CMS Energy Corporation (Form: 8-K)

CLASS ACTION SETTLEMENT AGREEMENT
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This CLASS ACTION SETTLEMENT AGREEMENT (“Settlement Agreement”) is entered into by and between Named Plaintiffs in the above-captioned Action for themselves and on behalf of the Settlement Class, on the one hand, and the Defendants, on the other.

WHEREAS, Named Plaintiffs commenced the above-captioned Action asserting various claims for relief under the Employee Retirement Income Security Act of 1974, as amended, against the Defendants, all of which claims are disputed by Defendants; and

WHEREAS, the Parties desire to promptly and fully resolve and settle with finality the Action;

NOW, THEREFORE, the Parties, in consideration of the promises, covenants and agreements herein described, and for other good and valuable consideration, acknowledged by each of them to be satisfactory and adequate, and intending to be legally bound, do hereby mutually agree as follows:

As used in this Settlement Agreement, italicized and capitalized terms and phrases not otherwise defined have the meanings provided below:

1.1. “Action” shall mean: In re CMS Energy ERISA Litigation, Master File No. 02-72834, United States District Court, Eastern District of Michigan, (Hon. George Caram Steeh), and any and all cases now or hereafter consolidated therewith. The “Action” specifically excludes the “Securities Actions.”

1.2. “Affiliate” shall mean: any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, a Person. For purposes of this definition, “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or otherwise.

1.3. “Agreement Execution Date” shall mean: the date on which this Settlement Agreement is fully executed, as provided in Section 11.14 below.

1.4. “Carrier” shall mean: Associated Electric & Gas Insurance Services Limited, and its General Managing Agent, AEGIS Insurance Services, Inc. (collectively, “AEGIS”).

1.5. “Class Counsel” shall mean: Keller Rohrback L.L.P.; Malakoff, Doyle and Finberg, P.C.; McTigue Law Firm; and Campbell, Harrison and Dagley, L.L.P.

1.7. “Class Notice” shall mean: the form of notice which shall be attached as an exhibit to the form of Preliminary Approval Order, the terms of which shall be agreed upon by the Parties.

1.8. “Class Period” shall mean: the period from August 3, 2000 through December 27, 2004.

1.9. “Class Settlement Amount” shall have the meaning set forth in Section 7.2.

1.10. “Company” shall mean: CMS Energy Corporation, a Michigan corporation, and each of its Affiliates, and includes any and all predecessors or Successors-In-Interest, local, regional, national, and/or executive offices, divisions, or affiliates (foreign and domestic), segments, or divisions thereof, any of its subsidiaries, divisions or affiliates, including, but not limited to Consumers Energy Company and CMS Energy Resource Management Company, formerly known as CMS Marketing, Services and Trading Company, and all of their present and former officers, directors, employees, agents, directors, attorneys, accountants, advisors, and all other persons acting or purporting to act on their behalf.

1.11. “Complaint” shall mean: the Second Amended Consolidated Complaint filed on August 24, 2005.

1.12. “Court” shall mean: the United States District Court for the Eastern District of Michigan.

1.13. “Defendants” shall mean: the Company and the following Persons named as defendants in the Complaint: Kathleen R. Flaherty; Victor J. Fryling; Earl D. Holton; William U. Parfet; Kenneth L. Way; Kenneth Whipple; John B. Yasinsky; John M. Deutch; James J. Duderstadt; Preston D. Hopper; David W. Joos; William T. McCormick, Jr.; Tamela W. Pallas; Percy A. Pierre; Alan M. Wright; Legal Representative of the Estate of Thomas McNish; and Laura L. Mountcastle.

1.14. “Effective Date” shall mean: the date on which the Final Order becomes Final in accordance with Section 1.17.

1.15. “ERISA” shall mean: the Employee Retirement Income Security Act of 1974, as amended, including all regulations promulgated and case law there under.

1.16. “Fairness Hearing” shall have the meaning set forth in Section 2.1.4.

1.17. “Final” shall mean: with respect to any judicial ruling or order, that the thirty (30) day period for any appeal has expired without the initiation of an appeal, or, if an appeal has been timely initiated, that there has occurred a full and final disposition of any such appeal without a reversal or modification, including the exhaustion of proceedings in any remand and/or subsequent appeal after remand. Notwithstanding any other provision hereof, the Final Order shall be deemed Final without regard to whether (i) the Court has entered an order regarding the Plan of Allocation or the award of legal fees and expenses; (ii) any order referred to in (i) above, if entered, has become Final; or (iii) any order referred to in (i) above is reversed or modified on appeal.

1.19. “Financial Institution” shall have the meaning set forth in Section 7.1.1.

1.21. “Named Plaintiffs” shall mean: Roger D. Schilling, Karen Potter, and Danny Jordan.

1.24. “Person” shall mean: an individual, partnership, corporation, governmental entity or any other form of entity or organization.

1.25. “Plaintiff Releasees” shall have the meaning set forth in Section 3.3.

1.26. “Plaintiffs” shall mean: Named Plaintiffs and each member of the Settlement Class.

1.27. The “Plan” shall mean: the Employees’ Savings Plan of Consumers Energy Company, as has been or may later be amended, individually and collectively, and any trust created under such Plan.

1.28. “Plan of Allocation” shall mean: the Plan of Allocation approved by the Court as contemplated by Section 2.1.4 and described in Section 8.2.4.

1.29. “Preliminary Approval Order” refers to the Order to be issued as set forth in Section 2.1.1.

1.30. “Preliminary Motion” refers to the motion to be filed as set forth in Section 2.1.1.

1.32. “Releasees” shall mean: the Defendants, the present and former Representatives of each of them, as well as the applicable fiduciary liability Insurance Policy, AEGIS Policy No. F0136A1A01.

1.33. “Releases” shall mean the releases set forth in Sections 3.1 and 3.3.

1.34. “Representatives” shall mean: attorneys, agents, directors, officers, or employees.

1.35. “Securities Actions” shall mean: In Re CMS Energy Securities Litigation, Master File No. 02-CV-72004-DT, United States District Court, Eastern District of Michigan (Hon. George Caram Steeh); and any and all cases now or hereafter consolidated therewith. “Securities Actions” specifically excludes the Action.

1.36. “Settlement” shall mean: the settlement to be consummated under this Settlement Agreement pursuant to the Final Order.

1.37. “Settlement Agreement” means this Class Action Settlement Agreement.

1.38. “Settlement Class” shall mean: the class certified by the Court in the Action, by Order filed December 27, 2004, consisting of: all Persons who were participants in or beneficiaries of the Plan at any time from August 3, 2000 through December 27, 2004.

1.40. “Successor-In-Interest” shall mean: a Person’s estate, legal representatives, heirs, successors or assigns, including successors or assigns that result from corporate mergers or other structural changes.

The Settlement is contingent on the following conditions in Sections 2.1 through 2.5:

2.1. Condition #1: Court Approval. The Settlement must be approved by the Court in accordance with the following steps.

2.1.1. Motion for Preliminary Approval of Settlement and of Notices. Class Counsel will file a motion (“Preliminary Motion”) with the Court for an order, the terms of which shall be agreed upon by the Parties, including the exhibits thereto (the “Preliminary Approval Order”), and in good faith shall take reasonable steps to (i) secure expeditious Court entry of the Preliminary Approval Order; and (ii) seek a setting for the Fairness Hearing, described in Section 2.1.4, forty-five (45) days from the mailing of the Class Notice in accordance with Section 2.1.2.

2.1.2. Issuance of Class Notice. As ordered by the Court in its Preliminary Approval Order, Named Plaintiffs and/or Class Counsel shall cause the Class Notice to be disseminated to the Plaintiffs.

2.1.3. Request by Court or Named Plaintiffs for Information: If the Court deems it necessary for the Defendants to supply information in their possession as part of the Court’s review of the Settlement Agreement, the Defendants agree to reasonably expedite provision of such information as directed by the Court. If Named Plaintiffs deem it necessary for the Defendants to supply accessible information in their possession in order to respond to any timely filed objection, the Defendants agree to reasonably expedite provision of such information, which shall be treated as Highly Confidential under the stipulated Protective Order entered by the Court in this Action. Any disputes regarding requests for information by Named Plaintiffs shall be decided by the Court.

2.1.4. The Fairness Hearing. The Court will conduct a hearing at which it will consider whether the Settlement is fair, reasonable, and adequate (“Fairness Hearing”). At or after the Fairness Hearing the Court will determine: (i) whether to enter judgment finally approving the Settlement and dismissing the Action (which judgment is referred to herein as the “Final Order”); (ii) whether the distribution of the Class Settlement Amount as provided in the Plan of Allocation should be approved or modified; and (iii) what legal fees, compensation and expenses should be awarded to Class Counsel and to Named Plaintiffs as contemplated by Section 10 of this Settlement Agreement. The Parties agree to support entry of the Final Order as contemplated by clause (i) of this Section 2.1.4; however, the Defendants agree not to take any position, and are not required to take any position, with respect to the matters described in clauses (ii) or (iii) of this Section 2.1.4. The Parties covenant and agree that they will reasonably cooperate with one another in obtaining the Final Order as contemplated hereby at the Fairness Hearing and will not do anything inconsistent with obtaining the Final Order.

2.2. Condition #2: Funding of Class Settlement Amount. The Carrier must cause to be deposited the funds as specified in 7.2 of this Settlement Agreement into the Settlement Fund in accordance therewith.

2.3. Condition #3: Finality of Final Order. The Final Order must be Final in accordance with Section 1.17 above.

2.4. Condition #4: Independent Fiduciary. The Settlement will be contingent upon U.S. Trust Company N.A., acting as independent fiduciary, (i) approving the Settlement and giving a release in its capacity as a fiduciary of the Plan and for and on behalf of the Plan which is coextensive with the release from the class members, (ii) authorizing the Settlement in accordance with Prohibited Transaction Class Exemption 2003-39, and (iii) finding that the Settlement Agreement does not constitute a prohibited transaction under ERISA § 406 (a). CMS shall move promptly to seek to obtain this authorization and finding. The Carrier shall pay all fees and expenses of the independent fiduciary. All parties shall cooperate in providing information to the independent fiduciary as requested.

2.5. Condition #5: Dismissal of Claims. The Action and all Claims asserted therein must be dismissed with prejudice.

3.1. Releases of the Releasees. Effective upon the Effective Date, Named Plaintiffs on behalf of themselves, on behalf of the Settlement Class, and on behalf of the Plan, absolutely and unconditionally release and forever discharge the Releasees from Released Claims that Named Plaintiffs, the Settlement Class or the Plan directly, indirectly, derivatively, or in any other capacity ever had, now have or hereafter may have.

3.2. Released Claims. Subject to Section 3.6 below, Plaintiffs (on behalf of each member of the Settlement Class) and the Plan shall release any and all claims of any nature whatsoever (including claims for any and all losses, damages, unjust enrichment, attorneys’ fees, disgorgement of fees, litigation costs, injunction, declaration, contribution, indemnification or any other type or nature of legal or equitable relief), against any of the Defendants, their current or former subsidiaries and affiliates, and the current or former officers, directors, employees, insurers, plan fiduciaries or agents of any Defendant, whether accrued or not, whether already acquired or acquired in the future, whether known, unknown, suspected or unsuspected, in law or equity, as well as any claim or right obtained by assignment, brought by way of demand, complaint, cross-claim, counterclaim, third party claim or otherwise (collectively, “Claims”), arising out of or in any way related to, directly or indirectly, any or all of the acts, omissions, facts, matters, transactions or occurrences during the Class Period: (i) that are, were or could have been alleged, asserted, or set forth in the Complaint, including but not limited to claims that: (a) Defendants breached ERISA fiduciary duties to Plaintiffs in connection with the acquisition and holding of Company stock by the Plan or the Plaintiffs, (b) the Director Defendants failed to appoint and/or adequately monitor Plan fiduciaries with respect to Company stock, (c) the Defendants failed to provide complete and accurate information to plan fiduciaries or participants and beneficiaries of the Plan regarding the Company or Company stock, (d) Defendants each or any one of them caused the Plan to pay more than adequate consideration for Company stock for the Plan, (e) the Defendants violated any ERISA duties related to the acquisition, disposition, or retention of Company stock by the Plan; (ii) against the applicable fiduciary liability Insurance Policy, AEGIS Policy No. F0136A1A01; (iii) that would be barred by principles of res judicata had the claims asserted in the Complaint been fully litigated and resulted in a final judgment or order; (iv) that pertain to any decision made by any of the Parties to enter into or approval this Settlement Agreement; or (v) that pertain to any conduct related to the direction to calculate, the calculation of, and/or the allocation of the Class Settlement Amount to the Plan or any participant or beneficiary of the Plan pursuant to the Plan of Allocation. Except for the obligations arising under the Settlement Agreement, Plaintiffs hereby expressly and completely waive and release any and all rights or benefits which they have or may have under Section 1542 of the California Civil Code, and any similar provision in any other jurisdiction, pertaining to the matters set forth in the Action. Section 1542 provides as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

In connection with such waiver and relinquishment, Plaintiffs acknowledge that they are aware that they have or may hereafter discover claims presently unknown or unsuspected, or facts in addition to or different from those which now are known or believed to be true, with respect to the matters set forth in the Action. Nevertheless, it is the intention of Plaintiffs, through the Settlement Agreement, and with the advice of counsel, to fully, finally and forever to settle and release all such matters. In furtherance of such intention, the releases herein given by Plaintiffs shall be and remain in effect as full and complete releases of the matters set forth in the Action, notwithstanding the discovery or existence of any such additional or different claims or facts relative hereto.

3.3. Releases of Named Plaintiffs, the Settlement Class and Class Counsel. Effective upon the Effective Date, the Defendants absolutely and unconditionally release and forever discharge the Named Plaintiffs, the Settlement Class, and Class Counsel and their Representatives (collectively, the “Plaintiff Releasees”), from any and all Claims relating to the institution or prosecution of the Action or the settlement of any Released Claim.

3.4. Reciprocal Releases among the Defendants. Effective upon the Effective Date, each Defendant absolutely and unconditionally releases and forever discharges each and every other Defendant from any and all Claims in this litigation relating to the Released Claims, including any and all Claims for contribution or indemnification for such Claims. Notwithstanding the foregoing, nothing in this Section 3.4 is intended to affect the respective rights of the Company and other Defendants relative to one another under the Company’s current corporate authority and relevant provisions of the Michigan Business Corporation Act with respect to reimbursement and advancement of an individual Defendant’s legal fees and expenses by the Company.

3.5. Scope of Releases. The releases set forth in 3.1, 3.3, and 3.4 (the “Releases”) are not intended to include the release of any rights or duties arising out of this Settlement Agreement, including the express warranties and covenants in this Settlement Agreement.

3.6. Persons and Claims Not Released. Nothing in this Settlement Agreement shall release, bar, waive, or otherwise affect any Claim that has been asserted in the Securities Actions or any defense thereto, and Defendants, the Plan and Named Plaintiffs reserve all rights with respect to positions they may take on that question in that action.

4.1.1. Named Plaintiffs and the Settlement Class covenant and agree: (i) not to file against any Releasee or the Plan any additional Claim based on or arising from any Released Claim, or re-file the Claim brought in this Action; and (ii) that the foregoing covenants and agreements shall be a complete defense to any such Claims against any of the respective Releasees.

4.1.2. Defendants covenant and agree (i) not to file against any Plaintiff Releasee or the Plan or any other Defendant any claim released under Section 3.3 or Section 3.4; and (ii) that the foregoing covenants and agreements shall be a complete defense to any such claims against any of the respective Plaintiff Releasees.

4.2. Taxation of Class Settlement Amount. Named Plaintiffs acknowledge on their own behalf, and on behalf of the Settlement Class, that the Releasees have no responsibility for any taxes due on funds once deposited in the Settlement Fund or that the Named Plaintiffs or Class Counsel receive from the Class Settlement Amount, should any be awarded pursuant to Article 10 hereof. Nothing herein shall constitute an admission or representation that any taxes will or will not be due on the Class Settlement Amount. The Company will direct the Plan administrator and trustee to treat the amounts allocated pursuant to the Plan of Allocation as restorative payments consistent with Revenue Ruling 2002-45, 2002-2 C.B. 116, 2002 WL 137852.

4.3. Cooperation. The Company shall use its best efforts to promptly provide Class Counsel, as available, in electronic database format the names and last known addresses of members of the Settlement Class and timely respond to reasonable written requests for accessible data in the Company’s custody or control necessary to implement, enforce or determine the administrability of a proposed Plan of Allocation. This information shall be treated as Highly Confidential under the stipulated Protective Order entered by the Court in this Action; provided that the Parties expressly acknowledge that the information may be used to deliver the Class Notice and/or implement the Settlement, including the Plan of Allocation.

4.4. Company Covenant Not To Restrict Sale of Its Stock. The Company covenants and agrees that it will not take any action to restrict Plan participants’ ability to sell CMS stock that is in or may be added to the Plan for a period of 4 years except in instances required to comply with applicable law or internal compliance procedures.

4.5. Company Covenant to Provide Information to Plan Fiduciaries. The Company covenants and agrees that it will take steps to see that individuals identified as fiduciaries to the Plan are provided with knowledge of their ERISA imposed duties and obligations. The Company will take steps to provide such Plan fiduciaries with regularly updated materials regarding Plan management and administration that sets forth their duties and responsibilities under ERISA.

4.6. Company Covenant to Provide Information to Plan Participants and Beneficiaries. The Plan Document and Summary Plan Description will identify the fiduciary structure of the Plan such that it is clear who exercises fiduciary responsibility for the Plan and Plan assets. In addition, to the extent not already in place, the Plan Document and Summary Plan Description shall provide contact information for participants or beneficiaries with questions regarding the Plan and Plan assets. To the extent not already accomplished by materials prepared by the current Plan record keeper and trustee, Fidelity, Plan materials shall clearly state the importance of diversification, and shall encourage participants to regularly evaluate whether their retirement plan assets are sufficiently diversified to protect against large losses.

4.7. Stay of Discovery in the Action. The Parties covenant and agree to a stay of discovery in the Action, effective for the period of time from December 19, 2005 until two weeks after any of the following events: (i) the parties fail to execute a Settlement Agreement consistent with the terms of the Settlement Terms Sheet; (ii) the Settlement is not preliminarily approved by the Court; or (iii) Final approval by the Court is not granted. Should Final approval of this settlement not occur for any reason, the Parties will be given the opportunity to proceed with depositions notwithstanding that some of the deponents will have been deposed once already in the Securities Actions during such discovery stay, and in all other respects the parties will be restored to the position they were in immediately prior to the settlement being reached. In the event discovery recommences, the Parties shall jointly stipulate for an extension of the discovery period for a length of time that is not less than the duration of the settlement stay, such that the parties are provided with a reasonable opportunity to complete discovery in this action.

5.1.1. Named Plaintiffs represent and warrant that they have not assigned or otherwise transferred any interest in any Released Claims against any Releasee, and further covenant that they will not assign or otherwise transfer any interest in any Released Claims; and

5.1.2. Pursuant to Articles 3 and 4, Named Plaintiffs represent and warrant that they shall have no surviving claim or cause of action against any of the Releasees or the Plan with respect to the Released Claims against them.

5.2. Parties’ Representations and Warranties. The Parties, and each of them, represent and warrant:

5.2.1. That they have conducted voluminous discovery; that they are voluntarily entering into this Settlement Agreement as a result of arm’s length negotiations among their counsel, with the assistance of the Mediators; that in executing this Settlement Agreement they are relying solely upon their own judgment, belief and knowledge, and the advice and recommendations of their own independently selected counsel, concerning the nature, extent and duration of their rights and claims hereunder and regarding all matters which relate in any way to the subject matter hereof; and that, except as provided herein, they have not been influenced to any extent whatsoever in executing this Settlement Agreement by any representations, statements or omissions pertaining to any of the foregoing matters by any party or by any Person representing any party to this Settlement Agreement, other than those expressly set forth in the Settlement Agreement. Each of the Parties assumes the risk of mistake as to facts or law; and

5.2.2. That they have carefully read the contents of this Settlement Agreement, and this Settlement Agreement is signed freely by each Person executing this Settlement Agreement on behalf of each of the Parties. The Parties, and each of them, further represent and warrant to each other that he, she, or it has made such investigation of the facts pertaining to the Settlement, this Settlement Agreement and all of the matters pertaining thereto, as he, she, or it deems necessary.

5.3. Signatories’ Representations and Warranties. Each individual executing this Settlement Agreement on behalf of any other Person does hereby personally represent and warrant to the other Parties that he or she has the authority to execute this Settlement Agreement on behalf of, and fully bind, each principal whom such individual represents or purports to represent.

The Parties understand and agree that this Settlement Agreement embodies a compromise settlement of disputed claims, and that nothing in this Settlement Agreement, including the furnishing of consideration for this Settlement Agreement, shall be deemed to constitute any finding of fiduciary status under ERISA or wrongdoing by any of the Defendants, or give rise to any inference of fiduciary status under ERISA or wrongdoing or admission of wrongdoing or liability in this or any other proceeding. This Settlement Agreement and the payments made hereunder are made in compromise of disputed claims and are not admissions of any factual assertions in this Action or of any liability of any kind, whether legal or factual. Moreover, the Defendants specifically deny any such liability or wrongdoing Neither the fact nor the terms of this Settlement Agreement shall be offered or received in evidence in any action or proceeding for any purpose, except (i) in an action or proceeding arising under this Settlement Agreement or arising out of or relating to the Preliminary Approval Order or the Final Order, or (ii) in an action or proceeding where the Releases provided pursuant to this Settlement Agreement may serve as a bar to recovery, or (iii) for purposes of determining a remedy in the Securities Actions.

7.1.1. No later than five (5) business days after the Settlement Terms Sheet is executed by all parties, Class Counsel shall (i) establish at a federally-insured financial institution (the “Financial Institution”); and (ii) provide to the Defendants and their Carrier any information needed to fund the Settlement Fund. The monies in the Settlement Fund, together with the value of the Company’s covenants in Sections 4.4 through 4.6, shall be considered a common fund created as a result of the Action. The Financial Institution shall agree in writing to hold the Settlement Fund and make distributions therefrom strictly in accordance with the terms and conditions of this Settlement Agreement.

7.1.2. The Settlement Fund shall include interest earned thereon, for the benefit of Named Plaintiffs, the Settlement Class, and Class Counsel, and shall be invested only in United States Treasury securities and/or securities of United States agencies backed by the full faith and credit of the United States Treasury, repurchase agreements collateralized by such securities, and mutual funds or money market accounts, provided that such funds or accounts invest exclusively in the foregoing securities. Class Counsel shall structure and manage the Settlement Fund to qualify as a qualified settlement fund under Section 468B of the Internal Revenue Code and Treasury regulations promulgated there under. It is intended that the Settlement Fund be structured and administered to preserve, to the maximum degree possible, the tax benefits associated with ERISA-qualified plans. The Parties shall not take a position in any filing or before any tax authority inconsistent with such treatment. All taxes on the income of the Settlement Fund and tax-related expenses incurred in connection with the taxation of the Settlement Fund shall be paid out of the Settlement Fund. All fees and/or expenses of the Plan trustee for allocation pursuant to the Plan of Allocation will be paid from the Settlement Fund. Class Counsel shall have signature authority over the Settlement Fund, and shall direct the Financial Institution to pay from the Settlement Fund the reasonable cost of administering the Settlement Fund without further order of the Court, which expenses shall include (i) expenses associated with the preparation and filing of all tax reports and tax returns required to be filed by the Settlement Fund; (ii) payment of any taxes owed by the Settlement Fund; (iii) expenses associated with the preparation and issuance of any required Forms 1099 associated with payments from the Settlement Fund; and (iv) fees charged and expenses incurred by the Financial Institution associated with administration of the Settlement Fund. Class Counsel may instruct the Financial Institution to reserve any portion of the Settlement Fund for the purpose of satisfying future or contingent expenses or obligations, including expenses of Settlement Fund administration or any disbursement provided in Article 8 of this Settlement Agreement. The Defendants will take no position, directly or indirectly, with respect to such matters.

7.1.3. The Parties acknowledge and agree that the Defendants shall have no authority, control, or liability in connection with the design, management, administration, investment, maintenance, or control of the Settlement Fund, or for any expenses the Settlement Fund may incur or for any taxes that may be payable by the Settlement Fund or any distributee there from.

7.2. The Class Settlement Amount. In consideration of, and expressly in exchange for, all of the promises and agreements set forth in this Settlement Agreement, the Carrier will, within ten business days after execution of the Settlement Terms Sheet by all parties (by February 27, 2006), cause to be deposited the sum of $28,000,000 plus interest since December 28, 2005 (with a deduction of $11 for the wire transfer fee) into the Settlement Fund. At least five business days prior to such funding deadline, Class Counsel shall provide to the Defendants and the Carrier any information needed to fund the Settlement Fund. The Carrier will provide Class Counsel all information and materials necessary to calculate any taxes and expenses due on the Class Settlement Amount from December 28, 2005 through the date such Class Settlement Amount is deposited into the Settlement Fund and Class Counsel agree to cause the taxes to be paid from the Settlement Fund, including taxes due on the interest earned from December 28, 2005, in a timely manner. In the event that the Court does not grant preliminary approval of the Settlement Agreement or if the Settlement Agreement does not become effective for any reason, Class Counsel will return the money held in escrow, together with the interest thereon, to the Carrier. In the event final approval is not granted by the Court, the only deductions from this Settlement Fund before the amount is returned to the Carrier will be the expenses associated with class notice and any costs incurred to date by Class Counsel in connection with the implementation of the Settlement Agreement, including expenses necessary to calculate and allocate the Class Settlement Amount and any related taxes or fees associated with establishment and maintenance of the Settlement Fund.

7.3. Sole Monetary Contribution. The Class Settlement Amount shall be the full and sole monetary contribution made by or on behalf of the Defendants in connection with the Settlement effected between Named Plaintiffs and the Defendants under this Settlement Agreement. The Class Settlement Amount specifically covers any claims for costs and attorneys’ fees by Named Plaintiffs, on their behalf or on behalf of the Settlement Class, as well as any costs or expenses of the Class Notice. Except as otherwise specified in this Settlement Agreement, the Parties shall bear their own costs and expenses (including attorneys’ fees) in connection with effectuating the Settlement and securing all necessary court orders and approvals with respect to the same.

8.1. Expenses of Class Notice. Class Counsel shall direct the Financial Institution in writing to disburse from the Settlement Fund an amount approved by the Court for the payment of costs of the Class Notice. If the Settlement Agreement is terminated for any reason or if any condition stated in Article 2 above is not satisfied or waived, no Person shall have an obligation to reimburse to the Settlement Fund the costs of the Class Notice, or other costs or expenses of the Settlement Fund charged to the Settlement Fund under this Settlement Agreement.

8.2. Disbursements from the Settlement Fund. Class Counsel shall direct the Financial Institution to disburse money from the Settlement Fund as follows:

8.2.2. For Named Plaintiffs’ compensation. As provided in Section 10.2 herein.

8.2.3. For taxes and expenses of the Settlement Fund. As provided in Section 7.1.2 herein.

8.2.4. For the Plan of Allocation. Class Counsel shall propose to the Court a Plan of Allocation (“Plan of Allocation”) that shall provide for the allocation of the Settlement Fund net of the disbursements called for in sections 8.2.1, 8.2.2 and 8.2.3 (“Net Proceeds”). Such Plan of Allocation will provide the method by which the specific dollar amount to be allocated by the Plan as to each member of the Settlement Class will be calculated. On or after the Effective Date, Class Counsel shall direct the Financial Institution to disburse the Net Proceeds to the Plan for distribution by the Plan’s trustee in accordance with the Plan of Allocation. The Defendants will be excluded from the Plan of Allocation. The Plan of Allocation is a matter separate and apart from the Settlement between the Parties, and no decision by the Court concerning the Plan of Allocation shall affect the validity of the Settlement Agreement or finality of the Settlement in any manner. Nothing herein shall constitute approval or disapproval of the Plan of Allocation by the Releasees, and the Releasees shall have no responsibility or liability for the Plan of Allocation and shall take no position for or against the Plan of Allocation before the Court, other than as set forth in the following paragraph.

8.2.5. Defendants shall have no responsibility for structuring the content or fairness of the Plan of Allocation but will review it for feasibility only before submission to the Court. Reasonable and necessary costs incurred by Class Counsel and any third parties retained in connection with implementation of the Plan of Allocation shall be paid from the Settlement Fund, as approved by the Court. In the event that it is necessary and appropriate for CMS to retain a third party with respect to implementation or allocation of the Plan of Allocation, CMS shall provide advance notice to Class Counsel, and provided Class Counsel do not object, Class Counsel will pay the reasonable costs of such third party out of the Settlement Fund subject to the approval of the Court. Class Counsel shall not unreasonably object to the retention of such third-parties and will in good faith consider the matter with the sole purpose of ensuring that settlement funds are not expended unreasonably or unnecessarily. In the event that the parties have any dispute regarding the retention of any third party, they shall petition the Court for a prompt resolution.

9.1. Termination. Automatic termination of this Settlement Agreement, thereby making the Settlement Agreement null and void, will occur under the following circumstances:

9.1.1. If the Court declines to approve the Settlement, then this Settlement Agreement shall automatically terminate and become null and void.

9.1.2. If any Court issues a final order modifying the Settlement Agreement, and if, within ten (10) days after the date of any such ruling, the Parties have not agreed in writing to proceed with all or part of the Settlement Agreement as modified by the Court or the Parties, then this Settlement Agreement shall automatically terminate and become null and void.

9.1.3. If any or all of the conditions of Article 2 of this Settlement Agreement are not fully satisfied or waived in accordance with their terms and on the timetables set forth in that Article and in Section 7.2, then this Settlement Agreement shall terminate and become null and void, except as provided in Section 9.2.

9.2. Consequences of Termination of the Settlement Agreement. If the Settlement Agreement is terminated and rendered null and void for any reason specified in Section 9.1, the following shall occur:

9.2.1. Upon written request by counsel for Defendants or counsel for the Carrier, Class Counsel shall within ten (10) days after the date of termination of the Settlement Agreement notify the Financial Institution in writing to return to the Carrier the amounts contributed to the Settlement Fund, with all net income earned thereon, after deduction of the amount earlier disbursed or owed for the Class Notice, the expenses charged by the Financial Institution, and any expense of the Settlement Fund disbursed or owed pursuant to Section 7.1.2, directing the Financial Institution to effect such return within ten (10) days.

9.2.2. The Action shall for all purposes with respect to the Parties revert to its status as of the day immediately before the Agreement Execution Date, and the parties shall be restored to the position they were prior to the Settlement being reached.

9.2.3. All provisions of this Settlement Agreement shall be null and void except as otherwise provided herein. Neither the fact nor the terms of this Settlement Agreement shall be offered or received in evidence in any action or proceeding for any purpose, except in an action or proceeding arising under this Settlement Agreement.

10.1. Application for Attorneys’ Fees and Expenses. Pursuant to the common fund doctrine and/or any applicable statutory fee provision, Class Counsel may apply to the Court for an award to Class Counsel of attorneys’ fees, and for reimbursement of expenses, to be paid from the Settlement Fund. Class Counsel may apply to the Court for compensation to Named Plaintiffs, payable solely from the Settlement Fund, and Named Plaintiffs shall be entitled to receive such compensation from the Settlement Fund to the extent awarded by the Court. The Defendants shall take no position on Class Counsel’s application for fees, costs, and reimbursement of expenses or on any such applications by Named Plaintiffs.

10.2. Disbursement of Attorneys’ Fees and Expenses and Named Plaintiffs Compensation. Upon the later of (i) entry of an order by the Court awarding payment of attorneys’ fees and expenses from the Settlement Fund and/or payment of Named Plaintiffs compensation from the Settlement Fund, and (ii) the Effective Date, Class Counsel may instruct the Financial Institution in writing to disburse such payments from the Settlement Fund. If at the time of any disbursement from the Settlement Fund pursuant to Article 8 there shall be a pending application for attorneys’ fees or expenses or Named Plaintiffs compensation, there shall be reserved in the Settlement Fund an amount equal to the amount of the pending application, until such time as the Court shall rule upon such application.

11.1. Governing Law. This Settlement Agreement shall be governed by the laws of the State of Michigan without giving effect to the conflict of laws or choice of law provisions thereof, except to the extent that the law of the United States governs any matter set forth herein, in which case such federal law shall govern.

11.2. Destruction of Materials. Except for attorney notes, pleadings, transcripts, and other court submissions and exhibits thereto, each Party that received material, including confidential material obtained in formal discovery (as defined in the Stipulation and Order Re Confidentiality entered by the Court on November 16, 2005), material obtained in informal discovery (including initial disclosure material provided pursuant to Federal Rule of Civil Procedure 26), information provided for purposes of settlement, and all other confidential material, from an opposing Party in the course of litigating this Action, shall, within thirty (30) days after the Effective Date, certify that all such copies of such materials received from any other Party, in its custody or control, including in the possession of consultants of the opposing Party, have been destroyed.

11.3. Severability. The provisions of this Settlement Agreement are not severable.

11.4. Amendment. Before entry of the Final Order, the Settlement Agreement may be modified or amended only by written agreement signed by or on behalf of all Parties. Following entry of the Final Order, the Settlement Agreement may be modified or amended only by written agreement signed on behalf of all Parties, and approved by the Court.

11.5. Waiver. The provisions of this Settlement Agreement may be waived only by an instrument in writing executed by the waiving party. The waiver by any party of any breach of this Settlement Agreement shall not be deemed to be or construed as a waiver of any other breach, whether prior, subsequent, or contemporaneous, of this Settlement Agreement.

11.6. Construction. None of the Parties hereto shall be considered to be the drafter of this Settlement Agreement or any provision hereof for the purpose of any statute, case law or rule of interpretation or construction that would or might cause any provision to be construed against the drafter hereof.

11.7. Principles of Interpretation. The following principles of interpretation apply to this Settlement Agreement.

11.7.1. Headings. The headings of this Settlement Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Settlement Agreement.

11.7.2. Singular and Plural. Definitions apply to the singular and plural forms of each term defined.

11.7.3. Gender. Definitions apply to the masculine, feminine, and neuter genders of each term defined.

11.7.4. References to a Person. References to a Person are also to the Person’s permitted successors and assigns.

11.7.5. Terms of Inclusion. Whenever the words “include,” “includes” or “including” are used in this Settlement Agreement, they shall not be limiting but rather shall be deemed to be followed by the words “without limitation.”

11.8. Further Assurances. Each of the Parties agrees, without further consideration and as part of finalizing the Settlement hereunder, that they will in good faith execute and deliver such other documents and take such other actions as may be necessary to consummate and effectuate the subject matter and purpose of this Settlement Agreement.

11.9. Survival. All representations, warranties and covenants set forth in this Settlement Agreement shall be deemed continuing and shall survive the Effective Date. The provisions of Section 9 above shall apply in the event of the termination of this Settlement Agreement.

11.10. Notices. Any notice, demand or other communication under this Settlement Agreement (other than the Class Notice, or other notices given at the direction of the Court) shall be in writing and shall be deemed duly given upon receipt if it is addressed to each of the intended recipients as set forth below and personally delivered, sent by registered or certified mail (postage prepaid), sent by confirmed facsimile, or delivered by reputable express overnight courier:

Justin Campbell
Robin L. Harrison
Campbell, Harrison & Dagley, LLP
4000 Two Houston Center
909 Fannin Street
Houston, TX 77010
Fax: (713) 752-2330

Ellen M. Doyle
Malakoff Doyle & Finberg, P.C.
437 Grant Street, Suite 200
Pittsburgh, PA 15219

J. Brian McTigue
Greg Porter
Cornish F. Hitchcock
McTigue Law Firm
5301 Wisconsin Avenue NW, Suite 350
Washington, DC 20015

Wilbur H. Boies, P.C.
Nancy G. Ross
Chris C. Scheithauer
McDermott Will & Emery LLP
227 West Monroe Street, Suite 4400
Chicago, IL 60606-5096
Fax: (312) 984-7700

Michael G. Wilson
Consumers Energy Company
One Energy Plaza
212 West Michigan Avenue
Jackson, MI 49201
Fax: (517) 768-3141

James K. Robinson
Cadwalader, Wickersham & Taft LLP
1201 F Street NW, Suite 1100
Washington, DC 20004
Fax: (202) 862-2400

James G. Munisteri
Gardere Wynne Sewell LLP
1000 Louisiana, Suite 3400
Houston, TX 77002-5007
Fax: (713) 276-5555

Neil A. Steiner
Dechert LLP
30 Rockefeller Plaza
New York, NY 10112-2200
Fax: (212) 698-3599

Ryan T. Scarborough
Williams & Connolly LLP
725 Twelfth Street NW
Washington, DC 20005-5901
Fax: (202) 434-5029

Joseph J. Reilly
Sullivan & Cromwell L.L.P.
1701 Pennsylvania Avenue, N.W.
Washington, DC 20006
Fax: (202) 293-6330

Lewis J. Liman
Jeffrey Jordan
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, NY 1006

Martin B. Schnabel
AEGIS Insurance Services, Inc.
10 Exchange Place
Jersey City, NJ 07302
Fax: (201) 462-7269

Darius N. Kandawalla
Bailey Cavalieri LLC
10 West Broad Street, Suite 2100
Columbus, OH 43215
Fax: (614) 229-3255

Howard Shapiro
Proskauer Rose LLP
LL&E Tower, Suite 1100
909 Poydras Street
New Orleans, LA 70112-4017

Any Party may change the address at which it is to receive notice by written notice delivered to the other Parties in the manner described above.

11.11. Entire Agreement. This Settlement Agreement contains the entire agreement among the Parties relating to this Settlement. It specifically supersedes any settlement terms or Settlement Agreements relating to the Defendants that were previously agreed upon orally or in writing by any of the Parties.

11.12. Counterparts. This Settlement Agreement, and any amendments thereto, and waivers of conditions, may be executed by exchange of faxed executed signature pages, and any signature transmitted by facsimile for the purpose of executing this Settlement Agreement shall be deemed an original signature for purposes of this Settlement Agreement. This Settlement Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same instrument.

11.13. Binding Effect. This Settlement Agreement binds and inures to the benefit of the Parties hereto, their assigns, heirs, administrators, executors and successors.

11.14. Agreement Execution Date. The date on which the final signature is affixed below shall be the Agreement Execution Date.

IN WITNESS WHEREOF, the Parties have executed this Settlement Agreement on the dates set forth below.



FOR PLAINTIFFS:
Dated:________________________		By: ___________________________________
		Lynn Lincoln Sarko
		Derek Loeser
		Gary Gotto
		Amy Hanson
		Keller Rohrback L.L.P.
		1201 Third Avenue, Suite 3200
		Seattle, WA 98101-3052
		Class Counsel for Plaintiffs

Dated: _______________________ _		By: ___________________________________
		Justin Campbell
		Campbell, Harrison & Dagley, LLP
		4000 Two Houston Center
		909 Fannin Street
		Houston, TX 77010
		Class Counsel for Plaintiffs

Dated: _______________________ _		By: ___________________________________
		Ellen M. Doyle
		Malakoff Doyle & Finberg, P.C.
		437 Grant Street, Suite 200
		Pittsburgh, PA 15219
		Class Counsel for Plaintiffs

Dated:
________________________		By: ___________________________________
		J. Brian McTigue
		Gregory Porter
		Cornish F. Hitchcock
		McTigue Law Firm
		5301 Wisconsin Ave NW, Suite 350
		Washington, D.C. 20015
		Class Counsel for Plaintiffs

Dated: _______________________ _		By: ___________________________________
		Jeffrey T. Meyers (P34348)
		Morgan & Meyers PLC
		3200 Greenfield, Suite 260
		Dearborn, MI 48120-1802
		Liaison Counsel for Plaintiffs

Dated: _______________________ _		By: ___________________________________
		Barry D. Adler (P30557)
		Adler & Associates
		30300 Northwestern Highway, Suite 304
		Farmington Hills, MI 48334
		Liaison Counsel for Plaintiffs

FOR DEFENDANTS:

Dated: _______________________ _		By: ___________________________________
		Wilbur H. Boies, P.C.
		Nancy G. Ross
		Chris C. Scheithauer
		McDermott Will & Emery LLP
		227 West Monroe Street, Suite 4400
		Chicago, IL 60606-5096
		Counsel for Defendants CMS Energy
		Corp., CMS Marketing Services and
		Trading Company, Laura L. Mountcastle,
		Victor J. Fryling, Estate of Thomas
		McNish, John M. Deutch, James J.
		Duderstadt, Kathleen R. Flaherty, Earl
		D. Holton, Percy A. Pierre, Kenneth L.
		Way, Kenneth Whipple, and John B.
		Yasinsky

Dated: _______________________ _		By: ___________________________________
		Todd A. Holleman
		Miller, Canfield, Paddock
		& Stone, P.L.C.
		150 West Jefferson, Suite 2500
		Detroit, MI 48226-4415
		Counsel for Defendants CMS Energy
		Corp., CMS Marketing Services and
		Trading Company, Laura L. Mountcastle,
		Victor J. Fryling, Estate of Thomas
		McNish, John M. Deutch, James J.
		Duderstadt, Kathleen R. Flaherty, Earl
		D. Holton, Percy A. Pierre, Kenneth L.
		Way, Kenneth Whipple, and John B.
		Yasinsky

Dated: _______________________ _		By: ___________________________________
		Michael G. Wilson
		Consumers Energy Company
		One Energy Plaza
		212 West Michigan Avenue
		Jackson, MI 49201
		Counsel for Defendant Consumers Energy
		Company

Dated: _______________________ _		By: ___________________________________
		James K. Robinson
		Cadwalader, Wickersham & Taft LLP
		1201 F Street NW, Suite 1100
		Washington, DC 20004
		Counsel for Defendant Preston D. Hopper

Dated: _______________________ _		By: ___________________________________
		William A. Sankbeil
		Kerr Russell & Weber
		Suite 2500, Detroit Center
		500 Woodward Avenue
		Detroit, MI 48226
		Counsel for Defendant Tamela Pallas

Dated: _______________________ _		By: ___________________________________
		James G. Munisteri
		Gardere Wynne Sewell LLP
		1000 Louisiana, Suite 3400
		Houston, TX 77002-5007
		Counsel for Defendant Tamela Pallas

Dated: _______________________ _		By: ___________________________________
		Samuel C. Damren
		Dykema Gossett, PLLC
		400 Renaissance Center
		Detroit, MI 48243
		Counsel for Defendant David W. Joos

Dated: _______________________ _		By: ___________________________________
		Neil A. Steiner
		Dechert LLP
		30 Rockefeller Plaza
		New York, NY 10112-2200
		Counsel for Defendant David W. Joos

Dated: _______________________ _		By: ___________________________________
		Philip J. Kessler
		Sheldon Klein
		Butzel Long, P.C.
		150 West Jefferson, Suite 900
		Detroit, MI 48226-4450
		Counsel for Defendant William T.
		McCormick, Jr.

Dated: _______________________ _		By: ___________________________________
		Ryan T. Scarborough
		Williams & Connolly LLP
		725 Twelfth Street NW
		Washington, DC 20005-5901
		Counsel for Defendant William T.
		McCormick, Jr.

Dated: _______________________ _		By: ___________________________________
		Joseph J. Reilly
		Sullivan & Cromwell L.L.P.
		1701 Pennsylvania Avenue, N.W.
		Washington, DC 20006
		Counsel for William U. Parfet

Dated: _______________________ _		By: ___________________________________
		Richard A. Rossman
		James D. VandeWyngearde
		PEPPER HAMILTON LLP
		100 Renaissance Center, 36th Floor
		Detroit, MI 48243-1157
		Counsel for Defendant Alan Wright

Dated: _______________________ _		By: ___________________________________
		Lewis J. Liman
		Jeffrey Jordan
		CLEARY, GOTTLIEB, STEEN
		& HAMILTON LLP
		One Liberty Plaza
		New York, NY 10006
		Counsel for Defendant Alan Wright

THIS STIPULATION AND AGREEMENT OF SETTLEMENT (the “Settlement Agreement”) is made and entered into on February 28, 2006, pursuant to Rule 23 of the Federal Rules of Civil Procedure. This Settlement Agreement is entered into on behalf of plaintiffs and the Class (as defined in Section l(c) hereof), by and through plaintiffs’ Lead Counsel (as defined in Section 1(j) hereof), and behalf of CMS Field Services (now known as Cantera Gas Company LLC) and CMS Marketing Services & Trading Company (now known as CMS Energy Resource Management Company) (both entities collectively, “CMS”), by and through its counsel of record in this action.

WHEREAS, Representative Plaintiffs (as defined in Section 1(q) hereof) have alleged, among other things, that CMS acted unlawfully by manipulating and aiding and abetting the alleged manipulation of the prices of natural gas futures contracts and options on natural gas futures contracts traded on the NYMEX division of the New York Mercantile Exchange Inc. (hereinafter referred to as “NYMEX”) in violation of the Commodity Exchange Act (“CEA”), 7 U.S.C. § 1 et seq.;

WHEREAS, CMS denies each and every one of Representative Plaintiffs’ allegations of unlawful conduct, and moved to dismiss plaintiffs’ complaint on the grounds that the substantive allegations therein fail to state a claim;

WHEREAS, plaintiffs’ Lead Counsel consider the settlement set forth herein to be fair, reasonable, adequate and in the best interests of plaintiffs, including all Members of the Class (as defined in Section 1(e) hereof), and have determined that it is in the best interests of the Class to enter into this Settlement Agreement in order to avoid the uncertainties of this complex litigation, and to assure a benefit to the Class;

WHEREAS, CMS has concluded, despite its belief that it is not liable for the claims asserted and has good defenses thereto, that it will enter into this Settlement Agreement to avoid the further expense, inconvenience and burden of this protracted litigation, and the distraction and diversion of its personnel and resources, and to put to rest this controversy, and to avoid the risks inherent in uncertain complex litigation, and to avoid the expense and risks inherent in any possible litigation raising similar claims;

WHEREAS, arm’s-length settlement negotiations have taken place between Representative Plaintiffs and CMS, and this Settlement Agreement has been reached, subject to the final approval of the Court; and

WHEREAS, for purposes of this Settlement Agreement only, the parties hereto stipulate to certification of a Class for settlement purposes pursuant to Rule 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure;

NOW THEREFORE, it is agreed by the undersigned, on behalf of CMS and the Class, that the Action (as defined in Section l(a) hereof) and the Released Claims (as defined in Section l(o) hereof) be settled, compromised and dismissed on the merits and with prejudice as to CMS, and without costs as to Representative Plaintiffs or CMS, subject to the approval of the Court, on the following terms and conditions:

The words and terms used in this Settlement Agreement which are expressly defined below shall have the meaning ascribed to them.

(a) “Action” shall mean In re Natural Gas Commodity Litigation, 03 Civ. 6186 (VM), and each and every individual action that has been consolidated therein including, without limitation, Cornerstone Propane Partners, L.P. v. Reliant Energy, et al. (S.D.N.Y. No. 03 Civ. 6186), Roberto E. Calle Gracey v. American Electric Power Co., Inc., et al. (S.D.N.Y. No. 03 Civ. 7750), Dominick Viola v. Reliant Energy, et al. (S.D.N.Y. No. 03 Civ. 9039); Cornerstone Propane Partners, L.P. v. Coral Energy Resources L.P., et al. (S.D.N.Y. No. 03 Civ. 8320), Cornerstone Propane Partners, L.P., et al. v. e-prime, Inc., et al. (S.D.N.Y. No. 04 Civ. 758), and Cornerstone Propane Partners, L.P., et al. v. Western Gas Resources, Inc. et al. (S.D.N.Y. No. 04 Civ. 7415).

(c) The “Class” shall mean all Persons (as defined in Section 1(n) hereof) who purchased, sold, or settled NYMEX Natural Gas Contracts (as defined in Section l(k) hereof), as an opening or closing transaction or otherwise, between June 1, 1999 and December 31, 2002, inclusive. Excluded from the Class are the Defendants (as defined in Section l(l) hereof) in the Action, their employees, any parents, subsidiaries or affiliates of the Defendants, any entity in which any of the Defendants has a controlling interest or had a controlling interest during the Class Period, and the legal representatives, heirs, successors or assigns of any of the Defendants.

(d) “Class Counsel” shall mean counsel of record for the Class in the Action.

(e) “Class Member,” “Member,” or “Member of the Class” shall mean a Person who falls within the definition of the Class as set forth in Section 1(c) and who has not timely requested exclusion from the Class.

(f) “Class Notice” shall mean notice given to the Class pursuant to this Settlement Agreement in the manner and form approved by the Court and which is in compliance with Rule 23 of the Federal Rules of Civil Procedure.

(g) “Class Period” shall mean the period of June 1, 1999 through December 31, 2002, inclusive.

(h) “Effective Date” shall mean the date set forth in Section 11 of this Settlement Agreement.

(i) “Final Judgment” shall mean a final judgment and order of dismissal substantially in the form of Exhibit B to this Settlement Agreement, which is to be entered by the Court finally approving the terms of this Settlement Agreement and dismissing this Action with prejudice as to CMS.

(j) “Lead Counsel” shall mean Finkelstein, Thompson & Loughran, Labaton Sucharow & Rudoff LLP, Lovell Stewart Halebian LLP, and Lowey Dannenberg Bemporad & Selinger, P.C., acting pursuant to the authority conferred in Pre-Trial Order No. 1 and subsequent stipulations and orders.

(k) A “NYMEX Natural Gas Contract” shall mean any commodity futures (including any option thereon), basis, or swap contract related to natural gas that was traded on NYMEX, or any combination thereof, that was transacted or settled during the Class Period.

(l) “Defendants” shall mean American Electric Power Co., Inc., AEP Energy Service, Inc., Aquila Energy Marketing Corp., Aquila Merchant Services, Inc., Calpine Energy Services, L.P., Cinergy Marketing and Trading, L.P., Cinergy Corp., CMS, Cook Inlet Energy Supply LLC, Coral Energy Holding LP, Coral Energy Resources, LP, Duke Energy Trading and Marketing, LLC, Dynegy Marketing and Trade, West Coast Power LLC, El Paso Merchant Energy, L.P., El Paso Corp., EnCana Corp., WD Energy Services, Inc., Enserco Energy, Inc., Entergy-Koch Trading, L.P., e prime, Inc., MidAmerican Energy Co., Mieco Inc., ONEOK Energy and Marketing Co., L.P, ONEOK Energy Marketing and Trading Company, L.P., ONEOK, Inc., Reliant Energy Services, Inc., Sempra Energy Trading, Western Gas Resources, Inc., Williams Power Company, Inc. (formerly known as Williams Energy Marketing & Trading Co., Inc.), The Williams Companies, Inc. as well as any other Persons who or which may hereafter be named as defendants in the above-captioned litigation and Action.

(m) “Other Defendant” shall mean any and/or all Defendants other than CMS.

(n) “Person” shall mean an individual, corporation, partnership, association, proprietorship, trust, governmental or quasi-governmental body or political subdivision or any agency or instrumentality thereof, or any other entity or organization.

(o) “Released Claims” shall mean those claims identified in Section 5 of this Settlement Agreement.

(p) “Released Parties” shall mean CMS, CMS’s predecessors, CMS’s successors, and the present or former members, principals, officers, directors, employees, agents, assigns, attorneys, insurers, shareholders, advisors, parents, subsidiaries, affiliates, joint ventures, partnerships and associates (as defined in SEC Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934) of CMS, CMS’s predecessors and/or CMS’s successors’, in any capacity related to CMS and its predecessors or successors, but not in any capacity related to any of the Other Defendants; and each of their assigns, representatives, heirs, executors and administrators (and present or former members, principals, officers, directors, employees, agents, assigns, attorneys, insurers, shareholders, advisors, parents, subsidiaries, affiliates, joint ventures, partnerships or associates of all such parents, subsidiaries, affiliates, joint ventures, partnerships or associates in any capacity related to CMS but not in any capacity related to any of the Other Defendants). Released Parties shall, with respect to CMS and this Settlement Agreement, not include (i) any of the Other Defendants or (ii) any of the foregoing Persons in any capacity related to any of the Other Defendants.

(q) “Representative Plaintiffs” shall mean each Person named as a plaintiff in the Action who was not subsequently withdrawn as a plaintiff.

(r) “Settlement Amount,” with respect to CMS and this Settlement Agreement, shall mean the amount to be paid by CMS into an In re Natural Gas Commodity Litigation escrow account as set forth in Section 3 hereof, and interest thereon.

(s) “Settling Plaintiffs” shall mean the Representative Plaintiffs and other Members of the Class, including their successors and assigns, who have not timely opted out of the settlement and excluded themselves from the Class pursuant to Fed. R. Civ. P. 23(c).

(t) “Supplemental Agreement” shall mean the supplemental agreement being entered into contemporaneously with this Settlement Agreement by the parties hereto, which shall be considered part of this Settlement Agreement as if fully incorporated herein. The terms of the Supplemental Agreement shall be disclosed only as permitted by Section 15 of this Settlement Agreement or as otherwise Ordered by the Court.

(u) “Taxes” shall mean any and all federal, state and local taxes payable on interest or other income attributable to the Settlement Amount.

(v) “Tax Expenses” shall mean expenses incurred in the computation, reporting and payment of Taxes, as approved by the Court.

Solely for the purposes of this Settlement Agreement, and without prejudice to the parties’ positions in the event the Settlement Agreement is terminated for any reason, and for the exclusive benefit of the Settling Plaintiffs, CMS hereby consents to the certification of the Class, and plaintiffs agree to propose such Class to the Court and to provide appropriate evidentiary support therefor as part of the parties’ efforts to obtain approval of this Settlement Agreement.

(a) Subject to the terms of this Settlement Agreement (including the Supplemental Agreement), and in settlement of the claims of the Class defined in Section 1(c) and of all claims in the Action, and in consideration of the release set forth in Section 5 hereof, CMS agrees that it shall pay a total of $6,975,000.00 (the “Settlement Amount”), within ten (10) business days after the preliminary approval of the Settlement by the Court, into an interest bearing, segregated In re Natural Gas Commodity Litigation escrow account (the “Settlement Fund”) which shall be maintained by Lead Counsel under supervision of the Court, and shall be distributed solely at such times, in such manner and to such Persons as shall be directed by subsequent orders of the Court. The parties intend that the Settlement Fund be treated as a “qualified settlement fund” within the meaning of Treasury Regulation § 1.468B. Lead Counsel shall ensure that the Settlement Fund at all times complies with Treasury Regulation § 1.468B in order to maintain its treatment as a qualified settlement fund. To this end, Lead Counsel shall ensure that the Settlement Fund is approved by the Court as a qualified settlement fund and that any escrow agent or other administrator of the Settlement Fund complies with all requirements of Treasury Regulation § 1.468B-2.

(b) If CMS fails to pay all or any part of the Settlement Amount when due, then Lead Counsel, on ten (10) days’ written notice to CMS’s counsel, during which 10-day period CMS shall have the opportunity to cure the default without penalty, may withdraw from this Settlement Agreement or elect to enforce it. CMS’s obligation to pay may be enforced in the Action as provided by the Federal Rules of Civil Procedure.

(c) Other than payment of the Settlement Amount into the Settlement Fund, CMS shall have no financial obligations and shall not be liable for any further amounts pursuant to this Settlement Agreement. The Settling Plaintiffs shall look solely to the Settlement Fund for settlement and satisfaction against CMS of all claims that are released hereunder. Except as provided herein, or by subsequent order of the Court, no Class Member shall have any interest in the Settlement Fund or any portion thereof.

CMS agrees that, pursuant to this Settlement Agreement, it will provide the following cooperation insofar as providing such cooperation shall not require CMS to provide any information protected from disclosure by any privilege or work product protection:

(a) CMS shall at Plaintiffs’ expense, to the extent required (under Federal Rule of Evidence 901(a)) for trial of the Action, authenticate any documents or materials produced in this Action. Such requests by plaintiffs for authentication will be of reasonable scope and upon reasonable notice to CMS, and shall not require CMS to retain any third party, including former employees, to comply with this section; and

(b) CMS shall provide to Lead Counsel copies of all of its records of its natural gas price reports to natural gas price index publications and all of its databases of its natural gas trades, insofar as it provided such reports and databases, as of the date this Settlement Agreement is executed, to the U.S. Commodity Futures Trading Commission in connection with In re CMS Marketing Services and Trading Company and CMS Field Services, Inc., CFTC Docket No. 04-05, or certify in writing that all such reports and databases have been produced to Representative Plaintiffs in this matter;

(c) CMS shall accept service of any trial subpoenas of CMS for the trial of the Action. By agreeing to accept service, CMS does not waive its right to object to any trial subpoena on any grounds whatsoever.

(a) As an express and material condition of this Settlement Agreement, upon the Effective Date, the Settling Plaintiffs shall be deemed to have, and by operation of the Final Judgment shall have, fully, finally and forever released and discharged the Released Parties from, and shall covenant not to sue the Released Parties for or with respect to, all manner of claims, rights, demands, actions, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, judgments, extents, executions, and causes of action in law, admiralty or equity, whether class, individual, or otherwise in nature, damages, whenever incurred, and liabilities of any nature whatsoever, including costs, expenses, penalties and attorneys’ fees, whether known or unknown, suspected or unsuspected, whether concealed or hidden, or in law, admiralty or equity, that the Settling Plaintiffs, or any of them, individually, or as a class (whether or not they make a claim upon or participate in the Settlement Fund), ever had, now have or hereafter can, shall or may have, against the Released Parties arising from or relating in any way to trading during the Class Period in NYMEX Natural Gas Contracts (including purchasing, selling, or holding any NYMEX Natural Gas Contract, or taking or making delivery of physical natural gas pursuant to any NYMEX Natural Gas Contract, or any combination thereof, whether as a hedger or speculator), whether or not asserted in the Action, including, without limitation, claims which (i) arise from or relate in any way to any conduct complained of in any complaint filed in the Action, (ii) have been asserted or could have been asserted in any state or federal court or any other judicial or arbitral forum against the Released Parties or any one of them, (iii) arise under or relate to any federal or state commodity price manipulation law, any state or federal unfair or deceptive business or trade practices law, or other law or regulation, or common law, including, without limitation, the CEA, the federal antitrust laws (as that term is defined in 15 U.S.C. § 12), or state antitrust laws and/or (iv) the claims brought in the Action. The Final Judgment shall expressly enjoin the Settling Plaintiffs from asserting any such claims against the Released Parties. Notwithstanding the foregoing, and in addition to the foregoing, in the event that the Settling Plaintiffs settle the Action with any Other Defendant, the scope of the release and covenant not to sue provided herein by the Settling Plaintiffs to Released Parties shall be at least as broad as the scope of the release provided by the Settling Plaintiffs to any Other Defendant in this Action and this release shall be deemed to be expanded in the event any broader release is subsequently provided by the Settling Plaintiffs to any Other Defendant in the Action. Notwithstanding the provisions of Section 21, any such expansion of the release shall be effected without need for further writing.

(b) Except for the obligations arising under this Settlement Agreement, each Settling Plaintiff hereby expressly and completely waives and releases any and all rights or benefits which they have or may have under Section 1542 of the California Civil Code, and any similar provision in any other jurisdiction. Section 1542 provides as follows:

Each Settling Plaintiff expressly waives all of these rights notwithstanding that such Settling Plaintiff may hereafter discover facts other than or different from those which he, she, or it knows, believes, or suspects with respect to the subject matter of this Section 5. Nevertheless, it is the intention of each Settling Plaintiff, through this Settlement Agreement, and with the ability to seek independent advice of counsel, to fully, finally and forever settle and release all such claims. In furtherance of such intention, the releases herein given by the Settling Plaintiffs shall be and remain in effect as full and complete releases of the claims set forth in the Action, notwithstanding the later discovery or existence of any such additional or different facts relative hereto or the later discovery of any such additional or different claims that would fall within the scope of the release provided in Section 5(a) of this Settlement Agreement, as if such facts or claims had been known at the time of this release.

(c) As an express and material condition of this Settlement Agreement, the Court shall enter an order, in the Final Judgment and Order of Dismissal or otherwise, barring claims by the Other Defendants against the Released Parties for contribution or indemnification (however denominated) for all or a portion of any amounts any Other Defendant has paid or may pay in the Action by way of settlement, judgment, or otherwise.

(a) Within thirty (30) days of the date hereof, Lead Counsel shall submit to the Court this Settlement Agreement and shall move the Court for preliminary approval of the settlement and certification solely for settlement purposes the Class as defined in Section 1(c) hereof. Representative Plaintiffs’ Lead Counsel shall also inform the Court of the terms of the Supplemental Agreement.

(b) Lead Counsel shall request that the Court make a decision promptly on the motion for preliminary approval of the settlement and certification of a Class for settlement purposes, or that a hearing on the motion for preliminary approval of the settlement be held within 20 days of the date of such motion.

(c) The proposed form of order preliminarily approving the settlement shall be substantially in the form attached hereto as Exhibit A.

Lead Counsel may ask the Court to combine the notice of this settlement with the class notice to be given generally, pursuant to Rule 23(c), (d) and (e) of the Federal Rules of Civil Procedure. CMS will not unreasonably withhold its consent to such request, but shall have the right to comment upon the form, content and manner of notice. Any notice sent pursuant to this Settlement Agreement shall be approved in advance by the Court. The Representative Plaintiffs shall be solely responsible for providing all necessary notice to the Class in the manner directed by the Court. CMS shall have no responsibility or duty to identify any Class Members and shall share no responsibility or duty, financial or otherwise, for identifying or providing notice to the Class.

Notwithstanding anything else in this Settlement Agreement, CMS may, in CMS’s discretion, but is not required to, unilaterally withdraw from and terminate this Settlement Agreement if the threshold for requests for exclusion from the settlement Class has been reached as defined in the Supplemental Agreement. Lead Counsel shall provide the Supplemental Agreement to the Court in camera at the time the Motion for Preliminary Approval is filed. Lead Counsel shall abide by all requirements and deadlines set forth in the Supplemental Agreement.

In connection with the hearing to be set by the Court on the motion for final approval of this Settlement Agreement, the parties hereto shall jointly seek entry of the Final Judgment which shall be substantially in the form attached as Exhibit B:

(a) finally certifying solely for settling purposes the Class as defined in Section 1(c) hereof;

(b) finally approving this settlement and its terms as being a fair, reasonable and adequate settlement of the Class’ claims under Rule 23 of the Federal Rules of Civil Procedure;

(c) directing that, as to CMS, the Action be dismissed with prejudice and without costs as against the Settling Plaintiffs;

(d) determining pursuant to Fed. R. Civ. P. 54(b) that there is no just reason for delay and directing that the judgment of dismissal shall be final and appealable;

(e) reserving continuing and exclusive jurisdiction over the settlement and this Settlement Agreement, including the administration and consummation of this settlement, and also including one or more applications for the award of fees and reimbursement of expenses to plaintiffs’ counsel.

(a) Subject to the provisions of Section 18, the parties hereto agree to recommend approval of this Settlement Agreement by the Court. They agree to undertake their best efforts, including all steps and efforts contemplated by this Settlement Agreement and any other steps and efforts that may reasonably be necessary or appropriate to obtain Court approval of this settlement and to carry out the terms of this Settlement Agreement.

(b) The parties agree that the Court’s authority includes, but is not limited to, monetary and/or injunctive relief and discretion to impose specific performance, sanctions or penalties including imposition of any sanction up to and including contempt of court, pursuant to 28 U.S.C. § 636(e). The parties agree that the terms of this Settlement Agreement satisfy the requirements for injunctive relief and specific performance.

(c) In the event that any party to this Settlement Agreement finds it necessary to bring an action or proceeding against another party to this Settlement Agreement as a result of a breach or default hereunder or to enforce the terms and conditions hereof, including but not limited to the confidentiality provisions set forth in Sections 15, the prevailing party in such action or proceedings shall be paid all its reasonable Attorneys’ Fees and Costs and necessary disbursements incurred in connection with such action, including but not limited to copying costs, filing fees, expert costs and fees and word processing fees.

Unless terminated earlier as provided in Section 18, this Settlement Agreement shall become final upon the occurrence of all of the following three events:

(a) approval in all respects by the Court as required by Rule 23(e) of the Federal Rules of Civil Procedure;

(c) expiration of the time for appeal or the time to seek permission to appeal from the Court’s entry of the Final Judgment or, if appealed, either (i) the Final Judgment has been affirmed in its entirety by the court of last resort to which such appeal has been taken and such affirmance has become no longer subject to further appeal or review, or (ii) withdrawal or dismissal with prejudice of all such appeals.

(a) Lead Counsel shall propose a plan of distribution in compliance with Rule 23 of the Federal Rules of Civil Procedure to the Court either before or after final settlement approval. The Settlement Fund shall be distributed as ordered by the Court. The approval, disapproval, or modification of any proposed plan of distribution shall not affect the approval or enforceability of this Settlement Agreement.

(b) In no event shall CMS have any liability or responsibility with respect to the plan of distribution or the distribution and administration of the Settlement Fund, including, but not limited to, the costs and expenses of such distribution and administration.

Lead Counsel, or their authorized agents, acting on behalf of the Class, and subject to Court oversight and direction and in compliance with Treasury Regulation § 1.468B-2, shall administer the Settlement Fund under such terms and conditions as may be approved by the Court. Subject to Court order, the Settlement Fund may be used:

(a) To pay expenses in connection with the continued prosecution of claims in the Action;

(b) To pay all the costs and expenses reasonably and actually incurred in connection with providing notice, locating Members of the Class, administering and distributing the Settlement Fund to Members of the Class who make timely claims, processing proof of claim and release forms and paying escrow fees and costs, if any;

(d) To pay Class Counsel’s attorney fees, expenses and costs with interest thereon (the “Fee and Expense Award”); and

(e) To distribute the balance of the Settlement Fund (the “Net Settlement Fund”) to Members of the Class as directed by the Court.

The parties to this Settlement Agreement acknowledge that the time, expense and burden of discovery is a factor in CMS’s decision to compromise Settling Plaintiffs’ disputed claims. Settling Plaintiffs hereby agree that, except for the cooperation requirements of Section 4 hereto, they cease from any and all discovery of, and will not seek further discovery from CMS, from its current or former employees (with respect to their actions and/or capacities as employees of CMS), or from any third party with respect to CMS or its current or former employees (with respect to their actions and/or capacities as employees of CMS). Settling Plaintiffs hereby acknowledge and confirm that the discovery limitations in this Section 14 shall have no effect on CMS’s obligations under the Federal Rules of Civil Procedure and the Federal Rules of Evidence to respond to trial subpoenas. Notwithstanding this provision, CMS reserves all rights to challenge any trial subpoena on any grounds whatsoever.

(a) All discovery materials provided by CMS or any Released Party hereunder either before or after the date of this Settlement Agreement, including any materials or information provided pursuant to Section 4, shall be governed by all confidentiality and/or protective orders in force as of the date of this Settlement Agreement and by such additional confidentiality and/or protective orders as may be in effect on the date the discovery takes place.

(b) Within 60 days after the final termination of the Action as to all Defendants, plaintiffs agree to return to CMS all materials (and all copies of materials, kept in any format) designated as confidential or restricted confidential and produced to plaintiffs by CMS, including all materials produced pursuant to Section 4, or, in the alternative, to destroy all such confidential materials (and all copies of materials, kept in any format) and provide CMS with written confirmation that all such confidential materials and all copies thereof have been destroyed.

(c) The contents of this Settlement Agreement may not be admitted into evidence in this Action, or in any other action or proceeding, except as may be required to approve or enforce this Settlement Agreement or to defend or enjoin such other litigation or proceeding.

The Settlement Amount will not be reduced by any other recoveries obtained from other responsible parties by Representative Plaintiffs and this Settlement Agreement shall not limit Representative Plaintiffs’ right to pursue claims against other allegedly responsible parties that are not among the Released Parties. CMS will not seek contribution or indemnification from any Other Defendant named in this Action unless an Other Defendant sues CMS for amounts sought to be recovered by plaintiffs in the Action.

(a) The Representative Plaintiffs and Class Counsel shall look solely to the Settlement Fund for the payment of fees, costs, and incentive awards, and except for any such payment(s), there shall be no assessment of fees and costs against any party. Under no circumstances shall CMS be liable for any fees, costs, notice costs, taxes, or other expenses or payments of any kind beyond the payment to the Settlement Fund specified in Section 3.

(b) Class Counsel intend to apply for an award of attorneys’ fees from the Settlement Fund and nothing in this Settlement Agreement shall prohibit such attorneys’ fees and expenses as are awarded by the Court from the Settlement Fund from being paid to Class Counsel on such terms as the Court authorizes.

(c) Lead Counsel will apply to the Court for an award from the Settlement Fund of attorneys’ fees and reimbursement of litigation expenses (the “Fee and Expense Award” described in paragraph 13(d)). The Fee and Expense Award, when approved by the Court, shall be immediately payable from the Settlement Fund to Lead Counsel. However, if the Settlement Agreement is terminated, if the Court does not approve the Settlement Agreement, or if the Effective Date does not occur for any reason, then within five (5) business days after receiving notice from counsel for CMS or from a court with appropriate jurisdiction, Lead Counsel shall refund to the Settlement Fund all amounts previously withdrawn or distributed pursuant to paragraph 13, including any Fee and Expense Award, plus interest thereon at the same rate at which interest is accruing for the Settlement Fund. Each Lead Counsel, on behalf of itself and each partner and/or shareholder of it, agrees that, in the event that such a refund is required, the Lead Counsel law firms and their partners and/or shareholders are each jointly and severally liable to refund any amount withdrawn from the Settlement Fund pursuant to paragraph 13 with interest as described above, provided that with respect to the Fee and Expense Award each Lead Counsel law firm and its partners and/or shareholders are jointly and severally liable for refunding only the amount of the Fee and Expense Award they received along with interest as described above and shall not be responsible for any Fee and Expense Award received by any other Lead Counsel. Lead Counsel are subject to the jurisdiction of the Court for the purpose of enforcing the provisions of this paragraph.

CMS shall have the right, but not the obligation, in its sole discretion, to terminate this Settlement Agreement within twenty-one (21) business days of notice by either party to the other of any of the following events:

(a) the Court denies, in whole or in part, plaintiffs’ motion for preliminary approval of the Settlement Agreement and the Supplemental Agreement or certification of a settlement class pursuant to Section 6, or plaintiffs’ motion for final approval pursuant to Section 9; or

(b) the Court declines to enter the Final Judgment in substantially the form attached as Exhibit B; or

(d) the requests for exclusion exceeds the threshold contained in the Supplemental Agreement.

In the event that this Settlement Agreement is terminated pursuant to sub-Sections (a), (b), (c), or (d) above, then: (i) the Settlement Amount shall be returned to CMS together with the interest earned thereon, less any portion of such interest properly reserved for the payment of Taxes or Tax Expenses; (ii) this Settlement Agreement shall be null and void and of no further effect, and neither party shall be bound by any of its terms, except that Sections 15 and 19 shall survive; and (iii) any and all releases shall be of no further force and effect.

This Settlement Agreement is not and shall not be deemed or construed to be an admission, adjudication or evidence of any violation of any statute or law or of any liability or wrongdoing by CMS or any Released Party or of the truth of any of the claims or allegations alleged in the Action. In the event that the settlement does not become final or is terminated in accordance with the terms hereof, then this Settlement Agreement, and the release set forth herein, shall be of no force or effect (except for Sections 15 and 19) and the terms of this Settlement Agreement shall not be offered or received in evidence in any proceeding. The parties hereto agree that this Settlement Agreement, including its exhibits, whether or not it shall become final, and any and all negotiations, documents and discussions associated with it, shall be without prejudice to the rights of any party, shall not be deemed or construed to be an admission or evidence of any violation of any statute or law or of any liability or wrongdoing by CMS, or of the truth of any of the claims or allegations, or of any damage or injury. Evidence of this Settlement Agreement or the negotiation of this Settlement Agreement shall not be discoverable or used directly or indirectly, in any way, whether in the Action or in any other action or proceeding of any nature, except in connection with a dispute under this Settlement Agreement or an action in which this Settlement Agreement is asserted as a defense. CMS and Representative Plaintiffs expressly reserve all of their rights if the settlement does not become final in accordance with the terms of this Settlement Agreement.

(a) This Settlement Agreement shall be binding upon, and inure to the benefit of, the successors and assigns of CMS, the Released Parties, the Representative Plaintiffs and the Settling Plaintiffs.

(b) The waiver by one party of any breach of this Settlement Agreement by another party shall not be deemed a waiver of any other prior or subsequent breach of this Settlement Agreement.

This Settlement Agreement, including the Supplemental Agreement, contains an entire, complete, and integrated statement of each and every term and provision agreed to by and among the parties and is not subject to any condition not provided for herein. This Settlement Agreement, including the Supplemental Agreement, supercedes all prior or contemporaneous discussions, agreements, and understandings among the parties to this Settlement Agreement with respect hereto. This Settlement Agreement shall not be modified in any respect except by a writing that is executed by all the parties hereto, or as provided in Section 5(a).

Nothing in this Settlement Agreement may be interpreted as creating any obligation for CMS to retain any records or documents, in any form.

The headings used in this Settlement Agreement are for the convenience of the parties only and shall not have substantive effect.

None of the parties hereto shall be considered to be the drafter of this Settlement Agreement or any provision hereof for the purpose of any statute, case law or rule of interpretation or construction that might cause any provision to be construed against the drafter hereof.

All terms of this Settlement Agreement and the exhibits hereto shall be governed by and interpreted according to the substantive laws of the State of New York without regard to its choice of law or conflict of laws principles.

This Settlement Agreement may be executed in counterparts. Facsimile signatures shall be considered as valid signatures as of the date hereof although the original signature pages shall thereafter be appended to this Settlement Agreement.

CMS and each Settling Plaintiff hereby irrevocably submit, to the fullest extent permitted by law, to the exclusive jurisdiction of the United States District Court for the Southern District of New York for any suit, action, proceeding or dispute arising out of or relating to this Settlement Agreement, or to the applicability of this Settlement Agreement, and exhibits hereto. Solely for purposes of such suit, action or proceeding, to the fullest extent permitted by law, the parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim or objection that they are not subject to the jurisdiction of such Court, or that such Court is, in any way, an improper venue or an inconvenient forum or that the Court lacked power to approve this Settlement Agreement or enter any of the orders contemplated hereby.

All notices under this Settlement Agreement shall be sent as follows: (i) if to plaintiffs, then to Bernard Persky, Labaton Sucharow & Rudoff LLP, 100 Park Avenue, New York, NY 10017, and (ii) if to CMS, then to CMS’s undersigned counsel and to Julio Mazzoli, Esq., c/o CMS, One Energy Plaza, EP11-401, Jackson, MI 49201, or such other address as a party to this Settlement Agreement may designate in writing, from time to time, in accordance with this Settlement Agreement.

In executing this Settlement Agreement, Lead Counsel represent and warrant that they have been fully empowered to execute this Settlement Agreement on behalf of the Class (subject to final approval by the Court after notice to all Class Members), and that all actions necessary for the execution of this Settlement Agreement have been taken. CMS represents and warrants that the undersigned has been fully empowered to execute the Settlement Agreement on behalf of CMS, and that all actions necessary for the execution of this Settlement Agreement have been taken.

Daniel A. Mullen, Esq.
Danielle A. Schweiloch, Esq.
McDERMOTT WILL & EMERY LLP
340 Madison Avenue
New York, New York 10017

Attorneys for CMS Field Services (now known as Cantera Gas Company LLC) and CMS Marketing Services & Trading Company (now known as CMS Energy Resource Management Company)


Michigan	001-09513	38-2726431
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)

One Energy Plaza, Jackson, Michigan		49201
_________________________________ (Address of principal executive offices)		___________ (Zip Code)


Michigan	001-05611	38-0442310
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)

One Energy Plaza, Jackson, Michigan		49201
_________________________________ (Address of principal executive offices)		___________ (Zip Code)


	CMS Energy Corporation

March 1, 2006	By:	Thomas J. Webb

		Name: Thomas J. Webb
		Title: Executive Vice President and Chief Financial Officer


	Consumers Energy Company

March 1, 2006	By:	Thomas J. Webb

		Name: Thomas J. Webb
		Title: Executive Vice President and Chief Financial Officer


Exhibit No.		Description

99.1		Form of Class Action Settlement Agreement
99.2		Stipulation and Agreement of Settlement dated February 28, 2006


Date of Report (Date of Earliest Event Reported):		February 28, 2006


Registrant’s telephone number, including area code:		517-788-0550


In re CMS ENERGY ERISA LITIGATION This Document Relates To: ALL ACTIONS	) ) ) ) ) ) )	Master File No. 02-72834 Honorable George Caram Steeh Class Action


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IN RE: NATURAL GAS COMMODITY LITIGATION	: : x	Master File No. 03 CV 6186 (VM)

THIS DOCUMENT RELATES TO: ALL ACTIONS	: :	Hon. Victor Marrero, USDJ
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