:

 

(i)                                     any amendment to or change or announced proposed change in the laws or regulations of the United States or any of its political subdivisions or taxing authorities affecting taxation;

 

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(ii)                                  any amendment to or change in an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority; or

 

(iii)                               any official administration interpretation or official administrative pronouncement that provides for a position with respect to those laws or regulations that differs from the generally accepted position on the date of this Seventh Supplemental Indenture;

 

which amendment or change becomes effective or proposed change, pronouncement, interpretation, action or decision is announced on or after September 20, 2018, there is more than an insubstantial risk that interest payable on this New Note is not or within 90 days of the date of the opinion would not be currently deductible as such interest accrues, in whole or in part, by the Issuer for United States federal income tax purposes.

 

The Issuer’s right to redeem the New Notes due to a Tax Event under the second preceding paragraph shall be subject to the condition that if at the time there is available to the Issuer the opportunity to eliminate a Tax Event, within 90 days following the occurrence and continuation of such Tax Event, by taking some ministerial action (“Ministerial Action”), such as filing a form or making an election, or pursuing some other similar reasonable measure that will have no adverse effect on the Issuer or the Holders of the New Notes and will involve no material cost, the Issuer shall pursue such measures in lieu of redemption; provided further, that the Issuer shall have no right to redeem the New Notes while the Issuer is pursuing any such Ministerial Action.

 

The New Notes are subject to redemption at the option of the Issuer, in whole but not in part, at any time prior to October 15, 2023, at any time within 90 days following the conclusion of any review or appeal process instituted by the Issuer at any time following the occurrence and continuation of a Rating Agency Event, at a redemption price equal to 102% of the principal amount of the New Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the date of redemption.

 

As used in this New Note, a “Rating Agency Event” means a change in the methodology published by any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act (a “rating agency”) that currently publishes a rating for the Issuer in assigning equity credit to securities such as this New Note, as such methodology was in effect on September 20, 2018 (the “current criteria”), which change results in (i) any shortening of the length of time for which equity credit pertaining to the New Notes would have been in effect had the current methodology not been changed or (ii) a lower equity credit being assigned by such rating agency to the New Notes as of the date of such change than the equity credit that would have been assigned to the New Notes as of the date of such change by such rating agency pursuant to its current criteria.

 

In the event that the Issuer elects to redeem any New Notes in accordance with the foregoing, any installment of interest for which the Interest Payment Date is on or prior to the relevant date of redemption will be payable to the Holder of record at the close of business on the relevant Record Date referred to on the face hereof, all as provided in the Indenture.

 

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If less than all of the New Notes are to be redeemed and (i) the New Notes are in global form, interests in the New Notes to be redeemed shall be selected for redemption by DTC in accordance with DTC’s standard procedures therefor and (ii) the New Notes are in definitive form, the New Notes to be redeemed shall be selected by lot.  Notice of redemption shall be given not less than 10 nor more than 60 days prior to the date fixed for redemption to the Holders of the New Notes to be redeemed (which, as long as the New Notes are held in the book-entry only system, will be DTC (or its nominee) or a successor depositary (or the successor’s nominee)); provided, however, that the failure to duly give such notice, or any defect therein, shall not affect the validity of any proceedings for the redemption of the New Notes as to which there shall have been no such failure or defect.  On and after the date fixed for redemption (unless the Issuer shall default in the payment of the New Notes or portions thereof to be redeemed at the applicable redemption price, together with accrued and unpaid interest, if any, thereon to, but not including, such date), interest on the New Notes or the portions thereof so called for redemption shall cease to accrue.

 

If an Event of Default with respect to this New Note shall occur and be continuing, the principal of this New Note may be declared due and payable in the manner and with the effect provided in the Indenture.

 

In any case where any Interest Payment Date, redemption date, Stated Maturity or Maturity of any New Note shall not be a Business Day, then (notwithstanding any other provision of the Indenture or this New Note) payment of interest or principal (including premium, if any) need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date, redemption date or Stated Maturity or at Maturity; provided that no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, redemption date, Stated Maturity or Maturity, as the case may be, to such Business Day.

 

The Trustee and the Paying Agent shall return to the Issuer upon written request any money or property held by them for the payment of any amount with respect to the New Notes that remains unclaimed for three years, provided, however, that the Trustee or such Paying Agent, before being required to make any such return, shall at the expense of the Issuer mail to each such Holder notice that such money or property remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing, any unclaimed money or property then remaining shall be returned to the Issuer.  After return to the Issuer, Holders entitled to the money or property must look to the Issuer for payment as general creditors unless an applicable abandoned property law designates another Person.

 

The provisions relating to defeasance and covenant defeasance in Article Ten of the Indenture shall not apply to the New Notes (but otherwise Article Ten of the Original Indenture shall apply to the New Notes, including Section 10.1(A) of the Original Indenture).

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of all outstanding New Notes under the Indenture at any time by the Issuer and the Trustee with the consent of the Holders of not less than a majority in principal amount of Securities of all series (including the New Notes) then outstanding and affected (voting as one class).

 

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The Indenture permits the Holders of a majority in principal amount of Securities of all series at the time outstanding with respect to which a default shall have occurred and be continuing (voting as one class) to waive on behalf of the Holders of all outstanding Securities of such series any past default by the Issuer, provided that no such waiver may be made with respect to a default in the payment of the principal of or the interest on any Security of such series, the default in the payment of the redemption price with respect to the New Notes, or the default by the Issuer in respect of certain covenants or provisions of the Indenture, the modification or amendment of which must be consented to by the Holder of each outstanding Security of each series affected.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any New Note will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in principal amount of the outstanding Securities of each affected series (voting as one class) shall have made written request, and offered reasonable indemnity against costs, expenses and liabilities, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of the outstanding Securities of each affected series (voting as one class) a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal of (including premium, if any) or any interest on this New Note on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this New Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of (including premium, if any) and interest on this New Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this New Note is registrable in the Security Register, upon surrender of this New Note for registration of transfer at the office or agency of the Issuer in any place where the principal of (including premium, if any) and interest on this New Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new New Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The New Notes are issuable only in registered form without coupons in minimum denominations of $25 and any integral multiple in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, New Notes are exchangeable for a like aggregate principal amount of New Notes and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

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The Issuer shall not be required to (i) issue, exchange or register the transfer of this New Note for a period of 15 days next preceding the first mailing or publication of the notice of redemption of New Notes or (ii) exchange or register the transfer of any New Note or any portion thereof selected, called or being called for redemption, except in the case of any New Note to be redeemed in part, the portion thereof not so to be redeemed.

 

Prior to due presentment of this New Note for registration of transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the Person in whose name this New Note is registered as the owner hereof for all purposes, whether or not this New Note be overdue, and neither the Issuer, the Trustee nor any such agent shall be affected by notice to the contrary.

 

All terms used in this New Note without definition which are defined in the Indenture shall have the meanings assigned to them in the Indenture.  In case of any conflict between this New Note and the Indenture, the provisions of the Indenture shall control.

 

SECTION 2.05.  Form of Trustee’s Certificate of Authentication.  The Trustee’s certificate of authentication shall be in substantially the following form:

 

This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture.

 

	
 
    	
THE   BANK OF NEW YORK MELLON,
    
	
 
    	
    as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
By
    	
 
    
	
 
    	
Its:   Authorized Signatory
    
					

 

SECTION 2.06.  Rights of Trustee.  The Trustee shall not be deemed to have notice, or be charged with knowledge, of any event requiring notice under the Indenture unless the Trustee shall have received from the Issuer or other requisite party such notice in writing.

 

ARTICLE III
  COVENANT TO LIST ON EXCHANGE

 

The Issuer will use its best efforts to list the New Notes for trading on the NYSE.

 

ARTICLE IV
 SUBORDINATION OF NEW NOTES

 

The New Notes shall constitute Subordinated Securities under the Original Indenture, and the provisions of Article Twelve of the Original Indenture shall apply to the New Notes. The Issuer covenants and agrees, and each Holder of New Notes by his or her acceptance thereof likewise covenants and agrees, that the indebtedness represented by the New Notes and the payment of the principal and interest, if any, on the New Notes is subordinated and subject in right of payment, to the extent and in the manner provided in Article Twelve of the Original Indenture, to the prior payment in full of all Senior Indebtedness. Subject to the extent provided in Article Twelve of the Original Indenture, the New Notes will rank equally in right of payment

 

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to Indebtedness Ranking Equally with the New Notes that the Issuer may issue from time to time.

 

ARTICLE V
 EVENTS OF DEFAULT
 WITH RESPECT TO THE NEW NOTES; CERTAIN COVENANTS

 

SECTION 5.01.  Definition.  The only “Events of Default” with respect to the New Notes shall be the following:

 

(a)         default in the payment of any installment of interest upon any of the New Notes as and when the same shall become due and payable, (whether or not payment is prohibited by the provisions of Article Twelve of the Original Indenture), and continuance of such default for a period of 30 days; provided, however, that if the Issuer is permitted by the terms of the New Notes to defer the payment in question (including any Extension Period), the date on which such payment is due and payable shall be the date on which the Issuer is required to make payment following such deferral, if such deferral has been elected pursuant to the terms of the New Notes;

 

(b)         default in the payment of all or any part of the principal of the New Notes as and when the same shall become due and payable (whether or not payment is prohibited by the provisions of Article Twelve of the Original Indenture), whether at Maturity, upon purchase by the Issuer at the option of the Holder, upon any redemption, by declaration or otherwise; provided, however, that if the Issuer is permitted by the terms of the New Notes to defer the payment in question (including any Extension Period), the date on which such payment is due and payable shall be the date on which the Issuer is required to make payment following such deferral, if such deferral has been elected pursuant to the terms of the New Notes;

 

(c)          a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Issuer in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, adjudging the Issuer a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Issuer under any applicable law, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part of the property of the Issuer, or ordering the winding up or liquidation of the affairs of the Issuer, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; and

 

(d)         the Issuer shall commence a voluntary case or proceeding under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect or any other case or proceeding to be adjudicated a bankrupt or insolvent, or consent to the entry of a decree or order for relief in an involuntary case under any such law, or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable law, or consent to the filing of such petition or to the appointment or

 

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taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Issuer or for any substantial part of the property of the Issuer, or make any general assignment for the benefit of creditors, or the notice by it in writing of its inability to pay its debts generally as they become due, or the taking of any corporate action by the Issuer in furtherance of any such action.

 

SECTION 5.02.  Additional Waivers of Past Defaults.  In addition to those matters set forth in Section 5.10 of the Original Indenture, solely with respect to the New Notes (but not with respect to any other series of Securities), approval of the Holders of each outstanding New Note shall be required to waive any default in any payment of the redemption price with respect to any New Note.

 

SECTION 5.03.  Additional Covenants with Respect to the New Notes.  The Issuer covenants and agrees with each Holder of New Notes that neither it nor its Subsidiaries shall:

 

(a)                     declare or pay any dividends or distributions on the Issuer’s Capital Stock;

 

(b)                     redeem, purchase, acquire or make a liquidation payment with respect to any of the Issuer’s Capital Stock;

 

(c)                      make any payment of principal of (including premium, if any) or interest, if any, on or repay, repurchase or redeem any of the Issuer’s Indebtedness Ranking Equally with the New Notes or Indebtedness Ranking Junior to the New Notes; or

 

(d)                     make any guarantee payments with respect to any guarantee by the Issuer of the Indebtedness of any Subsidiary or any other party if such guarantee ranks equally in right of payment with or junior in right of payment to the New Notes;

 

(in each case other than (i) dividends or distributions payable solely in shares of the Capital Stock of the Issuer or rights to acquire, repurchase or redeem Capital Stock of the Issuer, (ii) any declaration of a dividend in connection with the implementation of a Rights Plan, (iii) the issuance of any Capital Stock of the Issuer under any Rights Plan, or the redemption or repurchase of any rights distributed pursuant to a Rights Plan, (iv) reclassification of the Issuer’s Capital Stock or the exchange or the conversion of one class or series of the Issuer’s Capital Stock for another class or series of the Issuer’s Capital Stock, (v) the purchase of fractional interests in shares of the Issuer’s Capital Stock pursuant to the conversion or exchange provisions of such Capital Stock or the security being converted or exchanged, and (vi) purchases or acquisitions of Capital Stock related to the issuance of Capital Stock or rights under any of the Issuer’s dividend reinvestment plans or any of the Issuer’s benefit plans for its directors, officers, employees, consultants or advisors), if at such time (x) there shall have occurred and be continuing an Event of Default applicable to the New Notes or any event of which the Issuer has actual knowledge that is, or with the giving of notice or the lapse of time, or both, would be an Event of Default applicable to the New Notes or (y) the Issuer shall have given notice of its election to begin an Extension Period as provided in Section 2.03 or such Extension Period, or any extension thereof, shall have commenced and be continuing.

 

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ARTICLE VI
 DISCHARGE OF INDENTURE AND DEFEASANCE

 

The provisions relating to defeasance and covenant defeasance in Article Ten of the Original Indenture shall not apply to the New Notes (but otherwise Article Ten of the Original Indenture shall apply to the New Notes, including Section 10.1(A) of the Original Indenture).

 

ARTICLE VII
 GLOBAL NOTES

 

The New Notes will be issued initially in the form of one or more Global Notes.  “Global Note” means a registered New Note evidencing one or more New Notes issued to a depositary (the “Depositary”) or its nominee, in accordance with this Article VII and bearing the legend prescribed in this Article VII.  The Issuer hereby designates The Depository Trust Company as the Depositary.  The Issuer shall execute and the Trustee shall, in accordance with this Article VII and the Issuer Order with respect to the New Notes, authenticate and make available for delivery one or more Global Notes in temporary or permanent form that (i) shall represent and shall be denominated in an aggregate amount equal to the aggregate principal amount of the New Notes to be represented by such Global Note or Global Notes, (ii) shall be registered in the name of the Depositary for such Global Note or Global Notes or the nominee of such Depositary, (iii) shall be made available for delivery by the Trustee to such Depositary or pursuant to such Depositary’s instructions and (iv) shall bear a legend substantially to the following effect: “Unless this Global Note is presented by an authorized representative of the Depositary to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of a nominee of the Depositary or in such other name as is requested by an authorized representative of the Depositary (and any payment is made to such nominee of the Depositary or to such other entity as is requested by an authorized representative of the Depositary), 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.”

 

If at any time the Depositary for the New Notes is unwilling or unable to continue as Depositary for the New Notes, defaults in the performance of its duties as Depositary or ceases to be a clearing agency registered under the Exchange Act or other applicable statute or regulation, the Issuer shall appoint a successor Depositary with respect to the New Notes.  If a successor Depositary for the New Notes is not appointed by the Issuer by the earlier of (x) 90 days from the date the Issuer receives notice to the effect that the Depositary is unwilling or unable to act, or the Issuer determines that the Depositary is unable to act, or (y) the effectiveness of the Depositary’s resignation or failure to fulfill its duties as Depositary, the Issuer will execute, and the Trustee, upon receipt of an Issuer Order for the authentication and delivery of definitive New Notes, will authenticate and make available for delivery New Notes in definitive form in an aggregate principal amount equal to the principal amount of the Global Note or Global Notes representing such New Notes in exchange for such Global Note or Global Notes.

 

If the Issuer so specifies with respect to any New Notes, an owner of a beneficial interest in a Global Note representing the New Notes may, on terms acceptable to the Issuer and the Depositary for the Global Note, receive individual New Notes in exchange for the beneficial

 

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interest.  In any such instance, an owner of a beneficial interest in a Global Note will be entitled to physical delivery in definitive form of New Notes represented by the Global Note equal in principal amount to the beneficial interest, and to have the New Notes registered in its name.  New Notes so issued in definitive form will be issued as registered New Notes in minimum denominations of $25 and any integral multiple in excess thereof, unless otherwise specified by the Issuer.

 

Upon the exchange of a Global Note for New Notes in definitive form, such Global Note shall be cancelled by the Trustee.  New Notes in definitive form issued in exchange for a Global Note pursuant to this Article VII shall be registered in such names and in such authorized denominations as the Depositary for such Global Note, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee or Security Registrar.  The Trustee shall make available for delivery such New Notes to the Persons in whose names such New Notes are so registered.

 

ARTICLE VIII
 SUPPLEMENTAL INDENTURES

 

This Seventh Supplemental Indenture is a supplement to the Original Indenture.  As supplemented by this Seventh Supplemental Indenture, the Original Indenture is in all respects ratified, approved and confirmed, and the Original Indenture and this Seventh Supplemental Indenture shall together constitute one and the same instrument.

 

The Trustee shall not be responsible in any manner whatsoever for the validity, sufficiency or adequacy of this Seventh Supplemental Indenture nor for the statements or recitals contained herein, all of which recitals are made solely by the Issuer.

 

TESTIMONIUM

 

This Seventh 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.

 

[The remainder of this page has been intentionally left blank.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Seventh Supplemental Indenture to be duly executed as of the day and year first written above.

 

	
CMS   ENERGY CORPORATION
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/   Srikanth Maddipati
    	
 
    
	
 
    	
Srikanth Maddipati
    	
 
    
	
 
    	
Vice President and   Treasurer
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
THE   BANK OF NEW YORK MELLON,
    	
 
    
	
     as Trustee
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/   Laurence J. O’Brien
    	
 
    
	
 
    	
Laurence J. O’Brien
    	
 
    
	
 
    	
Vice President
    	
 
    

 

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