Exhibit 10(ww)
RECEIVABLES PURCHASE AGREEMENT
dated as of May 22, 2003
Among
CONSUMERS RECEIVABLES FUNDING II, LLC, as Seller,
CONSUMERS ENERGY COMPANY, as Servicer,
FALCON ASSET SECURITIZATION CORPORATION,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO,
as Financial Institutions,
and
BANK ONE, NA (MAIN OFFICE CHICAGO)
as Administrative Agent

 

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CONSUMERS RECEIVABLES FUNDING II, LLC
RECEIVABLES PURCHASE AGREEMENT
          This Receivables Purchase Agreement dated as of May 22, 2003 is among
Consumers Receivables Funding II, LLC, a Delaware limited liability company
(“Seller”), Consumers Energy Company, a Michigan corporation (“Consumers”), as
initial Servicer (the Servicer together with Seller, the “Seller Parties” and
each a “Seller Party”), the entities listed on Schedule A to this Agreement
(together with any of their respective successors and assigns hereunder, the
“Financial Institutions”), Falcon Asset Securitization Corporation (“Conduit”)
and Bank One, NA (Main Office Chicago), as agent for the Purchasers hereunder or
any successor agent hereunder (together with its successors and assigns
hereunder, the “Administrative Agent”). Unless defined elsewhere herein,
capitalized terms used in this Agreement shall have the meanings assigned to
such terms in Exhibit I.
PRELIMINARY STATEMENTS
          Seller desires to transfer and assign Purchaser Interests to the
Purchasers from time to time.
          Conduit may, in its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to time.
          In the event that Conduit declines to make any purchase, the Financial
Institutions shall, at the request of Seller, purchase Purchaser Interests from
time to time. In addition, the Financial Institutions have agreed to provide a
liquidity facility to Conduit in accordance with the terms of the Liquidity
Agreement entered into by Conduit with such Financial Institutions.
          Bank One, NA (Main Office Chicago) has been requested and is willing
to act as Administrative Agent on behalf of Conduit and the Financial
Institutions in accordance with the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
          Section 1.1 Purchase Facility.
          (a) Upon the terms and subject to the conditions hereof, Seller hereby
sells and assigns Purchaser Interests to the Administrative Agent for the
benefit of one or more of the Purchasers. In accordance with the terms and
conditions set forth herein, Conduit may, at its option, instruct the
Administrative Agent to purchase on its behalf, or if Conduit shall decline to
purchase, the Administrative Agent shall purchase, on behalf of the Financial
Institutions, Purchaser Interests from time to time in an aggregate amount not
to exceed at such time the

 

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lesser of (i) the Purchase Limit and (ii) the aggregate amount of the
Commitments during the period from the date hereof to but not including the
Amortization Date.
          (b) Seller may, upon at least 15 Business Days’ notice to the
Administrative Agent, terminate in whole or reduce in part, ratably among the
Financial Institutions, the unused portion of the Purchase Limit; provided that
each partial reduction of the Purchase Limit shall be in an amount equal to
$5,000,000 or an integral multiple thereof.
          Section 1.2 Increases.
          Seller shall provide the Administrative Agent with at least two
Business Days’ prior notice in the form set forth as Exhibit II hereto of each
Incremental Purchase (a “Purchase Notice”). Each Purchase Notice shall be
subject to Section 6.2 hereof and, except as set forth below, shall be
irrevocable and shall specify the requested Purchase Price (which shall not be
less than $1,000,000), date of purchase and, in the case of an Incremental
Purchase to be funded by the Financial Institutions, the requested Bank Rate and
Tranche Period. Following receipt of a Purchase Notice, the Administrative Agent
will determine whether Conduit agrees to make the purchase. If Conduit declines
to make a proposed purchase, Seller may cancel the Purchase Notice or, in the
absence of such a cancellation, the Incremental Purchase of the Purchaser
Interest will be made by the Financial Institutions. On the date of each
Incremental Purchase, upon satisfaction of the applicable conditions precedent
set forth in Article VI, Conduit or the Financial Institutions, as applicable,
shall deposit to the account of the Seller (or its designee) designated in the
Purchase Notice, in immediately available funds, no later than 1:00 p.m. (New
York time), an amount equal to (i) in the case of Conduit, the aggregate
Purchase Price of the Purchaser Interests then being purchased by Conduit or
(ii) in the case of a Financial Institution, such Financial Institution’s Pro
Rata Share of the aggregate Purchase Price of the Purchaser Interests then being
purchased by the Financial Institutions.
          Section 1.3 Decreases. Seller shall provide the Administrative Agent
with prior written notice in conformity with the Required Notice Period in
substantially the form set forth on Exhibit X hereto (each, a “Reduction
Notice”) of any proposed reduction of Aggregate Capital from Collections. Such
Reduction Notice shall designate (i) the date (the “Proposed Reduction Date”)
upon which any such reduction of Aggregate Capital shall occur (which date shall
give effect to the applicable Required Notice Period), and (ii) the amount of
Aggregate Capital to be reduced which shall be applied ratably to the Purchaser
Interests of Conduit and the Financial Institutions in accordance with the
amount of Capital (if any) owing to Conduit, on the one hand, and the amount of
Capital (if any) owing to the Financial Institutions (ratably, based on their
respective Pro Rata Shares), on the other hand (the “Aggregate Reduction”). Only
one (1) Reduction Notice shall be outstanding at any time.
          Section 1.4 Payment Requirements. All amounts to be paid or deposited
by any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 12:00 noon (New York
time) on the day when due in immediately available funds, and if not received
before 12:00 noon (New York time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Administrative Agent, for the account of such Purchaser, at 1

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Bank One Plaza, Chicago, Illinois 60670 until otherwise notified by the
Administrative Agent. All computations of Yield (other than Yield calculated
using the Prime Rate), per annum fees hereunder and per annum fees under the Fee
Letter shall be made on the basis of a year of 360 days for the actual number of
days elapsed. All computations of Yield calculated using the Prime Rate shall be
made on the basis of a year of 365 or 366 days, as applicable, for the actual
number of days elapsed. If any amount hereunder shall be payable on a day which
is not a Business Day, such amount shall be payable on the next succeeding
Business Day.
ARTICLE II
PAYMENTS AND COLLECTIONS
          Section 2.1 Payments. Notwithstanding any limitation on recourse
contained in this Agreement, Seller shall immediately pay to the Administrative
Agent when due, for the account of the relevant Purchaser or Purchasers on a
full recourse basis, (i) such fees as set forth in the Fee Letter (which fees
shall be sufficient to pay all fees owing to the Financial Institutions),
(ii) all amounts payable as Yield, (iii) all amounts payable as Deemed
Collections (which shall be immediately due and payable by Seller and applied to
reduce outstanding Aggregate Capital hereunder in accordance with Sections 2.2
and 2.4 hereof), (iv) all amounts payable pursuant to Section 2.7, (v) all
amounts payable pursuant to Article X, if any, (vi) all Servicer costs and
expenses, including the Servicing Fee, in connection with servicing,
administering and collecting the Receivables, (vii) all Broken Funding Costs and
(viii) all Default Fees (collectively, the “Obligations”). If Seller fails to
pay any of the Obligations when due, or if Servicer fails to make any deposit
required to be made by it under this Agreement when due, such Person agrees to
pay, on demand, the Default Fee in respect thereof until paid. Notwithstanding
the foregoing, no provision of this Agreement or the Fee Letter shall require
the payment or permit the collection of any amounts hereunder in excess of the
maximum permitted by applicable law. If at any time Seller receives any
Collections or is deemed to receive any Collections, Seller shall immediately
pay such Collections or Deemed Collections to the Servicer for application in
accordance with the terms and conditions hereof and, at all times prior to such
payment, such Collections or Deemed Collections shall be held in trust by Seller
for the exclusive benefit of the Purchasers and the Administrative Agent.
          Section 2.2 Collections Prior to Amortization.
          (a) Subject to the following paragraph (b), prior to the Amortization
Date, any Collections and/or Deemed Collections received by the Servicer shall
be set aside and held in trust by the Servicer for the payment of any accrued
and unpaid Aggregate Unpaids or for a Reinvestment as provided in this
Section 2.2.
          (b) At any time any Collections or Deemed Collections are received by
the Servicer prior to the Amortization Date:
     (i) the Servicer shall set aside the Termination Percentage of Collections
and Deemed Collections evidenced by the Purchaser Interests of each Terminating
Financial Institution, and

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     (ii) Seller hereby requests and the Purchasers (other than any Terminating
Financial Institutions) hereby agree to make (subject to the conditions
precedent set forth in Section 6.2 and the requirements of Section 2.7),
simultaneously with such receipt, a reinvestment (each a “Reinvestment”) with
that portion of the balance of each and every Collection received or Deemed
Collection deemed received by the Servicer that is part of any Purchaser
Interest, such that after giving effect to such Reinvestment, the amount of
Aggregate Capital immediately after such receipt and corresponding Reinvestment
shall be equal to the amount of Aggregate Capital immediately prior to such
receipt.
          (c) On each Settlement Date prior to the occurrence of the
Amortization Date, the Servicer shall remit to the Administrative Agent’s
account the amounts set aside during the preceding Settlement Period that have
not been subject to a Reinvestment and apply such amounts (if not previously
paid in accordance with Section 2.1):
     first, to the payment of the Servicer’s reasonable out-of-pocket costs and
expenses in connection with servicing, administering and collecting the
Receivables, including the Servicing Fee, if an Affiliate of the Seller is not
then acting as the Servicer,
     second, ratably to the payment of all accrued and unpaid Yield,
     third, ratably to the payment of all accrued and unpaid fees under the Fee
Letter,
          fourth, to reduce the Capital of all Purchaser Interests of
Terminating Financial Institutions to zero, applied ratably to each Terminating
Financial Institution according to its respective Termination Percentage,
          fifth, to reduce Capital of outstanding Purchaser Interests in an
amount, if any, necessary so that the aggregate of the Purchaser Interests does
not exceed the Applicable Maximum Purchaser Interest applied ratably in
accordance with the Capital Pro Rata Share of the Purchasers,
          sixth, for the ratable payment of all other unpaid Obligations,
provided that to the extent such Obligations relate to the payment of Servicer
costs and expenses, including the Servicing Fee, when Seller or one of its
Affiliates is acting as the Servicer, such costs and expenses will not be paid
until after the payment in full of all other Obligations,
          seventh, to fund any Aggregate Reduction on such Settlement Date
applied ratably in accordance with the Capital Pro Rata Share of the Purchasers,
and
          eighth, any balance remaining thereafter shall be remitted from the
Servicer to Seller on such Settlement Date.
          In the event that, pursuant to Section 1.3, an Aggregate Reduction is
to take place on a date other than a Settlement Date, on the date of such
Aggregate Reduction, the Servicer shall remit to the Administrative Agent’s
account, out of the amounts set aside pursuant to this Section 2.2, an amount
equal to such Aggregate Reduction to be applied in accordance with Section 1.3.

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          Section 2.3 Terminating Financial Institutions. Each Terminating
Financial Institution shall be allocated a ratable portion of Collections and
Deemed Collections from the date of its becoming a Terminating Financial
Institution (the “Termination Date”) until such Terminating Financial
Institution’s Capital shall be paid in full. This ratable portion shall be
calculated on the Termination Date of each Terminating Financial Institution as
a percentage equal to (i) Capital of such Terminating Financial Institution
outstanding on its Termination Date, divided by (ii) the Aggregate Capital
outstanding on such Termination Date (the “Termination Percentage”). Each
Terminating Financial Institution’s Termination Percentage shall remain constant
prior to the Amortization Date. On and after the Amortization Date, each
Termination Percentage shall be disregarded, and each Terminating Financial
Institution’s Capital shall be reduced ratably with all Purchasers in accordance
with Section 2.4.
          Section 2.4 Collections Following Amortization. On the Amortization
Date and on each day thereafter, the Servicer shall set aside and hold in trust,
for the holder of each Purchaser Interest, all Collections and Deemed
Collections received on such day and an additional amount of funds of the Seller
for the payment of any accrued and unpaid Obligations owed by Seller and not
previously paid by Seller in accordance with Section 2.1. On and after the
Amortization Date, the Servicer shall (i) remit to the Administrative Agent’s
account the amounts set aside pursuant to the preceding sentence, and (ii) apply
such amounts to reduce the Aggregate Capital and any other Aggregate Unpaids.
          Section 2.5 Application of Collections. If there shall be insufficient
funds on deposit for the Servicer to distribute funds in payment in full of the
aforementioned amounts pursuant to Section 2.4, the Servicer shall distribute
funds:
     first, to the payment of the Servicer’s reasonable out-of-pocket costs and
expenses in connection with servicing, administering and collecting the
Receivables, including the Servicing Fee, if an Affiliate of the Seller is not
then acting as the Servicer,
     second, to the reimbursement of the Administrative Agent’s costs of
collection and enforcement of this Agreement,
          third, ratably to the payment of all accrued and unpaid fees under the
Fee Letter and Yield,
     fourth, (to the extent applicable) to the ratable reduction of the
Aggregate Capital (without regard to any Termination Percentage),
     fifth, for the ratable payment of all other unpaid Obligations, provided
that to the extent such Obligations relate to the payment of Servicer costs and
expenses, including the Servicing Fee, when Seller or one of its Affiliates is
acting as the Servicer, such costs and expenses will not be paid until after the
payment in full of all other Obligations, and
     sixth, after the Aggregate Unpaids have been indefeasibly reduced to zero,
to Seller.

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          Collections applied to the payment of Aggregate Unpaids shall be
distributed in accordance with the aforementioned provisions, and, giving effect
to each of the priorities set forth above in this Section 2.5, shall be shared
ratably (within each priority) among the Administrative Agent and the Purchasers
in accordance with the amount of such Aggregate Unpaids owing to each of them in
respect of each such priority.
          Section 2.6 Payment Rescission. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Administrative Agent (for application to the Person or Persons who
suffered such rescission, return or refund) the full amount thereof, plus the
Default Fee from the date of any such rescission, return or refunding.
          Section 2.7 Maximum Purchaser Interests. Seller shall ensure that the
Purchaser Interests of the Purchasers shall at no time exceed in the aggregate
the Applicable Maximum Purchaser Interest. If the aggregate of the Purchaser
Interests of the Purchasers exceeds the Applicable Maximum Purchaser Interest,
Seller shall pay to the Administrative Agent, within (i) at any time a Level One
Enhancement Period is in effect, two (2) Business Days, and (ii) at any time a
Level Two or Level Three Enhancement Period is in effect, one (1) Business Day,
an amount such that, after giving effect to such payment, the aggregate of the
Purchaser Interests equals or is less than the Applicable Maximum Purchaser
Interest. Amounts paid by the Seller under this Section 2.7 shall be applied to
the outstanding Capital of the Purchasers ratably in accordance with such
Purchasers’ respective Capital Pro Rata Shares.
          Section 2.8 Clean Up Call. In addition to Seller’s rights pursuant to
Section 1.3, Seller shall have the right (after providing written notice to the
Administrative Agent in accordance with the Required Notice Period), at any time
following the reduction of the Aggregate Capital to a level that is less than
10.0% of the original Purchase Limit, to repurchase from the Purchasers all, but
not less than all, of the then outstanding Purchaser Interests. The purchase
price in respect thereof shall be an amount equal to the Aggregate Unpaids
through the date of such repurchase, payable in immediately available funds.
Such repurchase shall be without representation, warranty or recourse of any
kind by, on the part of, or against any Purchaser or the Administrative Agent.
          Section 2.9 Payment Allocations. The Servicer shall, upon receipt of
payments of amounts billed and collected from Obligors on their utility bills,
allocate those receipts on a daily basis between Collections of Receivables and
Securitization Charge Collections in accordance with the allocation methodology
specified in Annex 2 to the Servicing Agreement. The Servicer will apply the
Collections from Receivables as provided in this Article II.

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ARTICLE III
COMPANY FUNDING
          Section 3.1 Yield. Seller shall pay Yield with respect to the Capital
associated with each Purchaser Interest of Conduit for each day that any Capital
in respect of such Purchaser Interest is outstanding; provided, that any
Purchaser Interest, or portion thereof, which, or an undivided interest in
which, is being funded by the Financial Institutions pursuant to the Liquidity
Agreement will accrue Yield pursuant to Article IV. Each Purchaser Interest
funded substantially with Pooled Commercial Paper will accrue Yield at the CP
Rate for each day.
          Section 3.2 Payments. On each Yield Payment Date, Seller shall pay to
the Administrative Agent (for the benefit of Conduit) an aggregate amount equal
to all accrued and unpaid Yield in respect of the Capital associated with all
Purchaser Interests of Conduit for the immediately preceding Accrual Period in
accordance with Article II.
          Section 3.3 Calculation of Yield. On the third (3rd) Business Day
immediately preceding each Yield Payment Date, Conduit shall calculate the
aggregate amount of Yield in respect of the Capital associated with all
Purchaser Interests of Conduit for the immediately preceding Accrual Period and
shall notify Seller of such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
          Section 4.1 Financial Institution Funding. Each Purchaser Interest of
the Financial Institutions shall accrue Yield for each day during its Tranche
Period at either the LIBO Rate or the Prime Rate in accordance with the terms
and conditions hereof. Until Seller gives notice to the Agent of another Bank
Rate in accordance with Section 4.4, the initial Bank Rate for any Purchaser
Interest transferred to the Financial Institutions pursuant to the terms and
conditions hereof shall be the Prime Rate. If the Financial Institutions acquire
by assignment from Conduit all or any portion of a Purchaser Interest (or an
undivided interest therein) pursuant to the Liquidity Agreement, each Purchaser
Interest so assigned shall each be deemed to have a new Tranche Period
commencing on the date of any such assignment.
          Section 4.2 Yield Payments. On each Yield Payment Date for each
Purchaser Interest of the Financial Institutions, Seller shall pay to the
Administrative Agent (for the benefit of the Financial Institutions) an
aggregate amount equal to the accrued and unpaid Yield for the entire Tranche
Period of such Purchaser Interest in accordance with Article II.
          Section 4.3 Selection and Continuation of Tranche Periods.
          (a) With consultation from and adequate prior notice to the
Administrative Agent, Seller shall from time to time request Tranche Periods for
the Purchaser Interests of the Financial Institutions, provided that, (i) if at
any time the Financial Institutions shall have a Purchaser Interest, Seller
shall always request Tranche Periods such that at least one Tranche Period shall
end on the date specified in clause (A) of the definition of Yield Payment Date
and (ii) no more than three (3) Tranche Periods shall be outstanding at any
time.

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          (b) Seller upon notice to and consultation with the Administrative
Agent received at least three (3) Business Days prior to the last day of a
Tranche Period (the “Terminating Tranche”) for any Purchaser Interest, may,
effective on such last day of the Terminating Tranche: (i) divide any such
Purchaser Interest into multiple Purchaser Interests or (ii) combine any such
Purchaser Interest with one or more other Purchaser Interests which either have
a Terminating Tranche ending on such day or are newly created on such day
(subject to Conduit’s ability to accommodate such division or combination),
provided, that in no event may a Purchaser Interest of Conduit be combined with
a Purchaser Interest of the Financial Institutions.
          Section 4.4 Financial Institution Bank Rates. Seller may select the
LIBO Rate or the Prime Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by 12:00 noon (New York time): (i) at least three
(3) Business Days prior to the expiration of any Terminating Tranche with
respect to which the LIBO Rate is being requested as a new Bank Rate and (ii) at
least one (1) Business Day prior to the expiration of any Terminating Tranche
with respect to which the Prime Rate is being requested as a new Bank Rate, give
the Agent irrevocable notice of the new Bank Rate for the Purchaser Interest
associated with such Terminating Tranche. Until Seller gives notice to the Agent
of another Bank Rate, the initial Bank Rate for any Purchaser Interest
transferred to the Financial Institutions pursuant to the terms and conditions
hereof shall be the Prime Rate.
          Section 4.5 Suspension of the LIBO Rate. (a) If any Financial
Institution notifies the Administrative Agent that it has determined that
funding its Pro Rata Share of the Purchaser Interests of the Financial
Institutions at a LIBO Rate would violate any applicable law, rule, regulation,
or directive of any governmental or regulatory authority, whether or not having
the force of law, or that (i) deposits of a type and maturity appropriate to
fund its Purchaser Interests at such LIBO Rate are not available or (ii) such
LIBO Rate does not accurately reflect the cost of acquiring or maintaining a
Purchaser Interest at such LIBO Rate, then the Administrative Agent shall
suspend the availability of such LIBO Rate and select the Prime Rate for any
Purchaser Interest accruing Yield at such LIBO Rate, and the then current
Tranche Period for such Purchaser Interest shall thereupon be terminated and a
new Tranche Period based upon the Prime Rate shall commence.
          (b) If less than all of the Financial Institutions give a notice to
the Administrative Agent pursuant to Section 4.5(a), each Financial Institution
which gave such a notice shall be obligated, at the request of Seller, Conduit
or the Administrative Agent, to assign all of its rights and obligations
hereunder to (i) another Financial Institution or (ii) another funding entity
nominated by Seller or the Administrative Agent that is acceptable to Conduit
and willing to participate in this Agreement and the related Liquidity Agreement
through the Liquidity Termination Date in the place of such notifying Financial
Institution; provided that (i) the notifying Financial Institution receives
payment in full, pursuant to an Assignment Agreement, of an amount equal to such
notifying Financial Institution’s Capital Pro Rata Share of the Capital and
Yield owing to all of the Financial Institutions and all accrued but unpaid fees
and other costs and expenses payable in respect of its Capital Pro Rata Share of
the Purchaser Interests of the Financial Institutions, and (ii) the replacement
Financial Institution otherwise satisfies the requirements of Section 12.1(b).

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          Section 4.6 Liquidity Agreement Fundings. The parties hereto
acknowledge that Conduit may put all or any portion of its Purchaser Interests
to the Financial Institutions at any time pursuant to the Liquidity Agreement to
finance or refinance the necessary portion of its Purchaser Interests through a
funding under the Liquidity Agreement to the extent available. The fundings
under the Liquidity Agreement will accrue interest at the Bank Rate in
accordance with this Article IV. Regardless of whether a funding of Purchaser
Interests by the Financial Institutions constitutes the direct purchase of a
Purchaser Interest hereunder, an assignment under the Liquidity Agreement of a
Purchaser Interest originally funded by Conduit or the sale of one or more
participations under the Liquidity Agreement in a Purchaser Interest originally
funded by Conduit, each Financial Institution participating in a funding of a
Purchaser Interest shall have the rights and obligations of a “Purchaser”
hereunder with the same force and effect as if it had directly purchased such
Purchaser Interest from Seller hereunder.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
          Section 5.1 Representations and Warranties of The Seller Parties. Each
Seller Party hereby represents and warrants to the Administrative Agent and the
Purchasers, as to itself, as of the date hereof and as of the date of each
Incremental Purchase and the date of each Reinvestment that:
          (a) Corporate Existence and Power. Such Seller Party is duly formed,
validly existing and in good standing under the laws of its state of formation.
Seller is duly qualified to do business and is in good standing, and has and
holds all power and all governmental licenses, authorizations, consents and
approvals required to carry on its business in each jurisdiction in which its
business is conducted, except where the failure to so qualify or so hold could
not reasonably be expected to have a Material Adverse Effect.
          (b) Power and Authority; Due Authorization, Execution and Delivery.
The execution and delivery by such Seller Party of this Agreement and each other
Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder and, in the case of Seller, Seller’s use of
the proceeds of purchases made hereunder, are within its powers and authority
and have been duly authorized by all necessary action on its part.
          (c) No Conflict. The execution and delivery by such Seller Party of
this Agreement and each other Transaction Document to which it is a party, and
the performance of its obligations hereunder and thereunder do not contravene or
violate (i) (A) its certificate or articles of incorporation or by-laws or
(B) limited liability company agreement or certificate of formation, as
applicable, (ii) any law, rule or regulation applicable to it, including,
without limitation, the Public Utility Holding Company Act of 1935, as amended,
(iii) any restrictions under any material agreement, contract or instrument to
which it is a party or by which it or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on assets of such Seller Party or its Subsidiaries (except as created
hereunder); and no transaction contemplated hereby requires compliance with any
bulk sales act or similar law.

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          (d) Governmental Authorization. Other than (i) the filing of the
financing statements required hereunder or (ii) such authorizations, approvals,
notices, filings or other actions as have been obtained, made or taken prior to
the date hereof, no authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required for
the due execution and delivery by such Seller Party of this Agreement and each
other Transaction Document to which it is a party and the performance of its
obligations hereunder and thereunder.
          (e) Actions, Suits. Except (i) to the extent described in Consumers’
Annual Report on Form 10-K for the year ended December 31, 2002, as filed with
the SEC, and (ii) such other similar actions, suits and proceedings predicated
on the occurrence of the same events giving rise to any actions, suits and
proceedings described in the Annual Reports referred to in the foregoing clause
(i), there are no actions, suits or proceedings pending, or to the best of such
Seller Party’s knowledge, threatened, against or affecting such Seller Party, or
any of its properties, in or before any court, arbitrator or other body, that
(i) relate to the transactions under this Agreement or (ii) could reasonably be
expected to have a Material Adverse Effect. Such Seller Party is not in default
with respect to any order of any court, arbitrator or governmental body.
          (f) Binding Effect. This Agreement and each other Transaction Document
to which such Seller Party is a party constitute the legal, valid and binding
obligations of such Seller Party enforceable against such Seller Party in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
          (g) Accuracy of Information. All information heretofore furnished by
such Seller Party or any of its Affiliates to the Administrative Agent or the
Purchasers for purposes of or in connection with this Agreement, any Monthly
Report, any of the other Transaction Documents or any transaction contemplated
hereby or thereby is, and all such information hereafter furnished by such
Seller Party or any of its Affiliates to the Administrative Agent or the
Purchasers will be, true and accurate in every material respect on the date such
information is stated or certified and does not and will not contain any
material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained therein not materially misleading.
          (h) Use of Proceeds. No proceeds of any purchase hereunder will be
used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
          (i) Good Title. Immediately prior to each purchase hereunder, Seller
shall be the legal and beneficial owner of the Receivables and Related Security
with respect thereto, free and clear of any Adverse Claim, except as created by
the Transaction Documents. There have been duly filed all financing statements
or other similar instruments or documents necessary

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under the UCC (or any comparable law) of all appropriate jurisdictions to
perfect Seller’s ownership interest in each Receivable, its Collections and the
Related Security.
          (j) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to, and shall, upon each
purchase hereunder, transfer to the Administrative Agent for the benefit of the
relevant Purchaser or Purchasers (and the Administrative Agent for the benefit
of such Purchaser or Purchasers shall acquire from Seller) a valid and perfected
first priority undivided percentage ownership or security interest in each
Receivable existing or hereafter arising and in the Related Security and
Collections with respect thereto, free and clear of any Adverse Claim, except as
created by the Transactions Documents. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC (or
any comparable law) of all appropriate jurisdictions to perfect the
Administrative Agent’s (on behalf of the Purchasers) ownership or security
interest in the Receivables, the Related Security and the Collections.
          (k) Places of Business and Locations of Records. The principal places
of business and chief executive office of such Seller Party and the offices
where it keeps all of its Records are located at the address(es) listed on
Exhibit III or such other locations of which the Administrative Agent has been
notified in accordance with Section 7.2(a) in jurisdictions where all action
required by Section 7.2(a) has been taken and completed. Seller is a limited
liability company organized solely in the State of Delaware. Seller’s Delaware
organizational identification number and Federal Employer Identification Number
are correctly set forth on Exhibit III.
          (l) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and duly
performed. The names and addresses of all Collection Banks, together with the
account numbers of the Collection Accounts of Seller at each Collection Bank and
the special zip code number of each Lock-Box, are listed on Exhibit IV. Seller
has not granted any Person, other than the Administrative Agent as contemplated
by this Agreement and the Intercreditor Agreement, dominion and control of any
Lock-Box or Collection Account, or the right to take dominion and control of any
such Lock-Box or Collection Account at a future time or upon the occurrence of a
future event.
          (m) Material Adverse Effect. (i) The initial Servicer represents and
warrants that since December 31, 2002, no event has occurred that would have a
material adverse effect on the financial condition or operations of the initial
Servicer and its Subsidiaries, taken as a whole, or the ability of the initial
Servicer to perform its obligations under this Agreement, and (ii) Seller
represents and warrants that since the date of this Agreement, no event has
occurred that would have a material adverse effect on (A) the financial
condition or operations of Seller, (B) the ability of Seller to perform its
obligations under the Transaction Documents, or (C) the collectibility of the
Receivables generally or any material portion of the Receivables.
          (n) Names. Seller has not used any names, trade names or assumed names
other than the name in which it has executed this Agreement.

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          (o) Ownership of Seller. Consumers owns, directly or indirectly, 100%
of the issued and outstanding membership interests of Seller, free and clear of
any Adverse Claim. There are no options, warrants or other rights to acquire
securities of Seller.
          (p) Public Utility Holding Company Act; Investment Company Act. Such
Seller Party is exempt from the registration requirements of the Public Utility
Holding Company Act of 1935, as amended, or any successor statute. Such Seller
Party is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended, or any successor statute.
          (q) Compliance with Law. Such Seller Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation.
          (r) Compliance with Credit and Collection Policy. Such Seller Party
has complied in all material respects with the Credit and Collection Policy with
regard to each Receivable and the related Contract, and has not made any change
to such Credit and Collection Policy, other than as permitted under Section 7.2
and in compliance with the notification requirements of Section 7.1(a)(vii).
          (s) Payments to Transferors. With respect to each Receivable
transferred to Seller under the Sale Agreements, Seller has given reasonably
equivalent value to the applicable Transferor in consideration therefor and such
transfer was not made for or on account of an antecedent debt. No transfer by
either Transferor of any Receivable under the applicable Sale Agreement is or
may be voidable under any section of the Bankruptcy Reform Act of 1978 (11
U.S.C. §§ 101 et seq.), as amended.
          (t) Enforceability of Contracts. Each Contract with respect to each
Receivable is effective to create, and has created, a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the
Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
          (u) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable on the date of its purchase under
the applicable Sale Agreement was an Eligible Receivable on such purchase date.

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          (v) Net Receivables Balance. Seller has determined that, immediately
after giving effect to each purchase hereunder, the Net Receivables Balance is
at least equal to the sum of (i) the Aggregate Capital, plus (ii) the Aggregate
Reserves.
          (w) Accounting. In the case of the Seller, the Seller is treating the
conveyance of the ownership interest in the Receivables and the Collections as a
sale for purposes of GAAP.
          Section 5.2 Financial Institution Representations and Warranties. Each
Financial Institution hereby represents and warrants to the Administrative Agent
and Conduit that:
          (a) Existence and Power. Such Financial Institution is a corporation
or a banking association duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, and has all
corporate power to perform its obligations hereunder.
          (b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder
are within its corporate powers, have been duly authorized by all necessary
corporate action, do not contravene or violate (i) its certificate or articles
of incorporation or association or by-laws, (ii) any law, rule or regulation
applicable to it, (iii) any restrictions under any agreement, contract or
instrument to which it is a party or any of its property is bound, or (iv) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and do not result in the creation or imposition of any Adverse
Claim on its assets. This Agreement has been duly authorized, executed and
delivered by such Financial Institution.
          (c) Governmental Authorization. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations hereunder.
          (d) Binding Effect. This Agreement constitutes the legal, valid and
binding obligation of such Financial Institution enforceable against such
Financial Institution in accordance with its terms, except as such enforcement
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors’ rights generally and by general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
          Section 6.1 Conditions Precedent to Initial Incremental Purchase. The
initial Incremental Purchase of a Purchaser Interest under this Agreement is
subject to the conditions precedent (a) that the Administrative Agent shall have
received on or before the date of such purchase: (i) the satisfactory report of
the Administrative Agent’s auditors; (ii) those documents listed on Schedule B;
(iii) a pro forma Monthly Report covering the immediately preceding

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Accrual Period and (iv) all fees and expenses required to be paid on such date
pursuant to the terms of this Agreement and the Fee Letter and (b) the Servicer
shall have complied (and have caused Transferors to comply) with the
requirements of Section 7.1(e).
          Section 6.2 Conditions Precedent to All Purchases and Reinvestments.
Each purchase of a Purchaser Interest (other than pursuant to Section 12.1) and
each Reinvestment shall be subject to the further conditions precedent that in
the case of each such purchase or Reinvestment: (a) the Servicer shall have
delivered to the Administrative Agent on or prior to the date of such purchase,
in form and substance satisfactory to the Administrative Agent, all Monthly
Reports as and when due under Section 8.5 and upon the Administrative Agent’s
request; (b) upon the Administrative Agent’s reasonable request, the Servicer
shall have delivered to the Administrative Agent at least three (3) days prior
to such purchase or Reinvestment an interim report, in a form agreed to by the
Servicer and the Administrative Agent, showing the amount of Eligible
Receivables; (c) the Amortization Date shall not have occurred; (d) the
Administrative Agent shall have received such other approvals, opinions or
documents as it may reasonably request if the Administrative Agent reasonably
believes there has been a change in law or circumstance that affects the status
or characteristics of the Receivables, Related Security or Collections, any
Seller Party or the Administrative Agent’s first priority perfected security
interest in the Receivables, Related Security and Collections and (e) on the
date of each such Incremental Purchase or Reinvestment, the following statements
shall be true (and acceptance of the proceeds of such Incremental Purchase or
Reinvestment shall be deemed a representation and warranty by Seller that such
statements are then true):
     (i) the representations and warranties set forth in Section 5.1 are true
and correct on and as of the date of such Incremental Purchase or Reinvestment
as though made on and as of such date;
     (ii) no event has occurred and is continuing, or would result from such
Incremental Purchase or Reinvestment, that will constitute an Amortization
Event, and no event has occurred and is continuing, or would result from such
Incremental Purchase or Reinvestment, that would constitute a Potential
Amortization Event; and
     (iii) the Aggregate Capital does not exceed the Purchase Limit and the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Administrative Agent or any Purchaser, occur automatically on
each day that the Servicer shall receive any Collections without the requirement
that any further action be taken on the part of any Person and notwithstanding
the failure of Seller to satisfy any of the foregoing conditions precedent in
respect of such Reinvestment. The failure of Seller to satisfy any of the
foregoing conditions precedent in respect of any Reinvestment shall give rise to
a right of the Administrative Agent, which right may be exercised at any time on
demand of the Administrative Agent, to rescind the related purchase and direct
Seller to pay to the Administrative Agent for the benefit of the Purchasers an
amount equal to the Collections prior to the Amortization Date that shall have
been applied to the affected Reinvestment.

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ARTICLE VII
COVENANTS
          Section 7.1 Affirmative Covenants of The Seller Parties. Until the
date on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:
          (a) Financial Reporting. Such Seller Party will maintain, for itself
and each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be furnished to
the Administrative Agent:
     (i) Annual Reporting. Within 120 days after the close of (A) each of
Consumer’s fiscal years, a copy of the Annual Report on Form 10-K (or any
successor form) for Consumers for such year, including therein the consolidated
balance sheet of Consumers and its consolidated Subsidiaries as at the end of
such year and the consolidated statements of income, cash flows and common
stockholder’s equity of Consumers and its consolidated Subsidiaries as at the
end of and for such year, or statements providing substantially similar
information, in each case certified by independent public accountants of
recognized national standing selected by Consumers (and not objected to by the
Administrative Agent), together with a certificate of such accounting firm
addressed to the Administrative Agent stating that, in the course of its
examination of the consolidated financial statements of Consumers and its
consolidated Subsidiaries, which examination was conducted by such accounting
firm in accordance with GAAP, (1) such accounting firm has obtained no knowledge
that an Amortization Event, insofar as such Amortization Event related to
accounting or financial matters, has occurred and is continuing, or if, in the
opinion of such accounting firm, such an Amortization Event has occurred and is
continuing, a statement as to the nature thereof, and (2) such accounting firm
has examined a certificate prepared by Consumers setting forth the computations
made by Consumers in determining, as of the end of such fiscal year, the ratios
specified in Section 9.1(k), which certificate shall be attached to the
certificate of such accounting firm, and such accounting firm confirms that such
computations accurately reflect such ratios, and (B) each of Seller’s fiscal
years, unaudited financial statements (which shall include balance sheets,
statements of income and retained earnings and a statement of cash flows) for
such fiscal year, all certified by a Responsible Officer of the Seller as fairly
presenting in all material respects the financial condition and results of
operations of the Seller in accordance with GAAP.
     (ii) Quarterly Reporting. Within 60 days after the close of the first three
(3) quarterly periods of each of its respective fiscal years, balance sheets of
each of Originator and its consolidated Subsidiaries and Seller as at the close
of each such period and statements of income and retained earnings and a
statement of cash flows for each such Person (and, in the case of the
Originator, its consolidated Subsidiaries) for the period from the beginning of
such fiscal year to the end of such quarter, all certified by its respective
chief financial officer.

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     (iii) Compliance Certificate. Together with the financial statements
required hereunder, a compliance certificate in substantially the form of
Exhibit V signed by such Seller Party’s Responsible Officer and dated the date
of such annual financial statement or such quarterly financial statement, as the
case may be.
     (iv) Shareholders Statements and Reports. Promptly upon the furnishing
thereof to the shareholders of such Seller Party copies of all financial
statements, reports and proxy statements (other than those which relate solely
to employee benefit plans) so furnished which Consumers files with the
Securities and Exchange Commission.
     (v) Bond Servicing Reports; S.E.C. Filings. Promptly upon the execution,
delivery or filing thereof, (i) copies of all reports, statements, notices and
certificates delivered or received by the Servicer (in its capacity as Servicer
under the Servicing Agreement or otherwise) pursuant to Sections 3.05, 3.06,
3.07, 6.02, Annex 1 and Annex 2 of the Servicing Agreement (excluding any “Daily
Servicer’s Report” delivered pursuant to Annex 2 of the Servicing Agreement),
(ii) copies of all reports and notices delivered to the holders of the
Securitization Bonds, (iii) copies of all amendments, waivers or other
modifications to any of the Basic Documents (as defined in the Servicing
Agreement), (iv) copies of all reports which the Servicer sends to the holders
of any of its securities or its creditors generally and (v) copies of all
registration statements and annual, quarterly, monthly or other regular reports
which Originator or any of its Subsidiaries files with the Securities and
Exchange Commission.
     (vi) Copies of Notices. Promptly upon its receipt of any notice, request
for consent, financial statements, certification, report or other communication
under or in connection with any Transaction Document from any Person other than
the Administrative Agent or Conduit, copies of the same.
     (vii) Change in Credit and Collection Policy. At least thirty (30) days
prior to the effectiveness of any material change in or material amendment to
the Credit and Collection Policy, a copy of the Credit and Collection Policy
then in effect and a notice (A) indicating such change or amendment, and (B) if
such proposed change or amendment would be reasonably likely to adversely affect
the collectibility of the Receivables or decrease the credit quality of any
newly created Receivables, requesting the Administrative Agent’s consent
thereto, such consent not to be unreasonably withheld.
     (viii) Other Information. Promptly, from time to time, such other
information, documents, records or reports relating to the Receivables or the
condition or operations, financial or otherwise, of such Seller Party as the
Administrative Agent may from time to time reasonably request in order to
protect the interests of the Administrative Agent and the Purchasers under or as
contemplated by this Agreement (including, without limitation, any information
relevant to the calculation and allocations described in the Servicing Agreement
and the Intercreditor Agreement).

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          (b) Notices. Such Seller Party will notify the Administrative Agent in
writing of any of the following promptly upon learning of the occurrence
thereof, describing the same and, if applicable, the steps being taken with
respect thereto:
     (i) Amortization Events or Potential Amortization Events. The occurrence of
each Amortization Event and each Potential Amortization Event, by a statement of
a Responsible Officer of such Seller Party.
     (ii) Judgment and Proceedings. (A) (1) The entry of any judgment or decree
against the Servicer if the aggregate amount of all judgments and decrees then
outstanding against the Servicer exceeds $25,000,000 and (2) the institution of
any litigation, arbitration proceeding or governmental proceeding against the
Servicer which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect; and (B) the entry of any judgment or decree
or the institution of any litigation, arbitration proceeding or governmental
proceeding against Seller.
     (iii) Material Adverse Effect. The occurrence of any event or condition
that has had, or could reasonably be expected to have, a Material Adverse
Effect.
     (iv) Termination Date. The occurrence of the “Termination Date” under and
as defined in the Receivables Sale Agreement.
     (v) Defaults Under Other Agreements. With respect to the Seller, the
occurrence of a default or an event of default under any other financing
arrangement pursuant to which Seller is a debtor or an obligor.
     (vi) Downgrade of Originator. Any downgrade in the rating of any
Indebtedness of Originator by S&P or by Moody’s, setting forth the Indebtedness
affected and the nature of such change.
     (vii) Servicer Default. The occurrence of any event or circumstance which
constitutes a Servicer Default (as defined in the Servicing Agreement) or which,
with the giving of notice or the passage of time, would become a Servicer
Default.
          (c) Compliance with Laws and Preservation of Corporate Existence. Such
Seller Party will comply in all respects with all applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect. Such Seller Party will preserve and
maintain its existence, rights and franchises in the jurisdiction of its
organization, and qualify and remain qualified in good standing as a foreign
corporation or limited liability company, as applicable, in each jurisdiction in
which such qualification is necessary in view of its businesses and operations
or the ownership of its properties, provided that such Seller Party shall not be
required to preserve any such right or franchise or to remain so qualified
unless the failure to do so could reasonably be expected to have a Material
Adverse Effect.

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          (d) Audits. Such Seller Party will furnish to the Administrative Agent
from time to time such information with respect to it and the Receivables as the
Administrative Agent may reasonably request. Such Seller Party will, from time
to time during regular business hours as requested by the Administrative Agent
upon reasonable notice, subject to any necessary approval of the Nuclear
Regulatory Commission, permit the Administrative Agent, or its agents or
representatives (and shall cause Transferors to permit the Administrative Agent
or its agents or representatives), (i) to examine and make copies of and
abstracts from all Records in the possession or under the control of such Person
relating to the Receivables, the Related Security, the Securitization Property
and the Servicing Agreement, including, without limitation, the related
Contracts, and (ii) to visit the offices and properties of such Person for the
purpose of examining such materials described in clause (i) above, and to
discuss matters relating to such Person’s financial condition or the Receivables
and the Related Security or any Person’s performance under any of the
Transaction Documents or any Person’s performance under the Contracts and, in
each case, with any of the officers or employees of Seller or the Servicer
having knowledge of such matters. Each such audit shall be at the sole cost of
such Seller Party, provided that such Seller Party shall be required to pay for
(i) during a Level One Enhancement Period, not more than one such audit per
year, (ii) during a Level Two Enhancement Period, not more than two such audits
per year and (iii) during a Level Three Enhancement Period, an unlimited number
of such audits per year.
          (e) Keeping and Marking of Records and Books.
     (i) The Servicer will (and will cause Transferors to) maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables in the event
of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables and the performance of each
Seller Party’s duties under the Transaction Documents and the Servicing
Agreement (including, without limitation, records adequate to permit (A) the
immediate identification of each new Receivable and all Collections of and
adjustments to each existing Receivable and (B) the performance of the
calculations and allocations required by the Intercreditor Agreement and the
Servicing Agreement). The Servicer will (and will cause the Transferors to) give
the Administrative Agent notice of any material change in the administrative and
operating procedures referred to in the previous sentence.
     (ii) Such Seller Party will (and will cause Transferors to) (A) on or prior
to the date hereof, mark its master data processing records and other books and
records relating to the Purchaser Interests with a legend, acceptable to the
Administrative Agent, describing the Purchaser Interests and (B) at any time
after the occurrence of an Amortization Event, upon the request of the
Administrative Agent, deliver to the Administrative Agent all Contracts
(including, without limitation, all multiple originals of any such Contract)
relating to the Receivables, provided, that the requirements of this clause
(B) shall apply solely to any Contract consisting of or evidenced by an
instrument or chattel paper.

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          (f) Compliance with Contracts and Credit and Collection Policy. Such
Seller Party will (and will cause Transferors to) timely and fully (i) perform
and comply with all provisions, covenants and other promises required to be
observed by it under the Contracts related to the Receivables, except where the
failure to so perform or comply could not reasonably be expected to have a
Material Adverse Effect, and (ii) comply in all respects with the Credit and
Collection Policy in regard to each Receivable and the related Contract, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
          (g) Performance and Enforcement of Sale Agreements. Seller will, and
will require each Transferor to, perform each of their respective obligations
and undertakings under and pursuant to the Sale Agreements, will purchase
Receivables thereunder in compliance with the terms thereof and will enforce the
rights and remedies accorded to Seller under the Sale Agreements. Seller will
take all actions to perfect and enforce its rights and interests (and the rights
and interests of the Administrative Agent and the Purchasers as assignees of
Seller) under the Sale Agreements as the Administrative Agent may from time to
time reasonably request, including, without limitation, making claims to which
it may be entitled under any indemnity, reimbursement or similar provision
contained in the Sale Agreements and the Purchase and Contribution Agreement
dated as of April 1, 2002 between Consumers and CRF I (as the same may be
amended, restated or otherwise modified from time to time).
          (h) Ownership. Seller will (or will cause each Transferor to) take all
necessary action to (i) vest legal and equitable title to the Receivables, the
Related Security and the Collections purchased under the Sale Agreements
irrevocably in Seller, free and clear of any Adverse Claims other than Adverse
Claims in favor of the Administrative Agent and the Purchasers (including,
without limitation, the filing of all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect Seller’s interest in such Receivables,
Related Security and Collections and such other action to perfect, protect or
more fully evidence the interest of Seller therein as the Administrative Agent
may reasonably request), and (ii) establish and maintain, in favor of the
Administrative Agent, for the benefit of the Purchasers, a valid and perfected
first priority undivided percentage ownership interest (and/or a valid and
perfected first priority security interest) in all Receivables, Related Security
and Collections to the full extent contemplated herein, free and clear of any
Adverse Claims other than Adverse Claims in favor of the Administrative Agent
for the benefit of the Purchasers (including, without limitation, the filing of
all financing statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to
perfect the Administrative Agent’s (for the benefit of the Purchasers) interest
in such Receivables, Related Security and Collections and such other action to
perfect, protect or more fully evidence the interest of the Administrative Agent
for the benefit of the Purchasers as the Administrative Agent may reasonably
request).
          (i) Purchasers’ Reliance. Seller acknowledges that the Purchasers are
entering into the transactions contemplated by this Agreement in reliance upon
Seller’s identity as a legal entity that is separate from Originator or any
Affiliate thereof (each, a “CMS Entity”). Therefore, from and after the date of
execution and delivery of this Agreement, Seller shall take all reasonable
steps, including, without limitation, all steps that the Administrative Agent or
any Purchaser may from time to time reasonably request, to maintain Seller’s
identity as a separate

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legal entity and to make it manifest to third parties that Seller is an entity
with assets and liabilities distinct from those of any CMS Entity and not just a
division of a CMS Entity. Without limiting the generality of the foregoing and
in addition to the other covenants set forth herein, Seller will:
     (i) conduct its own business in its own name and require that all full-time
employees of Seller, if any, identify themselves as such and not as employees of
any CMS Entity (including, without limitation, by means of providing appropriate
employees with business or identification cards identifying such employees as
Seller’s employees);
     (ii) compensate all employees, consultants and agents directly, from
Seller’s own funds, for services provided to Seller by such employees,
consultants and agents and, to the extent any employee, consultant or agent of
Seller is also an employee, consultant or agent of any CMS Entity, allocate the
compensation of such employee, consultant or agent between Seller and such CMS
Entity, as applicable, on a basis that reflects the services rendered to Seller
and such CMS Entity, as applicable;
     (iii) maintain separate offices and, if such office is located in the
offices of any CMS Entity, Seller shall lease such office at a fair market rent;
     (iv) have separate stationery, invoices and checks in its own name;
     (v) conduct all transactions with each CMS Entity (including, without
limitation, any delegation of its obligations hereunder as Servicer) strictly on
an arm’s-length basis, allocate all overhead expenses for items shared between
Seller and any CMS Entity fairly and reasonably;
     (vi) at all times have at least three Managers, at least one of which is an
Independent Manager;
     (vii) observe all limited liability company formalities as a distinct
entity, and ensure that all limited liability company actions relating to
(A) the selection, maintenance or replacement of the Independent Manager,
(B) the dissolution or liquidation of Seller or (C) the initiation of,
participation in, acquiescence in or consent to any bankruptcy, insolvency,
reorganization or similar proceeding involving Seller, are duly authorized by
unanimous vote of its Managers (including the Independent Manager);
     (viii) maintain Seller’s books and records separate from those of any CMS
Entity thereof and otherwise readily identifiable as its own assets rather than
assets of a CMS Entity;
     (ix) prepare its financial statements separately from those of any CMS
Entity and insure that any consolidated financial statements of any CMS Entity
that include Seller and that are filed with the Securities and Exchange

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Commission or any other governmental agency have notes clearly stating that
Seller is a separate corporate entity and that its assets will be available
first and foremost to satisfy the claims of the creditors of Seller;
     (x) except as herein specifically otherwise provided, maintain the funds or
other assets of Seller separate from, and not commingled with, those of any CMS
Entity and only maintain bank accounts or other depository accounts to which
Seller alone is the account party, into which only Seller or Servicer makes
deposits and from which only Seller or Servicer (or the Administrative Agent
hereunder) has the power to make withdrawals;
     (xi) pay all of Seller’s operating expenses from Seller’s own assets
(except for certain payments by a CMS Entity or other Persons pursuant to
allocation arrangements that comply with the requirements of this
Section 7.1(i));
     (xii) maintain its corporate separateness such that it does not merge or
consolidate with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions, and except as
otherwise contemplated herein) all or substantially all of its assets (whether
now owned or hereafter acquired) to, or acquire all or substantially all of the
assets of, any Person, nor at any time create, have, acquire, maintain or hold
any interest in any Subsidiary; and
     (xiii) take such other actions as are necessary on its part to ensure that
the facts and assumptions set forth in the opinion issued by Skadden, Arps,
Slate, Meagher & Flom, LLP, as counsel for Seller, in connection with the
closing or initial Incremental Purchase under this Agreement and relating to
substantive consolidation issues, and in the certificates accompanying such
opinion, remain true and correct in all material respects at all times.
          (j) Collections. Such Seller Party will cause (i) all checks
representing Collections and Securitization Charge Collections to be remitted to
a Lock-Box, (ii) all other amounts in respect of Collections and Securitization
Charge Collections to be deposited directly to a Collection Account, (iii) all
proceeds from all Lock-Boxes to be deposited by the Servicer into a Collection
Account, (iv) all funds in each Collection Account which is not a Specified
Account to be remitted to a Specified Account as soon as is reasonably
practicable and (v) each Specified Account to be subject at all times to a
Collection Account Agreement that is in full force and effect. In the event any
payments relating to Receivables are remitted directly to Seller or any
Affiliate of Seller, Seller will remit (or will cause all such payments to be
remitted) directly to a Collection Bank and deposited into a Collection Account
within two (2) Business Days following receipt thereof, and, at all times prior
to such remittance, Seller will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of the Administrative
Agent and the Purchasers. Seller will maintain exclusive ownership, dominion and
control (subject to the terms of this Agreement) of each Lock-Box and Collection
Account and shall not grant the right to take dominion and control of any
Lock-Box or Collection Account at a future time or upon the occurrence of a
future event to any Person, except to the

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Administrative Agent as contemplated by this Agreement and the Intercreditor
Agreement. Upon not less than 30 days prior written notice to the Seller and the
Servicer, the Administrative Agent may, in its reasonable discretion, designate
additional Collection Accounts as Specified Accounts and such Specified Accounts
shall be subject to the requirement set forth in clause (v) above. On the date
which is 30 days after the first day of a Level Three Enhancement Period, all
Collection Accounts shall be Specified Accounts and such Specified Accounts
shall be subject to the requirement set forth in clause (v) above.
          (k) Taxes. Seller will file all tax returns and reports required by
law to be filed by it and will promptly pay all taxes and governmental charges
at any time owing, except any such taxes which are not yet delinquent or are
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have been set aside on its
books. Seller will pay when due any taxes payable in connection with the
Receivables, exclusive of taxes on or measured by income or gross receipts of
Conduit, the Administrative Agent or any Financial Institution. Servicer will
pay and discharge before the same shall become delinquent, all taxes and
governmental charges imposed upon it or its property, provided that Servicer
shall not be required to pay or discharge any such tax or governmental charge
(i) which is being contested by it in good faith and by proper procedures or
(ii) the non-payment of which will not have a Material Adverse Effect.
          (l) Insurance. Seller will maintain in effect, or cause to be
maintained in effect, at Seller’s own expense, such casualty and liability
insurance as Seller shall deem appropriate in its good faith business judgment.
          (m) Payment to Transferors. With respect to any Receivable purchased
by Seller from a Transferor, such sale shall be effected under, and in
compliance with the terms of, the applicable Sale Agreement, including, without
limitation, the terms relating to the method of payment and amount and timing of
payments to be made to such Transferor in respect of the purchase price for such
Receivable.
          (n) Restrictions on Activities. Seller will operate its business and
activities such that: it does not engage in any business or activity of any
kind, or enter into any transaction or indenture, mortgage, instrument,
agreement, contract, lease or other undertaking, other than the transactions
contemplated and authorized by this Agreement and the Sale Agreements; and does
not create, incur, guarantee, assume or suffer to exist any indebtedness or
other liabilities, whether direct or contingent, other than (i) as a result of
the endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, (ii) the incurrence of
obligations under this Agreement, (iii) the incurrence of obligations, as
expressly contemplated in the Sale Agreements, to make payment to the applicable
Transferor thereunder for the purchase of Receivables under the applicable Sale
Agreement, and (iv) the incurrence of operating expenses in the ordinary course
of business of the type otherwise contemplated by this Agreement.
          (o) Modification of Limited Liability Company Agreement. Seller will
maintain its limited liability company agreement in conformity with this
Agreement, such that it does not amend, restate, supplement or otherwise modify
its limited liability company agreement

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in any respect that would impair its ability to comply with the terms or
provisions of any of the Transaction Documents, including, without limitation,
Section 7.1(i) of this Agreement;
          (p) Modification of Sale Agreements. Seller will maintain the
effectiveness of, and continue to perform under the Sale Agreements, such that
it does not amend, restate, supplement, cancel, terminate or otherwise modify
either Sale Agreement, or give any consent, waiver, directive or approval
thereunder or waive any default, action, omission or breach under either Sale
Agreement or otherwise grant any indulgence thereunder, without (in each case)
the prior written consent of the Administrative Agent.
          (q) Maintenance of Required Capital Amount. Seller will maintain at
all times the Required Capital Amount (as defined in the Receivables Sale
Agreement) and refrain from making any dividend, distribution, redemption of
capital stock or payment of any subordinated indebtedness which would cause the
Required Capital Amount to cease to be so maintained.
          (r) Performance under Servicing Agreement. Servicer will perform and
comply with all obligations of the Servicer as “Servicer” under the Servicing
Agreement, including, without limitation, its duties and responsibilities
relating to the calculations and allocations required by the Intercreditor
Agreement and the Servicing Agreement.
          (s) Financing Statements for Supplement Indentures. Seller will (or
will cause Originator to) cause the collateral description in each UCC-1
Financing Statement filed pursuant to any Supplement Indenture to expressly
exclude all Receivables, all Related Security, all Collections, each Lock-Box,
each Collection Account and the proceeds thereof in a manner acceptable to the
Administrative Agent.
          Section 7.2 Negative Covenants of the Seller Parties. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
          (a) Name Change, Offices and Records. Seller will not (and will not
permit any Transferor to) (i) make any change to its name (within the meaning of
Section 9-507(c) of any applicable enactment of the UCC), identity, corporate
structure or location of books and records unless, at least thirty (30) days
prior to the effective date of any such name change, change in corporate
structure, or change in location of its books and records Seller notifies the
Administrative Agent thereof and delivers to the Administrative Agent such
financing statements (Forms UCC-1 and UCC-3) authorized or executed by Seller
(if required under applicable law) which the Administrative Agent may reasonably
request to reflect such name change, location change, or change in corporate
structure, together with such other documents and instruments that the
Administrative Agent may reasonably request in connection therewith and has
taken all other steps to ensure that the Administrative Agent, for the benefit
of itself and the Purchasers, continues to have a first priority, perfected
ownership or security interest in the Receivables, the Related Security related
thereto and any Collections thereon, or (ii) change its jurisdiction of
organization unless the Administrative Agent shall have received from the
Seller, prior to such change, (A) those items described in clause (i) hereof,
and (B) if the Administrative Agent or any

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Purchaser shall so request, an opinion of counsel, in form and substance
reasonably satisfactory to such Person, as to such organization and the Seller’s
or the applicable Transferor’s, as applicable, valid existence and good standing
and the perfection and priority of the Administrative Agent’s ownership or
security interest in the Receivables, the Related Security and Collections.
          (b) Change in Payment Instructions to Obligors. Except as may be
required by the Administrative Agent pursuant to Section 8.2(b), such Seller
Party will not add or terminate any bank as a Collection Bank, or make any
change in the instructions to Obligors regarding payments to be made to any
Lock-Box or Collection Account, unless the Administrative Agent shall have
received, at least ten (10) days before the proposed effective date therefor,
(i) written notice of such addition, termination or change and (ii) (A) with
respect to the addition of a Collection Bank or a Collection Account or
Lock-Box, an executed Collection Account Agreement with respect to the new
Collection Account if a Specified Account, or Lock-Box if linked to a Specified
Account and (B) with respect to the addition of a Lock-Box, an executed P.O. Box
Transfer Notice with respect to the new Lock-Box; provided, however, that the
Servicer may make changes in instructions to Obligors regarding payments without
notice to the Administrative Agent if such new instructions require such Obligor
to make payments to an existing Specified Account or Lock-Box.
          (c) Modifications to Contracts and Credit and Collection Policy. Such
Seller Party will not, and will not permit Transferors to, make any change to
the Credit and Collection Policy that would be reasonably likely to adversely
affect the collectibility of the Receivables. Except as provided in
Section 8.2(d), the Servicer will not, and will not permit Transferors to,
extend, amend or otherwise modify the terms of any Receivable or any Contract
related thereto other than in accordance with the Credit and Collection Policy.
          (d) Sales, Liens. Seller will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or grant any option with respect to, or
create or suffer to exist any Adverse Claim upon (including, without limitation,
the filing of any financing statement) or with respect to, any Receivable,
Related Security or Collections, or upon or with respect to any Contract under
which any Receivable arises, or any Lock-Box or Collection Account, or assign
any right to receive income with respect thereto (other than, in each case, the
creation of the interests therein in favor of the Administrative Agent and the
Purchasers provided for herein), and Seller will defend the right, title and
interest of the Administrative Agent and the Purchasers in, to and under any of
the foregoing property, against all claims of third parties claiming through or
under Seller or either Transferor. Seller will not create or suffer to exist any
mortgage, pledge, security interest, encumbrance, lien, charge or other similar
arrangement on any of its inventory, except as contemplated in an Inventory
Facility Intercreditor Agreement.
          (e) Net Receivables Balance. At no time prior to the Amortization Date
shall Seller permit the Net Receivables Balance to be less than an amount equal
to the sum of (i) the Aggregate Capital plus (ii) the Aggregate Reserves.
          (f) Termination Date Determination. Seller will not designate the
Termination Date (as defined in the Receivables Sale Agreement), or send any
written notice to

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Originator in respect thereof, without the prior written consent of the
Administrative Agent, except with respect to the occurrence of such Termination
Date arising pursuant to Section 5.1(d) of the Receivables Sale Agreement.
          (g) Restricted Junior Payments. During the continuation of any
Amortization Event, Seller will not make any Restricted Junior Payment if, after
giving effect thereto, Seller would fail to meet its obligations set forth in
Section 7.2(e).
          (h) Collection Accounts not Subject to Collection Account Agreement.
At any time after the 30th day following the first day of a Level Three
Enhancement Period, such Seller Party will not, and will not permit Transferors
to, direct any Collections to be remitted to any Collection Account not subject
at all times to a Collection Account Agreement.
          (i) Commingling. Such Seller Party shall not deposit or otherwise
credit, or cause or permit to be so deposited or credited, to any Lock-Box or
Collection Account cash or cash proceeds other than Collections and
Securitization Charge Collections.
          (j) Servicing Agreement. Without the consent of the Administrative
Agent, Servicer will not amend, modify or waive any term or condition of
(i) Section 3.02 or Section 5.04 of the Servicing Agreement, (ii) Annex 2 to the
Servicing Agreement, (iii) the definition of the term “Securitization Charges”,
“Securitization Charge Collections” or “Transferred Securitization Property” in
the Servicing Agreement or (iv) to the extent relating to any of the foregoing,
any definition used directly or indirectly in any of the foregoing terms or
conditions.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
          Section 8.1 Designation of Servicer. (a) The servicing, administration
and collection of the Receivables shall be conducted by such Person (the
“Servicer”) so designated from time to time in accordance with this Section 8.1.
Consumers is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms of this Agreement. The
Administrative Agent may at any time designate as Servicer any Person to succeed
Consumers or any successor Servicer.
          (b) Without the prior written consent of the Administrative Agent and
the Required Financial Institutions, Consumers shall not be permitted to
delegate any of its duties or responsibilities as Servicer to any Person other
than (i) Seller and (ii) with respect to certain delinquent Receivables, outside
collection agencies in accordance with its customary practices. Seller shall not
be permitted to further delegate to any other Person any of the duties or
responsibilities of the Servicer delegated to it by Consumers. If at any time
the Administrative Agent shall designate as Servicer any Person other than
Consumers, all duties and responsibilities theretofore delegated by Consumers to
Seller may, at the discretion of the Administrative Agent, be terminated
forthwith on notice given by the Administrative Agent to Consumers and to
Seller.

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          (c) Notwithstanding any delegation by Consumers pursuant to the
foregoing subsection (b), (i) Consumers shall be and remain primarily liable to
the Administrative Agent and the Purchasers for the full and prompt performance
of all duties and responsibilities of the Servicer hereunder and (ii) the
Administrative Agent and the Purchasers shall be entitled to deal exclusively
with Consumers in matters relating to the discharge by the Servicer of its
duties and responsibilities hereunder. The Administrative Agent and the
Purchasers shall not be required to give notice, demand or other communication
to any Person other than Consumers in order for communication to the Servicer
and its sub-servicer or other delegate with respect thereto to be accomplished.
Consumers, at all times that it is the Servicer, shall be responsible for
providing any sub-servicer or other delegate of the Servicer with any notice
given to the Servicer under this Agreement.
          Section 8.2 Duties of Servicer. (a) The Servicer shall take or cause
to be taken all such actions as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.
          (b) The Servicer will instruct all Obligors to pay all Collections and
all Securitization Charge Collections directly to a Lock-Box or Collection
Account. The Servicer shall effect (i) except as agreed to between the Servicer
and the Administrative Agent (such agreement not to be unreasonably withheld), a
Collection Account Agreement substantially in the form of Exhibit VI with each
bank maintaining a Collection Account at any time and (ii) a P.O. Box Transfer
Notice substantially in the form of Exhibit XI with respect to each Lock-Box. In
the case of any remittances received in any Lock-Box or Collection Account that
shall have been identified, to the satisfaction of the Servicer, to not
constitute Collections or other proceeds of the Receivables or the Related
Security, the Servicer shall promptly remit such items to the Person identified
to it as being the owner of such remittances. From and after the date the
Administrative Agent delivers to any Collection Bank a Collection Notice
pursuant to Section 8.3, the Administrative Agent may request that the Servicer,
and the Servicer thereupon promptly shall instruct all Obligors with respect to
the Receivables, to remit all payments thereon to a new depositary account
specified by the Administrative Agent and, at all times thereafter, Seller and
the Servicer shall not deposit or otherwise credit, and shall not permit any
other Person to deposit or otherwise credit to such new depositary account any
cash or payment item other than Collections.
          (c) The Servicer shall administer the Collections in accordance with
the procedures described herein and in Article II. The Servicer shall set aside
and hold in trust for the account of Seller and the Purchasers their respective
shares of the Collections in accordance with Article II. The Servicer shall,
upon the request of the Administrative Agent, segregate, in a manner acceptable
to the Administrative Agent, all cash, checks and other instruments received by
it from time to time constituting Collections from the general funds of the
Servicer or Seller prior to the remittance thereof in accordance with
Article II. If the Servicer shall be required to segregate Collections pursuant
to the preceding sentence, the Servicer shall segregate and deposit with a bank
designated by the Administrative Agent such allocable share of Collections of
Receivables set aside for the Purchasers on the first Business Day following
receipt by the Servicer of such Collections, duly endorsed or with duly executed
instruments of transfer.

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          (d) The Servicer may, in accordance with the Credit and Collection
Policy, extend the maturity of any Receivable or adjust the Outstanding Balance
of any Receivable as the Servicer determines to be appropriate to maximize
Collections thereof; provided, however, that such extension or adjustment shall
not alter the status of such Receivable as a Delinquent Receivable or
Charged-Off Receivable or limit the rights of the Administrative Agent or the
Purchasers under this Agreement. Notwithstanding anything to the contrary
contained herein, the Administrative Agent shall have the absolute and unlimited
right to direct the Servicer to commence or settle any legal action with respect
to any Receivable or to foreclose upon or repossess any Related Security.
          (e) The Servicer shall hold in trust for Seller and the Purchasers all
Records that (i) evidence or relate to the Receivables, the related Contracts
and Related Security or (ii) are otherwise necessary or desirable to collect the
Receivables and shall, as soon as practicable upon demand of the Administrative
Agent, deliver or make available to the Administrative Agent all such Records,
at a place selected by the Administrative Agent. The Servicer shall, as soon as
practicable following receipt thereof turn over to Seller any cash collections
or other cash proceeds received with respect to Indebtedness not constituting
Receivables. The Servicer shall, from time to time at the request of any
Purchaser, furnish to the Purchasers (promptly after any such request) a
calculation of the amounts set aside for the Purchasers pursuant to Article II.
          (f) Any payment by an Obligor in respect of any indebtedness owed by
it to a Transferor or Seller shall, except as otherwise specified by such
Obligor or otherwise required by contract or law, be applied as a Collection of
any Receivable of such Obligor (starting with the oldest such Receivable) to the
extent of any amounts then due and payable thereunder before being applied to
any other receivable or other obligation of such Obligor.
          Section 8.3 Collection Notices. The Administrative Agent is authorized
at any time (i) when an Amortization Event exists or (ii) during a Level Three
Enhancement Period, to date and to deliver to the Collection Banks the
Collection Notices. Seller hereby transfers to the Administrative Agent for the
benefit of the Purchasers, effective when the Administrative Agent delivers such
notice, the exclusive ownership and control of each Collection Account and
control of each Lock-Box. In case any authorized signatory of Seller whose
signature appears on a Collection Account Agreement shall cease to have such
authority before the delivery of such notice, such Collection Notice shall
nevertheless be valid as if such authority had remained in force. Seller hereby
authorizes the Administrative Agent, and agrees that the Administrative Agent
shall be entitled (i) when an Amortization Event exists or (ii) during a Level
Three Enhancement Period to (A) endorse Seller’s name on checks and other
instruments representing Collections, (B) enforce the Receivables, the related
Contracts and the Related Security and (C) take such action as shall be
necessary or desirable to cause all cash, checks and other instruments
constituting Collections of Receivables to come into the possession of the
Administrative Agent rather than Seller.
          Section 8.4 Responsibilities of Seller. Anything herein to the
contrary notwithstanding, the exercise by the Administrative Agent and the
Purchasers of their rights hereunder shall not release the Servicer, any
Transferor or Seller from any of their duties or obligations with respect to any
Receivables or under the related Contracts. Neither the

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Administrative Agent nor the Purchasers shall have any obligation or liability
with respect to any Receivables or related Contracts, nor shall any of them be
obligated to perform the obligations of Seller.
          Section 8.5 Reports. The Servicer shall prepare and forward to the
Administrative Agent (i) on the tenth (10th) Business Day of each month and at
such times as the Agent shall request, a Monthly Report and (ii) at such times
as the Administrative Agent shall reasonably request, an aging of Receivables.
          Section 8.6 Servicing Fees. In consideration of Consumers’ agreement
to act as Servicer hereunder, the Purchasers hereby agree that, so long as
Consumers shall continue to perform as Servicer hereunder, Seller shall pay over
to Consumers a fee (the “Servicing Fee”) on the first calendar day of each
month, in arrears for the immediately preceding month, equal to 1.0% per annum
of the average aggregate Outstanding Balance of all Receivables during such
period, as compensation for its servicing activities.
ARTICLE IX
AMORTIZATION EVENTS
          Section 9.1 Amortization Events. The occurrence of any one or more of
the following events shall constitute an Amortization Event:
          (a) Any Seller Party shall fail (i) (A) during a Level One Enhancement
Period, to make any payment or deposit required hereunder when due and such
failure shall continue for two (2) Business Days and (B) during a Level Two
Enhancement Period or a Level Three Enhancement Period, to make any payment or
deposit required hereunder when due and such failure shall continue for one
(1) Business Day, or (ii) to perform or observe any term, covenant or agreement
hereunder (other than as referred to in clause (i) of this paragraph (a) and
Section 9.1(b) through (k)) and such failure shall continue for five
(5) consecutive Business Days or a “Servicer Default” shall occur under (and as
such term is defined in) the Servicing Agreement.
          (b) Any representation, warranty, certification or statement made by
any Seller Party in this Agreement, any other Transaction Document or in any
other document delivered pursuant hereto or thereto shall prove to have been
(i) with respect to any representations, warranties, certifications or
statements which contain a materiality qualifier, incorrect in any respect when
made or deemed made and (ii) with respect to any representations, warranties,
certifications or statements which do not contain a materiality qualifier,
incorrect in any material respect when made or deemed made.
          (c) (i) Failure of Seller to pay any Indebtedness when due or the
failure of Servicer to pay Indebtedness when due in excess of $25,000,000 and
such failure shall continue after any applicable grace period; or (ii) the
default by any Seller Party in the performance of any term, provision or
condition contained in any agreement under which any such Indebtedness was
created or is governed, the effect of which is to cause, or to permit the holder
or holders of such Indebtedness to cause, such Indebtedness to become due prior
to its stated maturity, unless the

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obligor under or holder of such Indebtedness shall have waived in writing such
circumstance, or such circumstance has been cured so that such circumstance is
no longer continuing; or (iii) any such Indebtedness of any Seller Party shall
be declared to be due and payable or required to be prepaid (other than by a
regularly scheduled payment) prior to the date of maturity thereof; or (iv) any
Indenture Event of Default shall occur.
          (d) (i) Any Seller Party shall generally not pay its debts as such
debts become due or shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors; or
(ii) any proceeding shall be instituted by or against any Seller Party seeking
to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), any such proceeding shall
remain undismissed or unstayed for a period of 30 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its property)
shall occur or (iii) any Seller Party shall take any corporate action to
authorize any of the actions set forth in clauses (i) or (ii) above in this
subsection (d).
          (e) Seller shall fail to comply with the terms of Section 2.7 hereof.
          (f) As at the end of any Accrual Period, (i) the average of the
Dilution Ratios as of the end of such Accrual Period and the two preceding
Accrual Periods shall exceed 2.75%, (ii) the average of the Default Ratios as of
the end of such Accrual Period and the two preceding Accrual Periods shall
exceed 3.50%, (iii) the average of the Past Due Ratios as of the end of such
Accrual Period and the two preceding Accrual Periods shall exceed 7.25% and
(iv) the average of the Days Sales Outstanding Ratios as of the end of such
Accrual Period and the two preceding Accrual Periods shall exceed 55 days.
          (g) A Change of Control shall occur.
          (h) (i) One or more final judgments for the payment of money in an
amount in excess of $10,000 shall be entered against Seller or (ii) one or more
final judgments for the payment of money in an amount in excess of $25,000,000
in the aggregate, shall be entered against the Servicer on claims not covered by
insurance or as to which the insurance carrier has denied its responsibility,
and (i) enforcement proceedings have been commenced by any creditor upon any
such judgment or (ii) such judgment shall continue unsatisfied and in effect for
thirty (30) consecutive days without a stay of execution.
          (i) The “Termination Date” under and as defined in the Receivables
Sale Agreement shall occur under the Receivables Sale Agreement or Originator
shall for any reason cease to transfer Receivables to Seller under the
Receivables Sale Agreement.

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          (j) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the legally
valid, binding and enforceable obligation of Seller, or the Administrative Agent
for the benefit of the Purchasers shall cease to have a valid and perfected
first priority security interest in the Receivables, the Related Security and
the Collections with respect thereto and the Specified Accounts.
          (k) Either of the following events shall occur: (i) Consumers shall
fail to maintain a ratio of Total Consolidated Debt to Total Consolidated
Capitalization of not greater than 0.65 to 1.0 or (ii) Consumers shall permit
the ratio, determined as of the end of each of its fiscal quarters for the then
most-recently ended four fiscal quarters, of (A) Consolidated EBIT to
(B) Consolidated Interest Expense to be less than 2.0 to 1.0. Defined terms used
in this Section 9.1(k) shall have the meanings given to such terms in
Schedule C.
          (l) Any term or provision of the Securitization Charge Sale Agreement
or the Servicing Agreement shall be amended, waived or otherwise modified in any
manner which, in the judgment of the Administrative Agent, has an adverse effect
on the Administrative Agent’s or the Purchasers’ interests under this Agreement.
          (m) Originator shall fail to provide the Administrative Agent (as
assignee of Buyer), within fifteen (15) days of the Closing Date,
acknowledgement copies evidencing the filing of UCC-3 financing statements
substantially in the form of Exhibit VII to the Receivables Sale Agreement
amending the UCC-1 Financing Statements filed pursuant to the Supplement
Indentures Sixty-Eighth through Seventy-Fifth, Seventy-Seventh, Seventy-Ninth,
Eightieth, Eighty-Third, and Eighty-Seventh through Ninety.
          Section 9.2 Remedies. Upon the occurrence and during the continuation
of an Amortization Event, the Administrative Agent may, or upon the direction of
the Required Financial Institutions shall take any of the following actions:
(i) replace the Person then acting as Servicer, (ii) declare the Amortization
Date to have occurred, whereupon the Amortization Date shall forthwith occur,
without demand, protest or further notice of any kind, all of which are hereby
expressly waived by each Seller Party; provided, however, that upon the
occurrence of an Amortization Event described in Section 9.1(d), the
Amortization Date shall automatically occur, without demand, protest or any
notice of any kind, all of which are hereby expressly waived by each Seller
Party, (iii) to the fullest extent permitted by applicable law, declare that the
Default Fee shall accrue with respect to any of the Aggregate Unpaids
outstanding at such time, (iv) deliver the Collection Notices to the Collection
Banks and/or instruct the Postmaster General of the applicable Post Office to
restrict access to the Lock-Boxes, and (v) notify Obligors of the Purchasers’
interest in the Receivables. The aforementioned rights and remedies shall be
without limitation, and shall be in addition to all other rights and remedies of
the Administrative Agent and the Purchasers otherwise available under any other
provision of this Agreement, by operation of law, at equity or otherwise, all of
which are hereby expressly preserved, including, without limitation, all rights
and remedies provided under the UCC, all of which rights shall be cumulative.

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ARTICLE X
INDEMNIFICATION
          Section 10.1 Indemnities by the Seller. Without limiting any other
rights that the Administrative Agent or any Purchaser may have hereunder or
under applicable law, Seller hereby agrees to indemnify (and pay upon demand to)
the Administrative Agent and each Purchaser and their respective assigns,
officers, directors, agents and employees (each an “Indemnified Party”) from and
against any and all damages, losses, claims, taxes, liabilities, costs, expenses
and for all other amounts payable, including reasonable attorneys’ fees (which
attorneys may be employees of the Administrative Agent or such Purchaser) and
disbursements (all of the foregoing being collectively referred to as
“Indemnified Amounts”) awarded against or incurred by any of them arising out of
or as a result of this Agreement or the acquisition, either directly or
indirectly, by a Purchaser of an interest in the Receivables, excluding,
however, in all of the foregoing instances:
     (a) Indemnified Amounts to the extent a final judgment of a court of
competent jurisdiction holds that such Indemnified Amounts resulted from gross
negligence or willful misconduct on the part of the Indemnified Party seeking
indemnification;
     (b) Indemnified Amounts to the extent the same includes losses in respect
of Receivables that are uncollectible on account of the insolvency, bankruptcy
or lack of creditworthiness of the related Obligor; or
     (c) taxes imposed by the jurisdiction in which such Indemnified Party’s
principal executive office is located, on or measured by the overall net income
of such Indemnified Party to the extent that the computation of such taxes is
consistent with the intended characterization for income tax purposes of the
acquisition by the Purchasers of Purchaser Interests as a loan or loans by the
Purchasers to Seller secured by the Receivables, the Related Security, the
Collection Accounts and the Collections;
provided, however, that nothing contained in this sentence shall limit the
liability of Seller or limit the recourse of the Purchasers to Seller for
amounts otherwise specifically provided to be paid by Seller under the terms of
this Agreement. Without limiting the generality of the foregoing
indemnification, but subject to the exclusions in clauses (a), (b) and
(c) above, Seller shall indemnify the Indemnified Parties for Indemnified
Amounts (including, without limitation, losses in respect of uncollectible
receivables, regardless of whether reimbursement therefor would constitute
recourse to Seller) relating to or resulting from:
     (i) the failure of any Receivable included in the calculation of the Net
Receivables Balance as an Eligible Receivable to be an Eligible Receivable at
the time so included;
     (ii) any representation or warranty made by Seller, CRF I or Originator (or
any officers of any such Person) under or in connection with this Agreement, any
other Transaction Document or any other written information or report delivered
by any such

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Person pursuant hereto or thereto, which shall have been false or incorrect when
made or deemed made;
     (iii) the failure by Seller, CRF I or Originator to comply with any
applicable law, rule or regulation with respect to any Receivable or Contract
related thereto, or the nonconformity of any Receivable or Contract included
therein with any such applicable law, rule or regulation, the violation of which
shall cause the Receivables to be uncollectible or unenforceable by Seller, the
Administrative Agent or the Purchasers in whole or in part, or any failure of
CRF I or Originator to keep or perform any of its obligations, express or
implied, with respect to any Contract;
     (iv) any failure of Seller, CRF I or Originator to perform its duties,
covenants or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document;
     (v) any products liability, personal injury or damage suit, or other
similar claim arising out of or in connection with merchandise, insurance or
services that are the subject of any Contract or any Receivable;
     (vi) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable
(including, without limitation, a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other claim
resulting from the provision of goods, electricity, gas or services related to
such Receivable or the furnishing or failure to furnish such goods, electricity,
gas or services;
     (vii) the commingling of Collections of Receivables at any time with other
funds;
     (viii) any investigation, litigation or proceeding initiated by a party
other than a Purchaser or the Administrative Agent related to or arising from
this Agreement, any other Transaction Document, the Servicing Agreement or any
other Basic Document (as defined in the Servicing Agreement), the transactions
contemplated hereby, the use of the proceeds of an Incremental Purchase or a
Reinvestment, the ownership of the Purchaser Interests or any other
investigation, litigation or proceeding relating to Seller, CRF I or Originator
in which any Indemnified Party becomes involved as a result of any of the
transactions contemplated hereby, provided that Seller shall have no obligation
to indemnify any Indemnified Party under this paragraph (viii) for Indemnified
Amounts to the extent a final judgment of a court of competent jurisdiction
holds that such Indemnified Amounts resulted from gross negligence or willful
misconduct on the part of the Indemnified Party seeking indemnification;
     (ix) any inability to litigate any claim against any Obligor in respect of
any Receivable as a result of such Obligor being immune from civil and
commercial law and suit on the grounds of sovereignty or otherwise from any
legal action, suit or proceeding;

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     (x) any Amortization Event described in Section 9.1(d);
     (xi) any failure of Seller to acquire and maintain legal and equitable
title to, and ownership of any Receivable and the Related Security and
Collections with respect thereto from the applicable Transferor, free and clear
of any Adverse Claim (other than as created hereunder); or any failure of Seller
to give reasonably equivalent value to a Transferor under the applicable Sale
Agreement in consideration of the transfer by such Transferor of any Receivable,
or any attempt by any Person to void such transfer under statutory provisions or
common law or equitable action;
     (xii) any failure to vest and maintain vested in the Administrative Agent
for the benefit of the Purchasers, or to transfer to the Administrative Agent
for the benefit of the Purchasers, legal and equitable title to, and ownership
of, a first priority perfected undivided percentage ownership interest (to the
extent of the Purchaser Interests contemplated hereunder) or security interest
in the Receivables, the Related Security and the Collections, free and clear of
any Adverse Claim (except as created by the Transaction Documents);
     (xiii) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any Receivable,
the Related Security and Collections with respect thereto, and the proceeds of
any thereof, whether at the time of any Incremental Purchase or Reinvestment or
at any subsequent time;
     (xiv) any action or omission by Seller (other than in accordance with or as
contemplated by this Agreement or any other Transaction Document) which reduces
or impairs the rights of the Administrative Agent or the Purchasers with respect
to any Receivable and the Related Security and Collections with respect thereto
or the value of any such Receivable and the Related Security and Collections
with respect thereto; and
     (xv) any attempt by any Person to void any Incremental Purchase or
Reinvestment hereunder under statutory provisions or common law or equitable
action.
          Section 10.2 Indemnities by the Servicer. Without limiting any other
rights that an Indemnified Party may have hereunder or under applicable law, the
Servicer hereby agrees to indemnify each Indemnified Party from and against any
and all Indemnified Amounts that may be imposed on, incurred by or asserted
against an Indemnified Party in any way arising out of or relating to:
          (a) any representation or warranty made by the Servicer (or any
officers of Servicer) under or in connection with this Agreement, any other
Transaction Document or any other written information or report delivered by the
Servicer pursuant hereto or thereto, which shall have been false or incorrect
when made or deemed made;
          (b) the failure by the Servicer to comply with any applicable law,
rule or regulation with respect to any Receivable or Contract related thereto,
the violation of which shall

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cause the Receivables to be uncollectible or unenforceable by Seller, the
Administrative Agent or the Purchasers in whole or in part;
          (c) any failure of Servicer to perform its duties, covenants or other
obligations in accordance with the provisions of this Agreement or any other
Transaction Document;
          (d) the commingling of Collections of Receivables at any time with
other funds;
          (e) any action or omission by Servicer (other than in accordance with
or as contemplated by this Agreement or any other Transaction Document) which
reduces or impairs the rights of the Administrative Agent or the Purchasers with
respect to any Receivable and the Related Security and Collections with respect
thereto or the value of any Receivable and the Related Security and Collections
with respect thereto; and
          (f) the failure of any Receivable treated as or represented by the
Servicer to be an Eligible Receivable to be an Eligible Receivable at the time
so treated or represented;
excluding, however, in all of the foregoing instances Indemnified Amounts to the
extent a final judgment of a court of competent jurisdiction holds that such
Indemnified Amounts resulted from gross negligence or willful misconduct on the
part of the Indemnified Party seeking indemnification.
          Section 10.3 Increased Cost and Reduced Return. If after the date
hereof, any Funding Source shall be charged any fee, expense or increased cost
on account of the adoption of any applicable law, rule or regulation (including
any applicable law, rule or regulation regarding capital adequacy) or any change
in any of the foregoing, or any change in the interpretation or administration
thereof by any governmental authority, any central bank or any comparable agency
charged with the interpretation or administration thereof, or compliance with
any request or directive (whether or not having the force of law) of any such
authority or agency (a “Regulatory Change”): (i) that subjects any Funding
Source to any charge or withholding on or with respect to any Funding Agreement
or a Funding Source’s obligations under a Funding Agreement, or on or with
respect to the Receivables, or changes the basis of taxation of payments to any
Funding Source of any amounts payable under any Funding Agreement (except for
changes in the rate of tax on the overall net income of a Funding Source or
taxes excluded by Section 10.1) or (ii) that imposes, modifies or deems
applicable any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of a Funding
Source, or credit extended by a Funding Source pursuant to a Funding Agreement
or (iii) that imposes any other condition the result of which is to increase the
cost to a Funding Source of performing its obligations under a Funding
Agreement, or to reduce the amount of any sum received or receivable by a
Funding Source under a Funding Agreement or to require any payment calculated by
reference to the amount of interests or loans held or interest received by it,
then, upon presentation to the Seller of a certificate setting forth the basis
for such determination and the additional amounts reasonably determined by the
Administrative Agent to reasonably compensate such Funding Source for the period
of up to 90 days prior to the date on which such certificate is delivered to
Seller, Seller shall pay to the Administrative Agent, for the

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benefit of the relevant Funding Source, such amounts charged to such Funding
Source or such amounts to otherwise compensate such Funding Source for such
increased cost or such reduction.
          Section 10.4 Other Costs and Expenses. Seller shall pay to the
Administrative Agent and Conduit on demand all reasonable costs and
out-of-pocket expenses in connection with the preparation, execution, delivery
and administration of this Agreement, the transactions contemplated hereby and
the other documents to be delivered hereunder, including without limitation, the
reasonable cost of Conduit’s auditors auditing the books, records and procedures
of Seller, reasonable fees and out-of-pocket expenses of legal counsel for
Conduit and the Administrative Agent (which such counsel may be employees of
Conduit or the Administrative Agent) with respect thereto and with respect to
advising Conduit and the Administrative Agent as to their respective rights and
remedies under this Agreement. Seller shall pay to the Administrative Agent on
demand any and all reasonable costs and expenses of the Administrative Agent and
the Purchasers, if any, including reasonable counsel fees and expenses in
connection with the enforcement of this Agreement and the other documents
delivered hereunder and in connection with any restructuring or workout of this
Agreement or such documents (including any amendments hereto or thereto), or the
administration of this Agreement following an Amortization Event.
ARTICLE XI
THE AGENT
          Section 11.1 Authorization and Action. Each Purchaser hereby
designates and appoints Bank One to act as its agent hereunder and under each
other Transaction Document, and authorizes the Administrative Agent to take such
actions as agent on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of this Agreement and the other
Transaction Documents together with such powers as are reasonably incidental
thereto. The Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein or in any other Transaction Document,
nor any fiduciary relationship with any Purchaser, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities on the part of
the Administrative Agent shall be read into this Agreement or any other
Transaction Document or otherwise exist for the Administrative Agent. In
performing its functions and duties hereunder and under the other Transaction
Documents, the Administrative Agent shall act solely as agent for the Purchasers
and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for any Seller Party or any of such
Seller Party’s successors or assigns. The Administrative Agent shall not be
required to take any action that exposes the Administrative Agent to personal
liability or that is contrary to this Agreement, any other Transaction Document
or applicable law. The appointment and authority of the Administrative Agent
hereunder shall terminate upon the indefeasible payment in full of all Aggregate
Unpaids. Each Purchaser hereby authorizes the Administrative Agent to execute
each of the UCC financing statements, the Intercreditor Agreement and such other
Transaction Documents as may require the Administrative Agent’s signature on
behalf of such Purchaser (the terms of which shall be binding on such
Purchaser).

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          Section 11.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and each other Transaction
Document by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care.
          Section 11.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be (i) liable for
any action lawfully taken or omitted to be taken by it or them under or in
connection with this Agreement or any other Transaction Document (except for
its, their or such Person’s own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Purchasers for any recitals,
statements, representations or warranties made by any Seller Party contained in
this Agreement, any other Transaction Document or any certificate, report,
statement or other document referred to or provided for in, or received under or
in connection with, this Agreement, or any other Transaction Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, or any other Transaction Document or any other document
furnished in connection herewith or therewith, or for any failure of any Seller
Party to perform its obligations hereunder or thereunder, or for the
satisfaction of any condition specified in Article VI, or for the perfection,
priority, condition, value or sufficiency of any collateral pledged in
connection herewith. The Administrative Agent shall not be under any obligation
to any Purchaser to ascertain or to inquire as to the observance or performance
of any of the agreements or covenants contained in, or conditions of, this
Agreement or any other Transaction Document, or to inspect the properties, books
or records of the Seller Parties. The Administrative Agent shall not be deemed
to have knowledge of any Amortization Event or Potential Amortization Event
unless the Administrative Agent has received notice of such Amortization Event
or Potential Amortization Event from Seller or a Purchaser.
          Section 11.4 Reliance by Administrative Agent. The Administrative
Agent shall in all cases be entitled to rely, and shall be fully protected in
relying, upon any document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to Seller), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall in all cases be fully
justified in failing or refusing to take any action under this Agreement or any
other Transaction Document unless it shall first receive such advice or
concurrence of Conduit or the Required Financial Institutions or all of the
Purchasers, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers, provided that unless and
until the Administrative Agent shall have received such advice, the
Administrative Agent may take or refrain from taking any action, as the
Administrative Agent shall deem advisable and in the best interests of the
Purchasers. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Conduit or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
          Section 11.5 Non-Reliance on Administrative Agent and Other
Purchasers. Each Purchaser expressly acknowledges that neither the
Administrative Agent, nor any of its

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officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Administrative
Agent hereafter taken, including, without limitation, any review of the affairs
of any Seller Party, shall be deemed to constitute any representation or
warranty by the Administrative Agent. Each Purchaser represents and warrants to
the Administrative Agent that it has and will, independently and without
reliance upon the Administrative Agent or any other Purchaser and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of Seller and made its own
decision to enter into this Agreement, the other Transaction Documents and all
other documents related hereto or thereto.
          Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Administrative Agent and its
officers, directors, employees, representatives and agents ratably according to
their Pro Rata Shares, to the extent not paid or reimbursed by the Seller
Parties (i) for any amounts for which the Administrative Agent, acting in its
capacity as Administrative Agent, is entitled to reimbursement by the Seller
Parties hereunder and (ii) for any other expenses incurred by the Administrative
Agent, in its capacity as Administrative Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
          Section 11.7 Administrative Agent in its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with Seller or any Affiliate of
Seller as though the Administrative Agent were not the Administrative Agent
hereunder. With respect to the acquisition of Purchaser Interests pursuant to
this Agreement, the Administrative Agent shall have the same rights and powers
under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Administrative Agent, and the terms
“Financial Institution,” “Purchaser,” “Financial Institutions” and “Purchasers”
shall include the Administrative Agent in its individual capacity.
          Section 11.8 Successor Administrative Agent. The Administrative Agent
may, upon five (5) days’ notice to Seller and the Purchasers, and the
Administrative Agent will, upon the direction of all of the Purchasers (other
than the Administrative Agent, in its individual capacity) resign as
Administrative Agent. If the Administrative Agent shall resign, then the
Required Financial Institutions during such five-day period shall appoint from
among the Purchasers a successor agent. If for any reason no successor
Administrative Agent is appointed by the Required Financial Institutions during
such five-day period, then effective upon the termination of such five day
period, the Purchasers shall perform all of the duties of the Administrative
Agent hereunder and under the other Transaction Documents and Seller and the
Servicer (as applicable) shall make all payments in respect of the Aggregate
Unpaids directly to the applicable Purchasers and for all purposes shall deal
directly with the Purchasers. After the effectiveness of any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Transaction Documents and the
provisions of this Article XI and Article X shall continue in effect for its
benefit with respect to any actions taken or omitted to be

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taken by it while it was Administrative Agent under this Agreement and under the
other Transaction Documents.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
          Section 12.1 Assignments. (a) Seller and each Financial Institution
hereby agree and consent to the complete or partial assignment by each Conduit
of all or any portion of its rights under, interest in, title to and obligations
under this Agreement (i) to the Financial Institutions pursuant to this
Agreement or pursuant to the Liquidity Agreement, (ii) to any other issuer of
commercial paper notes sponsored or administered by Bank One or (iii) to any
other Person; provided that, except (A) after the occurrence and during the
continuation of an Amortization Event or (B) during a Level Two Enhancement
Period or a Level Three Enhancement Period, such Conduit may not make any such
assignment pursuant to this clause (iii), except in the event that the
circumstances described in Section 12.1(c) occur, without the consent of the
Seller (which consent shall not be unreasonably withheld or delayed). Upon such
assignment, such Conduit shall be released from its obligations so assigned.
Further, Seller and each Financial Institution hereby agree that any assignee of
Conduit of this Agreement or all or any of the Purchaser Interests of Conduit
shall have all of the rights and benefits under this Agreement as if the term
“Conduit” explicitly referred to such party, and no such assignment shall in any
way impair the rights and benefits of Conduit hereunder. Neither Seller nor the
Servicer shall have the right to assign its rights or obligations under this
Agreement.
          (b) Any Financial Institution may at any time and from time to time
assign to one or more Persons (“Purchasing Financial Institutions”) all or any
part of its rights and obligations under this Agreement pursuant to an
assignment agreement, substantially in the form set forth in Exhibit VII hereto
(the “Assignment Agreement”) executed by such Purchasing Financial Institution
and such selling Financial Institution, provided, that an assignment made by an
Affected Financial Institution pursuant to paragraph (c) below may occur at any
time. The consent of Conduit and, other than (A) after the occurrence and during
the continuation of an Amortization Event or (B) during a Level Two Enhancement
Period or a Level Three Enhancement Period, the Seller (such consent not to be
unreasonably withheld) shall be required prior to the effectiveness of any such
assignment. Notwithstanding the foregoing, an assignment made by an Affected
Financial Institution pursuant to paragraph (c) below may occur without the
consent of Seller; provided that if the Affected Financial Institution is not
Bank One or an Affiliate of Bank One, the Administrative Agent agrees to use
reasonable efforts to choose an assignee of such Affected Financial Institution
that is acceptable to Seller; provided further however, that if the
Administrative Agent and Seller do not agree on such an assignee within ten
(10) Business Days after such Affected Financial Institution becomes an Affected
Financial Institution, the Administrative Agent may choose an assignee in its
sole discretion. Each assignee of a Financial Institution must (i) have a
short-term debt rating of A-1 or better by S&P and P-1 by Moody’s and (ii) agree
to deliver to the Administrative Agent, promptly following any request therefor
by the Administrative Agent or Conduit, an enforceability opinion in form and
substance satisfactory to the Administrative Agent and Conduit. Upon delivery of
the executed Assignment Agreement to the Administrative Agent, such selling
Financial Institution

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shall be released from its obligations hereunder to the extent of such
assignment. Thereafter the Purchasing Financial Institution shall for all
purposes be a Financial Institution party to this Agreement and shall have all
the rights and obligations of a Financial Institution under this Agreement to
the same extent as if it were an original party hereto and no further consent or
action by Seller, the Purchasers or the Administrative Agent shall be required.
          (c) Each of the Financial Institutions agrees that in the event that
it shall cease to have a short-term debt rating of A-1 or better by S&P and P-1
by Moody’s (an “Affected Financial Institution”), such Affected Financial
Institution shall be obligated, at the request of Conduit or the Administrative
Agent, to assign all of its rights and obligations hereunder to (x) another
Financial Institution or (y) another funding entity nominated by the
Administrative Agent and acceptable to Conduit, and willing to participate in
this Agreement through the Liquidity Termination Date in the place of such
Affected Financial Institution; provided that the Affected Financial Institution
receives payment in full, pursuant to an Assignment Agreement, of an amount
equal to such Financial Institution’s Pro Rata Share of the Aggregate Capital
and Yield owing to the Financial Institutions and all accrued but unpaid fees
and other costs and expenses payable in respect of its Pro Rata Share of the
Purchaser Interests of the Financial Institutions.
          Section 12.2 Participations. Any Financial Institution may, in the
ordinary course of its business at any time sell to one or more Persons (each a
“Participant”) participating interests in its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, its obligation to pay Conduit its
Acquisition Amounts or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution’s rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Conduit and the Administrative Agent shall
continue to deal solely and directly with such Financial Institution in
connection with such Financial Institution’s rights and obligations under this
Agreement. Each Financial Institution agrees that any agreement between such
Financial Institution and any such Participant in respect of such participating
interest shall not restrict such Financial Institution’s right to agree to any
amendment, supplement, waiver or modification to this Agreement, except for any
amendment, supplement, waiver or modification described in Section 13.1(b)(i).
          Section 12.3 Extension of Liquidity Termination Date. The Seller may
advise the Administrative Agent in writing of its desire to extend the Liquidity
Termination Date for an additional 364 days, provided such request is made not
more than 90 days prior to, and not less than 60 days prior to, the then current
Liquidity Termination Date. The Administrative Agent, upon being so advised by
the Seller, shall promptly notify each Financial Institution of any such request
and each such Financial Institution shall notify the Administrative Agent and
the Seller of its decision to accept or decline the request for such extension
no later than 30 days prior to the then current Liquidity Termination Date (it
being understood that each Financial Institution may accept or decline such
request in its sole discretion and on such terms as it may elect, and the
failure to so notify the Administrative Agent and the Seller shall be deemed an
election not to extend by such Financial Institution). In the event that at
least one Financial Institution agrees to extend the Liquidity Termination Date,
the Seller Parties, the Administrative Agent, the

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extending Financial Institutions shall enter into such documents as such
extending Financial Institutions may deem necessary or appropriate to reflect
such extension, and all reasonable costs and expenses incurred by such Financial
Institutions and the Administrative Agent (including reasonable attorneys’ fees)
shall be paid by the Seller. In the event that any Financial Institution
declines the request to extend the Liquidity Termination Date (each such
Financial Institution being referred to herein as a “Non-Renewing Financial
Institution”), and, in the case of a Non-Renewing Financial Institution
described in clause (a), the Commitment of such Non-Renewing Financial
Institution is not assigned to another Person in accordance with the terms of
this Article XII prior to the then current Liquidity Termination Date, the
Purchase Limit shall be reduced by an amount equal to each such Non-Renewing
Financial Institution’s Commitment on the then current Liquidity Termination
Date.
          Section 12.4 Terminating Financial Institutions.
          (a) Any Affected Financial Institution or Non-Renewing Financial
Institution which has not assigned its rights and obligations hereunder if
requested pursuant to this Article XII shall be a “Terminating Financial
Institution” for purposes of this Agreement as of the then current Liquidity
Termination Date (or, in the case of any Affected Financial Institution, such
earlier date as declared by the Administrative Agent).
          (b) The Commitment of any Financial Institution shall terminate on the
date it becomes a Terminating Financial Institution. Upon reduction to zero of
the Capital of all of the Purchaser Interests of a Terminating Financial
Institution (after application of Collections thereto pursuant to Sections 2.2
and 2.4) all rights and obligations of such terminating Financial Institution
hereunder shall be terminated and such terminating Financial Institution shall
no longer be a “Financial Institution” hereunder; provided, however, that the
provisions of Article X shall continue in effect for its benefit with respect to
Purchaser Interests or the Commitment held by such Terminating Financial
Institution prior to its termination as a Financial Institution.
ARTICLE XIII
MISCELLANEOUS
          Section 13.1 Waivers and Amendments. (a) No failure or delay on the
part of the Administrative Agent or any Purchaser in exercising any power, right
or remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any other
further exercise thereof or the exercise of any other power, right or remedy.
The rights and remedies herein provided shall be cumulative and nonexclusive of
any rights or remedies provided by law. Any waiver of this Agreement shall be
effective only in the specific instance and for the specific purpose for which
given.
          (b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing in accordance with the provisions of this
Section 13.1(b). Conduit, Seller and the Administrative Agent, at the direction
of the Required Financial Institutions, may enter into written modifications or
waivers of any provisions of this Agreement, provided, however, that no such
modification or waiver shall:

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     (i) without the consent of each affected Purchaser, (A) extend the
Liquidity Termination Date or the date of any payment or deposit of Collections
by Seller or the Servicer, (B) reduce the rate or extend the time of payment of
Yield (or any component thereof), (C) reduce any fee payable to the
Administrative Agent for the benefit of the Purchasers, (D) except pursuant to
Article XII hereof, change the amount of the Capital of any Purchaser, any
Financial Institution’s Pro Rata Share (except as may be required pursuant to
the Liquidity Agreement) or any Financial Institution’s Commitment, (E) amend,
modify or waive any provision of the definition of Required Financial
Institutions, this Section 13.1(b) or Section 9.1, (F) consent to or permit the
assignment or transfer by Seller of any of its rights and obligations under this
Agreement, (G) change the definition of “Applicable Maximum Purchaser Interest,”
“Applicable Stress Factor,” “Dilution Percentage,” “Dilution Reserve,” “Eligible
Receivable,” “Level One Enhancement Period,” “Level Two Enhancement Period,”
“Level Three Enhancement Period,” “Loss Reserve,” “Loss Percentage,” “Yield and
Servicer Fee Reserve,” or “Yield and Servicer Fee Percentage,” or (H) amend or
modify any defined term (or any defined term used directly or indirectly in such
defined term) used in clauses (A) through (G) above in a manner that would
circumvent the intention of the restrictions set forth in such clauses; or
     (ii) without the written consent of the then Administrative Agent, amend,
modify or waive any provision of this Agreement if the effect thereof is to
affect the rights or duties of the Administrative Agent.
Any modification or waiver made in accordance with this Section 13.1 shall apply
to each of the Purchasers equally and shall be binding upon Seller, the
Purchasers and the Administrative Agent.
          Section 13.2 Notices. Except as provided in this Section 13.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective if given by facsimile transmission, upon
confirmation of receipt thereof, if given by mail, three (3) Business Days after
the time such communication is deposited in the mail with first class postage
prepaid or if given by any other means, when received at the address specified
in this Section 13.2. Seller and Servicer hereby authorize the Administrative
Agent to effect purchases and Tranche Period and Bank Rate selections based on
telephonic notices made by any Person whom the Administrative Agent in good
faith believes to be acting on behalf of Seller. Seller agrees to deliver
promptly to the Administrative Agent a written confirmation of each telephonic
notice signed by an authorized officer of Seller; provided, however, the absence
of such confirmation shall not affect the validity of such notice. If the
written confirmation differs from the action taken by the Administrative Agent,
the records of the Administrative Agent shall govern absent manifest error.

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          Section 13.3 Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.3 or 10.4) in a greater proportion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
          Section 13.4 Protection of Ownership Interests of the Purchasers.
(a) Seller agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents, and take all actions, that
may be necessary or desirable, or that the Administrative Agent may request, to
perfect, protect or more fully evidence the Purchaser Interests, or to enable
the Administrative Agent or the Purchasers to exercise and enforce their rights
and remedies hereunder. At any time after the occurrence and during the
continuation of an Amortization Event, the Administrative Agent may, or the
Administrative Agent may direct Seller or the Servicer to, notify the Obligors
of Receivables, at Seller’s expense, of the ownership or security interests of
the Purchasers under this Agreement and may also direct that payments of all
amounts due or that become due under any or all Receivables be made directly to
the Administrative Agent or its designee. Seller or the Servicer (as applicable)
shall, at any Purchaser’s request, withhold the identity of such Purchaser in
any such notification.
          (b) If any Seller Party fails to perform any of its obligations
hereunder, the Administrative Agent or any Purchaser may (but shall not be
required to), after providing notice to such Seller Party, perform, or cause
performance of, such obligations, and the Administrative Agent’s or such
Purchaser’s costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.4. Each Seller Party irrevocably authorizes
the Administrative Agent at any time and from time to time in the sole
discretion of the Administrative Agent, and appoints the Administrative Agent as
its attorney-in-fact, to act on behalf of such Seller Party (i) to execute on
behalf of Seller as debtor and to file financing statements necessary or
desirable in the Administrative Agent’s sole discretion, after providing notice
to such Seller Party, to perfect and to maintain the perfection and priority of
the interest of the Purchasers in the Receivables and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Receivables as a financing statement in such offices as the
Administrative Agent in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the interests of the
Purchasers in the Receivables. This appointment is coupled with an interest and
is irrevocable.
          Section 13.5 Confidentiality. (a) Each Seller Party and each Purchaser
shall maintain and shall cause each of its employees and officers to maintain
the confidentiality of this Agreement and the other confidential or proprietary
information with respect to the Administrative Agent and Conduit and their
respective businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
such Seller Party and such Purchaser and its officers and employees may

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disclose such information to such Seller Party’s and such Purchaser’s external
accountants and attorneys and as required by any applicable law, regulation or
order of any judicial, regulatory or administrative proceeding (whether or not
having the force of law). Anything herein to the contrary notwithstanding, each
Seller Party, each Purchaser, the Administrative Agent, each Indemnified Party
and any successor or assign of any of the foregoing (and each employee,
representative or other agent of any of the foregoing) may disclose to any and
all Persons, without limitation of any kind, the “tax treatment” and “tax
structure” (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated herein and all
materials of any kind (including opinions or other tax analyses) that are or
have been provided to any of the foregoing relating to such tax treatment or tax
structure, and it is hereby confirmed that each of the foregoing have been so
authorized since the commencement of discussions regarding the transactions.
          (b) Anything herein to the contrary notwithstanding, each Seller Party
hereby consents to the disclosure of any nonpublic information with respect to
it (i) to the Administrative Agent, the Financial Institutions or Conduit by
each other, (ii) by the Administrative Agent or the Purchasers to any
prospective or actual assignee or participant of any of them and (iii) by the
Administrative Agent to any rating agency, Commercial Paper dealer or provider
of a surety, guaranty or credit or liquidity enhancement to Conduit or any
entity organized for the purpose of purchasing, or making loans secured by,
financial assets for which Bank One acts as the administrative agent and to any
officers, directors, employees, outside accountants and attorneys of any of the
foregoing, provided each such Person is informed of the confidential nature of
such information. In addition, the Purchasers and the Administrative Agent may
disclose any such nonpublic information pursuant to any law, rule, regulation,
direction, request or order of any judicial, administrative or regulatory
authority or proceedings (whether or not having the force or effect of law).
          Section 13.6 Bankruptcy Petition. Seller, the Servicer, the
Administrative Agent and each Financial Institution hereby covenants and agrees
that, prior to the date that is one year and one day after the payment in full
of all outstanding senior indebtedness of Conduit, it will not institute
against, or join any other Person in instituting against, Conduit any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or any state of
the United States.
          Section 13.7 Limitation of Liability. (a) No claim may be made by any
party to this Agreement or any other Person against any other party hereto or
any Financial Institution or their respective Affiliates, directors, officers,
employees, attorneys or agents for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement, or any act, omission or event occurring in connection
therewith; and each party to this Agreement hereby waives, releases, and agrees
not to sue upon any claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor, except, with respect to
any claim against any party hereto (other than the Conduit) arising due to such
Person’s gross negligence or willful misconduct.

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          (b) Notwithstanding any provisions contained in this Agreement or any
other Transaction Document to the contrary, Conduit shall not be obligated to
pay any amount pursuant to this Agreement or any other Transaction Document
unless Conduit has excess cash flow from operations or has received funds which
may be used to make such payment and which funds or excess cash flow are not
required to repay any of Conduit’s Commercial Paper when due. Any amount which
Conduit does not pay pursuant to the operation of the preceding sentence shall
not constitute a claim against Conduit for any such insufficiency. The
agreements in this section shall survive the termination of this Agreement and
the other Transaction Documents.
          Section 13.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT
REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
          Section 13.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER
OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.
          Section 13.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
SELLER PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.

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          Section 13.11 Integration; Binding Effect; Survival of Terms.
          (a) This Agreement and each other Transaction Document contain the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
          (b) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns
(including any trustee in bankruptcy). This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms and shall remain in full force and effect until terminated in
accordance with its terms; provided, however, that the rights and remedies with
respect to (i) any breach of any representation and warranty made by any Seller
Party pursuant to Article V, (ii) the indemnification and payment provisions of
Article X, and Sections 13.5, 13.6 and 13.7 shall be continuing and shall
survive any termination of this Agreement.
          Section 13.12 Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Any provisions of this Agreement which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to “Article,” “Section,” “Schedule” or “Exhibit” shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
          Section 13.13 Bank One Roles. Each of the Financial Institutions
acknowledges that Bank One acts, or may in the future act, (i) as administrative
agent for Conduit or any Financial Institution, (ii) as issuing and paying agent
for the Commercial Paper, (iii) to provide credit or liquidity enhancement for
the timely payment for the Commercial Paper and (iv) to provide other services
from time to time for Conduit or any Financial Institution (collectively, the
“Bank One Roles”). Without limiting the generality of this Section 13.13, each
Financial Institution hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action that it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Conduit.
          Section 13.14 Characterization. (a) It is the intention of the parties
hereto that each purchase hereunder shall constitute and be treated as an
absolute and irrevocable sale, which purchase shall provide the applicable
Purchaser with the full benefits of ownership of the applicable Purchaser
Interest. Except as specifically provided in this Agreement, each sale of a
Purchaser Interest hereunder is made without recourse to Seller; provided,
however, that (i) Seller shall be liable to each Purchaser and the
Administrative Agent for all representations, warranties, covenants and
indemnities made by Seller pursuant to the terms of this Agreement, and
(ii) such sale does not constitute and is not intended to result in an
assumption by any

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Purchaser or the Administrative Agent or any assignee thereof of any obligation
of Seller, CRF I, Originator or any other Person arising in connection with the
Receivables, the Related Security, or the related Contracts, or any other
obligations of Seller, CRF I or Originator.
          (b) In addition to any ownership interest which the Administrative
Agent may from time to time acquire pursuant hereto, Seller hereby grants to the
Administrative Agent for the ratable benefit of the Purchasers a valid and
perfected security interest in all of Seller’s right, title and interest in, to
and under all Receivables now existing or hereafter arising, the Collections,
each Lock-Box, each Collection Account, all Related Security, all other rights
and payments relating to such Receivables, all of Seller’s rights, title and
interest in, to and under the Sale Agreements (including, without limitation,
(a) all rights to indemnification arising thereunder and (b) all UCC financing
statements filed pursuant thereto), and all proceeds of any thereof and all
other assets in which the Administrative Agent on behalf of the Purchasers has
acquired, may hereafter acquire and/or purports to have acquired an interest
under this Agreement prior to all other liens on and security interests therein
to secure the prompt and complete payment of the Aggregate Unpaids. The
Administrative Agent and the Purchasers shall have, in addition to the rights
and remedies that they may have under this Agreement, all other rights and
remedies provided to a secured creditor under the UCC and other applicable law,
which rights and remedies shall be cumulative. The Seller hereby authorizes the
Administrative Agent, within the meaning of 9-509 of any applicable enactment of
the UCC, as secured party for the benefit of itself and of the Purchasers, to
file, without the signature of the Seller, CRF I or Originator, as debtors, the
UCC financing statements contemplated herein and under the Sale Agreements. The
Administrative Agent shall promptly deliver a copy of any such UCC financing
statements so filed to the Seller, provided that the Administrative Agent’s
failure to deliver such copy shall not effect the validity of such filing.
          (c) In connection with Seller’s transfer of its right, title and
interest in, to and under the Sale Agreements, from and after the occurrence of
an Amortization Event and during the continuation thereof, the Seller agrees
that the Administrative Agent shall have the right to enforce the Seller’s
rights and remedies under the Sale Agreements, to receive all amounts payable
thereunder or in connection therewith, to consent to amendments, modifications
or waivers thereof, and to direct, instruct or request any action thereunder,
but in each case without any obligation on the part of the Administrative Agent
or any Purchaser or any of its or their respective Affiliates to perform any of
the obligations of the Seller under the Sale Agreements. To the extent that the
Seller enforces the Seller’s rights and remedies under the Sale Agreements, from
and after the occurrence of an Amortization Event, and during the continuance
thereof, the Administrative Agent shall have the exclusive right to direct such
enforcement by the Seller.
          Section 13.15 Intercreditor Agreement. Each Purchaser hereby agrees to
be bound by the terms of, and the Administrative Agent’s covenants, agreements,
waivers and acknowledgements under, the Intercreditor Agreement.
[SIGNATURE PAGES FOLLOW]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.

                  CONSUMERS RECEIVABLES FUNDING II, LLC    
 
           
 
  By:   /s/ Laura L. Mountcastle    
 
  Name:  

Laura L. Mountcastle    
 
  Title:   President    
 
           
 
  Address:   Consumers Receivables Funding II, LLC
One Energy Plaza
Jackson, Michigan 49201
FAX: (517) 788-8233    
 
                CONSUMERS ENERGY COMPANY, as Servicer    
 
           
 
  By:   /s/ Laura L. Mountcastle    
 
  Name:  
 
Laura L. Mountcastle    
 
  Title:   Vice President    
 
           
 
  Address:   Consumers Energy Company
One Energy Plaza
Jackson, Michigan 49201
FAX: (517) 788-8233    

Signature Page to Receivables Purchase Agreement

 

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                  FALCON ASSET SECURITIZATION CORPORATION        
 
  By:   /s/ Leo V. Loughead    
 
     
 
      Leo V. Loughead, Authorized Signatory    
 
           
 
  Address:   c/o Bank One, NA (Main Office Chicago),    
 
      as Administrative Agent    
 
      Asset Backed Finance    
 
      Suite IL1-1729, 1-19    
 
      1 Bank One Plaza    
 
      Chicago, Illinois 60670-1729    
 
           
 
  FAX:   (312) 732-1844    

Signature Page to Receivables Purchase Agreement

 

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                  BANK ONE, NA (MAIN OFFICE CHICAGO), as a Financial        
Financial Institution and as Administrative Agent    
 
           
 
  By:   /s/ Leo V. Loughead    
 
  Name:  
 
Leo V. Loughead    
 
  Title:   Managing Director, Capital Markets    
 
           
 
  Address:   Bank One, NA (Main Office Chicago)    
 
      Asset Backed Finance    
 
      Suite IL1-1729, 1-19    
 
      1 Bank One Plaza    
 
      Chicago, Illinois 60670-1729    
 
           
 
  Fax:   (312) 732-3600    

Signature Page to Receivables Purchase Agreement

 

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EXHIBIT I
DEFINITIONS
          As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
          “Accrual Period” means each calendar month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial purchase hereunder to (and including) the last day of the calendar month
thereafter.
          “Administrative Agent” has the meaning set forth in the preamble to
this Agreement.
          “Adverse Claim” means a lien, security interest, financing statement,
charge or encumbrance, or other right or claim in, of or on any Person’s assets
or properties in favor of any other Person.
          “Affected Financial Institution” has the meaning specified in
Section 12.1(c).
          “Affiliate” means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or any Subsidiary of such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
stock, by contract or otherwise.
          “Aggregate Capital” means, at any time, the aggregate amount of
Capital of all Purchaser Interests outstanding on such date.
          “Aggregate Reduction” means any reduction to Aggregate Capital
pursuant to Section 1.3.
          “Aggregate Reserves” means, at any time, the sum of the Loss Reserve,
the Yield and Servicer Fee Reserve and the Dilution Reserve.
          “Aggregate Unpaids” means, at any time, an amount equal to the sum of
all Aggregate Capital and all other unpaid Obligations (whether due or accrued)
at such time.
          “Agreement” means this Receivables Purchase Agreement, as it may be
amended or modified and in effect from time to time.
          “Amortization Date” means the earliest to occur of (i) the day on
which any of the conditions precedent set forth in Section 6.2 are not
satisfied, (ii) the Business Day immediately

Exh I - 1

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prior to the occurrence of an Amortization Event set forth in Section 9.1(d),
(iii) the Business Day specified in a written notice from the Administrative
Agent following the occurrence of any other Amortization Event, (iv) the
Liquidity Termination Date and (v) the date which is at least fifteen
(15) Business Days after the Administrative Agent’s receipt of written notice
from Seller that it wishes to terminate the facility evidenced by this
Agreement, provided that any prepayment resulting from such declaration of the
Amortization Date shall be subject to the provisions of Section 2.1.
          “Amortization Event” has the meaning specified in Article IX.
          “Applicable Margin” has the meaning set forth in the Fee Letter.
          “Applicable Maximum Purchaser Interest” means the percentage as set
forth in the schedule below based upon the Monthly Report Coverage Period then
in effect.

      Monthly Report Coverage Period   Applicable Maximum Purchaser Interest
January
   95%
February
  92.5%  
March
    85%
April
    85%
May
   100%
June
   100%
July
   100%
August
    95%
September
    95%
October
   100%
November
   100%
December
   100%

          “Applicable Stress Factor” means, at any time, the amount set forth
below based on the Debt Rating of Consumers by each of S&P and Moody’s,
respectively; provided, however, that (a) if the ratings established or deemed
to have been established by S&P and Moody’s, respectively, fall within different
levels, the Applicable Stress Factor will be based on

Exh I - 2

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the lower of the two ratings and (b) if S&P or Moody’s (but not both) is then
rating Consumers, the Applicable Stress Factor will be based on the single
rating then in effect:

      Debt Rating by S&P/Moody’s   Applicable Stress Factor
Greater than or equal to BBB-/Baa3
    2.0
Less than BBB-/Baa3, but greater than or equal to BB/Ba2
  2.25
Less than BB/Ba2 or unrated
    2.5

          “Applicable Unbilled Receivables Limit” means (i) at any time during a
Level One Enhancement Period, 50%, (ii) at any time during a Level Two
Enhancement Period, 35%, and (iii) at any time during a Level Three Enhancement
Period, 25%.
          “Assignment Agreement” has the meaning set forth in Section 12.1(b).
          “Bank One” means Bank One, NA (Main Office Chicago) in its individual
capacity and its successors.
          “Bank Rate” means, the LIBO Rate or the Prime Rate, as applicable,
with respect to each Purchaser Interest of the Financial Institutions and any
Purchaser Interest of Conduit, an undivided interest in which has been assigned
by Conduit to a Financial Institution pursuant to the Liquidity Agreement.
          “Billed Receivable” means a Receivable for which, as of the time of
determination, an invoice addressed to the Obligor thereof has been sent.
          “Broken Funding Costs” means for any Tranche Period or any tranche
period for Commercial Paper for any Purchaser Interest which: (i) has its
Capital reduced without compliance by Seller with the notice requirements
hereunder, (ii) does not become subject to an Aggregate Reduction following the
delivery of any Reduction Notice, or (iii) is assigned under the Liquidity
Agreement or terminated prior to the date on which it was originally scheduled
to end, including by the written notice of Seller that it wishes to terminate
the facility evidenced by this Agreement; an amount equal to the excess, if any,
of (A) the Yield that would have accrued during the remainder of the Tranche
Period or the tranche period for Commercial Paper determined by the
Administrative Agent to relate to such Purchaser Interest (as applicable)
subsequent to the date of such reduction, assignment or termination (or in
respect of clause (ii) above, the date such Aggregate Reduction was designated
to occur pursuant to the Reduction Notice) of the Capital of such Purchaser
Interest if such reduction, assignment or termination had not occurred or such
Reduction Notice had not been delivered, over (B) the sum of (x) to the extent
all or a portion of such Capital is allocated to another Purchaser Interest, the
amount of Yield actually accrued during the remainder of such period on such
Capital for the new Purchaser Interest, and (y) to the extent such Capital is
not allocated to another Purchaser Interest, the income, if any, actually
received during the remainder of such period by the holder

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of such Purchaser Interest from investing the portion of such Capital not so
allocated. In the event that the amount referred to in clause (B) exceeds the
amount referred to in clause (A), the relevant Purchaser or Purchasers agree to
pay to Seller the amount of such excess. All Broken Funding Costs shall be due
and payable hereunder upon demand.
          “Business Day” means any day on which banks are not authorized or
required to close in New York, New York or Chicago, Illinois and The Depository
Trust Company of New York is open for business, and, if the applicable Business
Day relates to any computation or payment to be made with respect to the LIBO
Rate, any day on which dealings in dollar deposits are carried on in the London
interbank market.
          “Capital” of any Purchaser Interest means, at any time, (A) the
Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate
amount of Collections and other payments received by the Administrative Agent
which in each case are applied to reduce such Capital in accordance with the
terms and conditions of this Agreement; provided that such Capital shall be
restored (in accordance with Section 2.6) in the amount of any Collections or
other payments so received and applied if at any time the distribution of such
Collections or payments are rescinded, returned or refunded for any reason.
          “Capital Pro Rata Share” means, for any Purchaser at any time, the
amount of Capital allocated to the Purchaser Interests of such Purchaser at such
time divided by the Aggregate Capital at such time.
          “Change of Control” means (a) with respect to Originator, the
acquisition by any Person, or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of 50% or more of
the outstanding shares of voting stock of Originator and (b) with respect to
Seller or CRF I, Originator’s failure to own, directly or indirectly, 100% of
the issued and outstanding equity of the Seller.
          “Charged-Off Receivable” means a Receivable which, consistent with the
Credit and Collection Policy, would be written off Seller’s books as
uncollectible.
          “Closing Date” means May 22, 2003.
          “CMS Entity” has the meaning set forth in Section 7.1(i).
          “Collection Account” means each concentration account, depositary
account, lock-box account or similar account in which any Collections are
collected or deposited and which is listed on Exhibit IV.
          “Collection Account Agreement” means an agreement substantially in the
form of Exhibit VI among CRF I, Servicer, Seller, the Administrative Agent and a
Collection Bank.
          “Collection Bank” means, at any time, any of the banks holding one or
more Collection Accounts.

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          “Collection Notice” means a notice, in substantially the form of Annex
A to Exhibit VI, from the Administrative Agent to a Collection Bank.
          “Collections” means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all yield, Finance Charges or other related amounts accruing
in respect thereof and all cash proceeds of Related Security with respect to
such Receivable.
          “Commercial Paper” means promissory notes of Conduit issued by Conduit
in the commercial paper market.
          “Commitment” means, for each Financial Institution, the commitment of
such Financial Institution to purchase Purchaser Interests from (i) Seller and
(ii) Conduit, in an amount not to exceed (i) in the aggregate, the amount set
forth opposite such Financial Institution’s name on Schedule A to this
Agreement, as such amount may be modified in accordance with the terms hereof
and (ii) with respect to any individual purchase hereunder, its Pro Rata Share
of the Purchase Price therefor.
          “Conduit” has the meaning set forth in the preamble to this Agreement.
          “Concentration Limit” means, at any time, for any Obligor, 2% of the
Outstanding Balance of all Eligible Receivables, or such other amount (a
“Special Concentration Limit”) for such Obligor designated by the Administrative
Agent; provided, that in the case of an Obligor and any Affiliate of such
Obligor, the Concentration Limit shall be calculated as if such Obligor and such
Affiliate are one Obligor; and provided, further, that Conduit or the Required
Financial Institutions may, upon not less than three Business Days’ notice to
Seller, cancel any Special Concentration Limit.
          “Consumers” means Consumers Energy Company, a Michigan corporation.
          “Contingent Obligation” of a Person means any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.
          “Contract” means, with respect to any Receivable, the invoices and any
instruments, agreements or other writings pursuant to which such Receivable
arises or which evidences such Receivable.
          “CP Rate” means, for any Accrual Period for any Purchaser Interest
owned by Conduit if and to the extent Conduit funds the Purchase or maintenance
of its Purchaser Interest by the issuance of commercial paper notes during such
Settlement Period, the per annum rate that reflects, for each day during such
Settlement Period, the sum of (i) discount or yield accrued on Pooled Commercial
Paper on such day, plus (ii) any and all accrued commissions in respect

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of placement agents and Commercial Paper dealers, and issuing and paying agent
fees incurred, in respect of such Pooled Commercial Paper for such day, plus
(iii) other costs associated with funding small or odd-lot amounts with respect
to all receivable purchase facilities which are funded by Pooled Commercial
Paper for such day, minus (iv) any accrual of income net of expenses received on
such day from investment of collections received under all receivable purchase
facilities funded substantially with Pooled Commercial Paper, minus (v) any
payment received on such day net of expenses in respect of Broken Funding Costs
related to the prepayment of any Purchaser Interest of Conduit pursuant to the
terms of any receivable purchase facilities funded substantially with Pooled
Commercial Paper. In addition to the foregoing costs, if Seller shall request
any Incremental Purchase during any period of time determined by the
Administrative Agent in its sole discretion to result in an incrementally higher
CP Rate applicable to such additional Purchase, the Capital associated with any
such Incremental Purchase shall, during such period, be deemed to be funded by
Conduit in a special pool (which may include capital associated with other
receivable purchase facilities) for purposes of determining such higher CP Rate
applicable only to such special pool and charged each day during such period
against such Capital.
          “Credit and Collection Policy” means Originator’s credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in Exhibit VIII hereto, as modified from time
to time in accordance with this Agreement, or as required under regulatory
directive.
          “CRF I” means Consumers Receivables Funding, LLC, a Delaware limited
liability company.
          “CRF I Agreement” means that certain Sale Agreement dated May 1, 2003
between CRF I and Seller, as the same may be amended, restated or otherwise
modified from time to time.
          “Customer Deposits” means, at any time, the aggregate amount of cash
deposits held by Consumers against Obligors’ accounts.
          “Days Sales Outstanding Ratio” means, for any Accrual Period, (i) the
aggregate Outstanding Balance of all Receivables as of the last day of the
Accrual Period ending one Accrual Period prior to such Accrual Period, divided
by (ii) the aggregate amount of Collections received during such Accrual Period,
multiplied by (iii) 30.
          “Debt Rating” means, at any time, the rating then assigned by S&P
and/or Moody’s to the applicable entity’s senior secured long-term debt
securities without third party credit enhancement.
          “Deemed Collections” means the aggregate of all amounts Seller shall
have been deemed to have received as a Collection of a Receivable. Seller shall
be deemed to have received a Collection of a Receivable to the extent that
(i) the Outstanding Balance of any such Receivable is either (x) reduced as a
result of any defective or rejected goods or services, any discount or any
adjustment or otherwise by Seller (other than cash Collections on account of

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such Receivable) or (y) reduced or canceled as a result of a setoff in respect
of any claim by any Person (whether such claim arises out of the same or a
related transaction or an unrelated transaction) or (ii) any of the
representations or warranties in Article V are no longer true with respect to
such Receivable.
          “Default Fee” means with respect to any amount due and payable by
Seller (or required to be deposited by Servicer) in respect of any Aggregate
Unpaids, an amount equal to the greater of (i) $1000 and (ii) interest on any
such unpaid Aggregate Unpaids at a rate per annum equal to 2% above the Prime
Rate.
          “Default Ratio” means, for any Accrual Period, a ratio (expressed as a
percentage) equal to (i) the aggregate Outstanding Balance of all Billed
Receivables which are more than sixty (60) and less than ninety-one (91) days
past due as of the last day of the most recently ended Accrual Period plus all
Charged-Off Receivables written off during such Accrual Period divided by
(ii) the aggregate Original Balance of all Receivables originated during the
Accrual Period which ended three Accrual Periods prior to such Accrual Period.
          “Delinquent Receivable” means a Billed Receivable as to which any
payment, or part thereof, remains unpaid for sixty-one (61) days or more from
the original due date for such payment.
          “Dilution Horizon Factor” means, at any time, a fraction, the
numerator of which equals the sum of (a) the aggregate Original Balance of all
Billed Receivables originated during the Accrual Period ending immediately prior
to the last day of such Accrual Period and (b) the aggregate Original Balance of
Unbilled Receivables as of the end of such Accrual Period, and the denominator
of which equals the Net Receivables Balance as of the end of the most recently
ended Accrual Period.
          “Dilution Percentage” means as of any date of determination the
greater of (i) 6% and (ii) a percentage calculated in accordance with the
following formula:
          DP = [(ASF x ADR) + [(HDR — ADR) x (HDR/ADR)]] x DHF
          where:

             
 
  DP   =   the Dilution Percentage;    
 
  ADR   =   the average of the monthly Dilution Ratios occurring during the 12
most recent Accrual Periods;    
 
  ASF   =   Applicable Stress Factor;    
 
  HDR   =   the highest Dilution Ratio occurring during the 12 most recent
Accrual Periods; and    
 
  DHF   =   the Dilution Horizon Factor at such time.

          “Dilution Ratio” means, for any Accrual Period, a percentage equal to
(i) the aggregate amount of Dilutions which occurred during such Accrual Period
less the positive difference, if any, between (a) the aggregate amount of debit
adjustments which occurred during such Accrual Period and (b) the aggregate
amount of debit adjustments relating to electric

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wholesale customer sales during such Accrual Period, divided by (ii) the
aggregate Original Balance of all Receivables generated by the Originator during
such Accrual Period.
          “Dilution Reserve” means, at any time, an amount equal to the product
of (a) the Net Receivables Balance as of the close of business on such date,
times (b) the Dilution Percentage.
          “Dilutions” means, at any time or for any period, the aggregate amount
of reductions or cancellations described in clause (i) of the definition of
“Deemed Collections” provided, that for the month of March, 2002, “Dilutions”
shall mean $7,000,000.
          “Eligible Receivable” means, at any time, a Receivable:
     (i) which is not a Charged-Off Receivable or a Delinquent Receivable,
     (ii) which by its terms is due and payable within 30 days of the original
billing date therefor and has not had its payment terms extended,
     (iii) which is an “account” within the meaning of Section 9-102 of the UCC
of all applicable jurisdictions,
     (iv) which is denominated and payable only in United States dollars in the
United States,
     (v) the Obligor of which, if a natural person, maintains a service address
in the United States, or if a corporation or other business organization,
maintains a place of business in the United States,
     (vi) the Obligor of which is not an Affiliate of (i) any party hereto or
(ii) Originator,
     (vii) which arises under a Contract which, together with such Receivable,
is in full force and effect and constitutes the legal, valid and binding
obligation of the related Obligor enforceable against such Obligor in accordance
with its terms subject to no offset, rescission, counterclaim or other defense,
except as limited by bankruptcy, insolvency or other similar laws,
     (viii) which arises under a Contract which (A) does not require the Obligor
under such Contract to consent to the transfer, sale or assignment of the rights
to payment of Originator or any of its assignees under such Contract and
(B) does not contain a confidentiality provision that purports to restrict the
ability of any Purchaser to exercise its rights under this Agreement, including,
without limitation, its right to review the Contract,
     (ix) which arises under a Contract that contains an obligation to pay a
specified sum of money, contingent only upon the sale of goods, electricity or
gas or provision of services by Originator and not by any other person (in whole
or in part),

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     (x) which, if an Unbilled Receivable, has been included on a Monthly Report
as an Eligible Receivable during a period of not more than thirty-six
(36) consecutive calendar days,
     (xi) which, together with the Contract related thereto, does not contravene
any law, rule or regulation applicable thereto (including, without limitation,
any law, rule and regulation relating to truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection practices
and privacy) and with respect to which no part of the Contract related thereto
is in violation of any such law, rule or regulation,
     (xii) which satisfies in all material respects all applicable requirements
of the applicable Credit and Collection Policy,
     (xiii) which was originated in the ordinary course of Originator’s
business,
     (xiv) which is not subject to any right of rescission, set-off,
counterclaim, any other defense (including defenses arising out of violations of
usury laws) of the applicable Obligor against Originator or CRF I (it being
understood that only a portion of a Receivable equal to the amount of such
partial rescission, set-off, counterclaim or defense, if the amount of such
partial rescission, set-off, counterclaim or defense can be quantified, shall be
deemed not to be an Eligible Receivable) or any other Adverse Claim, and the
Obligor thereon holds no right as against Originator or CRF I,
     (xv) as to which Originator has satisfied and fully performed all
obligations on its part with respect to such Receivable required to be fulfilled
by it, and no further action is required to be performed by any Person with
respect thereto other than payment thereon by the applicable Obligor, and
     (xvi) all right, title and interest to and in which has been validly
transferred by the applicable Transferor directly to Seller under and in
accordance with the applicable Sale Agreement, and Seller has good and
marketable title thereto free and clear of any Adverse Claim.
          “EMPP Receivable” means a Receivable arising under an Obligor’s
account which is subject to a balanced or levelized payment plan of Originator.
          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
          “Excess Government Receivables Amount” means at any time, an amount
equal to the positive difference, if any, between (i) the aggregate Outstanding
Balance of the Eligible Receivables consisting of Government Receivables at such
time and (ii) the Government Receivable Concentration Limit at such time.
          “Excess Non-Energy Receivables Amount” means at any time, an amount
equal to the positive difference, if any, between (i) the sum of (A) the
aggregate Original Balance of the Eligible Receivables consisting of Non-Energy
Receivables originated during the

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immediately preceding Accrual Period plus (B), without duplication of the amount
set forth in clause (A), the aggregate amount of Finance Charges then due and
owing with respect to all Eligible Receivables at such time and (ii) the
Non-Energy Receivables Limit at such time.
          “Excess Unbilled Receivables Amount” means at any time, an amount
equal to the positive difference, if any, between (i) the aggregate Outstanding
Balance of the Eligible Receivables consisting of Unbilled Receivables as of the
last day of the most recently ended Accrual Period and (ii) the product of
(a) the Applicable Unbilled Receivables Limit at such time, multiplied by
(b) the aggregate Outstanding Balance of all Receivables as of the last day of
the most recently ended Accrual Period.
          “Excess WPP Receivables Amount” means, at any time, an amount equal to
the positive difference, if any, between (i) the aggregate Outstanding Balance
of the Eligible Receivables consisting of WPP Receivables as of the last day of
the most recently ended Accrual Period and (ii) the WPP Limit at such time.
          “Federal Bankruptcy Code” means Title 11 of the United States Code
entitled “Bankruptcy,” as amended and any successor statute thereto.
          “Federal Funds Effective Rate” means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 11:30 a.m. (New York time) for such day on such transactions
received by Bank One from three federal funds brokers of recognized standing
selected by it.
          “Fee Letter” means that certain letter agreement dated as of the date
hereof among Seller, the Conduit and the Administrative Agent, as it may be
amended or modified and in effect from time to time.
          “Finance Charges” means, with respect to a Contract, any finance,
interest, late payment charges or similar charges owing by an Obligor pursuant
to such Contract.
          “Financial Institutions” has the meaning set forth in the preamble in
this Agreement.
          “Financing Order” means the financing order issued by the Michigan
Public Service Commission on October 24, 2000, as amended.
          “Funding Agreement” means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Conduit
(including the Liquidity Agreement).

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          “Funding Source” means (i) any Financial Institution or (ii) any
insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Conduit.
          “GAAP” means generally accepted accounting principles in the United
States of America as in effect on the date hereof, applied on a basis consistent
with those used in the preparation of the financial statements of Consumers for
the period ending December 31, 2002 (except, for purposes of the financial
statements required to be delivered pursuant to Sections 7.1, for changes
concurred in by the Consumers’ independent public accountants).
          “Government Receivable” means a Receivable the Obligor of which is a
federal, state or local government, or an agency, branch, division, district or
other political subdivision thereof.
          “Government Receivable Concentration Limit” means, at any time, with
respect to Government Receivables that are otherwise Eligible Receivables, an
amount equal to the lesser of (A) $20,000,000 and (B) 5% of the aggregate
Outstanding Balance of all Eligible Receivables at such time.
          “Incremental Purchase” means a purchase of one or more Purchaser
Interests which increases the total outstanding Aggregate Capital hereunder.
          “Indebtedness” of a Person means such Person’s (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person’s business payable on terms customary in the trade),
(iii) obligations, whether or not assumed, secured by liens or payable out of
the proceeds or production from property now or hereafter owned or acquired by
such Person, (iv) obligations which are evidenced by notes, acceptances, or
other instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
          “Independent Manager” has the meaning specified in the Limited
Liability Company Agreement of the Seller.
          “Intercreditor Agreement” means the Intercreditor Agreement dated as
of May 22, 2003 among Bank One, NA (Main Office Chicago), Falcon Asset
Securitization Corporation, The Bank of New York, as trustee, Consumers Funding
LLC, Consumers Receivables Funding II, LLC and Consumers Energy Company.
          “Inventory Facility Intercreditor Agreement” means an intercreditor
agreement, in form and substance acceptable to the Administrative Agent, among
the Seller, Servicer, Administrative Agent and any financial institutions, or
agent thereof, providing to Consumers a credit facility secured by its
inventory.
          “Level One Enhancement Period” means any period during which
Consumers’ Debt Rating shall be BBB- or higher as rated by S&P and Baa3 or
higher as rated by Moody’s.

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          “Level Two Enhancement Period” means any period during which
Consumers’ Debt Rating shall be lower than BBB- as rated by S&P or Baa3 as rated
by Moody’s but higher than BB- by S&P and Ba3 by Moody’s.
          “Level Three Enhancement Period” means any period during which
Consumers’ Debt Rating shall be BB- or lower as rated by S&P or Ba3 or lower as
rated by Moody’s.
          “LIBO Rate” means the rate per annum equal to the sum of (i) (a) the
applicable British Bankers’ Association Interest Settlement Rate for deposits in
U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two
(2) Business Days prior to the first day of the relevant Tranche Period, and
having a maturity equal to such Tranche Period, provided that, (A) if Reuters
Screen FRBD is not available to the Administrative Agent for any reason, the
applicable LIBO Rate for the relevant Tranche Period shall instead be the
applicable British Bankers’ Association Interest Settlement Rate for deposits in
U.S. dollars as reported by any other generally recognized financial information
service as of 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Tranche Period, and having a maturity equal to such Tranche Period,
and (B) if no such British Bankers’ Association Interest Settlement Rate is
available to the Administrative Agent, the applicable LIBO Rate for the relevant
Tranche Period shall instead be the rate determined by the Administrative Agent
to be the rate at which Bank One offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of such Tranche
Period, in the approximate amount to be funded at the LIBO Rate and having a
maturity equal to such Tranche Period, divided by (b) one minus the maximum
aggregate reserve requirement (including all basic, supplemental, marginal or
other reserves) which is imposed against the Administrative Agent in respect of
Eurocurrency liabilities, as defined in Regulation D of the Board of Governors
of the Federal Reserve System as in effect from time to time (expressed as a
decimal), applicable to such Tranche Period plus (ii) the Applicable Margin. The
LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of 1%.
          “Liquidity Agreement” means the agreement entered into by Conduit with
the Financial Institutions in connection herewith for the purpose of providing
liquidity with respect to the Capital funded by Conduit under this Agreement.
          “Liquidity Termination Date” means May 20, 2004.
          “Lock-Box” means each postal box or code listed on Exhibit IV over
which the Administrative Agent has been granted control pursuant to a P.O. Box
Transfer Notice.
          “Loss Horizon Factor” means, at any time, a fraction, the numerator of
which equals the sum of (a) the aggregate Original Balance of all Billed
Receivables originated during the three Accrual Periods ending immediately prior
to the last day of the most recently ended Accrual Period and (b) the aggregate
Original Balance of Unbilled Receivables as of the last day of the most recently
ended Accrual Period, and the denominator of which equals the Net Receivables
Balance as of the end of the most recently ended Accrual Period.

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          “Loss Percentage” means at any time the greater of (i) 8% and (ii) a
percentage calculated in accordance with the following formula:
               LP = ASF x LHF x LR
          where:

             
 
  ASF   =   Applicable Stress Factor;    
 
  LP   =   the Loss Percentage;    
 
  LHF   =   the Loss Horizon Factor; and    
 
  LR   =   the highest three month rolling average of the Loss Ratios occurring
during the 12 most recent Accrual Periods.

          “Loss Ratio” means, at any time, a ratio (expressed as a percentage)
equal to (i) the product of (a) the aggregate Outstanding Balance of all Billed
Receivables which are more than sixty (60) and less than ninety-one (91) days
past due as of the last day of the most recently ended Accrual Period plus all
Charged-Off Receivables written off during such Accrual Period and (b) 0.5
divided by (ii) the aggregate Original Balance of all Receivables originated
during the Accrual Period which ended three Accrual Periods prior to such
Accrual Period.
          “Loss Reserve” means, at any time, an amount equal to the Loss
Percentage multiplied by the Net Receivables Balance as of the close of business
of the Servicer on such date.
          “Manager” has the meaning specified in the Limited Liability Company
Agreement of the Seller.
          “Material Adverse Effect” means a material adverse effect on (i) the
financial condition or operations of either Seller Party and its Subsidiaries,
taken as a whole (except that a downgrade in any debt rating of either Seller
Party or any of its Subsidiaries shall not by itself have any such material
adverse effect), (ii) the ability of any Seller Party to perform its obligations
under this Agreement or any other Transaction Document, (iii) the legality,
validity or enforceability of this Agreement or any other Transaction Document,
(iv) any Purchaser’s interest in the Receivables generally or in any significant
portion of the Receivables, the Related Security or the Collections with respect
thereto, or (v) the collectibility of the Receivables generally or of any
material portion of the Receivables.
          “Monthly Report Coverage Period” means a period of time commencing on
each due date for a Monthly Report and ending on the day occurring immediately
prior to the due date for the next Monthly Report.
          “Monthly Report” means a report, in substantially the form of
Exhibit IX hereto (appropriately completed), furnished by the Servicer to the
Administrative Agent pursuant to Section 8.5.
          “Moody’s” means Moody’s Investors Service, Inc.

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          “1945 Indenture” means that certain Indenture (as the same has been
amended, restated, supplemented or otherwise modified from time to time) dated
as of September 1, 1945 between Originator (formerly known as Consumers Power
Company) and JPMorgan Chase Bank (as successor to City Bank Farmers Trust
Company), as Trustee.
          “Non-Energy Receivable” means a Receivable arising from the sale of
goods other than electricity or gas.
          “Non-Energy Receivables Limit” means, at any time, with respect to
Non-Energy Receivables that are otherwise Eligible Receivables, an amount equal
to the lesser of (A) $8,000,000 and (B) 2% of the aggregate Outstanding Balance
of all Eligible Receivables at such time.
          “Net Receivables Balance” means, at any time, the aggregate
Outstanding Balance of all Eligible Receivables at such time, minus the sum
(without duplication) of (i) the aggregate amount by which the Outstanding
Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds
the Concentration Limit for such Obligor, (ii) the Excess Unbilled Receivables
Amount at such time, (iii) the aggregate Outstanding Balance of Unapplied Cash
and Credits at such time, (iv) the Customer Deposits as such time, (v) the
Unbilled Receivables Offset Amount at such time, (vi) the Excess Government
Receivables Amount at such time, (vii) the Excess Non-Energy Receivables Amount
at such time and (viii) the Excess WPP Receivables Amount at such time.
          “Non-Renewing Financial Institution” has the meaning set forth in
Section 12.3.
          “Obligations” shall have the meaning set forth in Section 2.1.
          “Obligor” means a Person obligated to make payments pursuant to a
Contract.
          “Original Balance” means, with respect to any Receivable, the
Outstanding Balance of such Receivable on the date it was originated.
          “Originator” means Consumers, in its capacity as seller under the
Receivables Sale Agreement.
          “Outstanding Balance” of any Receivable at any time means the then
outstanding principal balance thereof.
          “Participant” has the meaning set forth in Section 12.2.
          “Past Due Ratio” means, for any Accrual Period, (i) the aggregate
Outstanding Balance of all Receivables which are more than 60 days past due as
of the last day of such Accrual Period divided by (ii) the aggregate Outstanding
Balance of all Receivables.
          “Person” means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

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          “P.O. Box Transfer Notice” means an agreement substantially in the
form of Exhibit XI, or such other agreement in form and substance reasonably
acceptable to the Administrative Agent.
          “Pooled Commercial Paper” means Commercial Paper notes of Conduit
subject to any particular pooling arrangement by Conduit, but excluding
Commercial Paper issued by Conduit for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by Conduit.
          “Potential Amortization Event” means an event which, with the passage
of time or the giving of notice, or both, would constitute an Amortization
Event.
          “Prime Rate” means a per annum rate equal to the higher of (i) the
“prime rate” announced by the Administrative Agent from time to time, changing
when and as such rate changes or (ii) the Federal Funds Effective Rate plus
.50%.
          “Proposed Reduction Date” has the meaning set forth in Section 1.3.
          “Pro Rata Share” means, for each Financial Institution, a percentage
equal to (i) the Commitment of such Financial Institution, divided by (ii) the
aggregate amount of all Commitments of all Financial Institutions hereunder,
adjusted as necessary to give effect to any assignments pursuant to Article XII.
          “Purchase Limit” means $325,000,000, as such amount may be decreased
in accordance with Section 1.1(b).
          “Purchase Notice” has the meaning set forth in Section 1.2.
          “Purchase Price” means, with respect to any Incremental Purchase of a
Purchaser Interest, the amount paid to Seller for such Purchaser Interest which
shall not exceed the least of the amount requested by Seller in the applicable
Purchase Notice, the unused portion of the Purchase Limit on the applicable
purchase date and the excess, if any, of the Net Receivables Balance (less the
Aggregate Reserves) on the applicable purchase date over the aggregate
outstanding amount of Aggregate Capital determined as of the date of the most
recent Monthly Report, taking into account such proposed Incremental Purchase.
          “Purchasers” means Conduit and each Financial Institution.
          “Purchaser Interest” means, at any time, an undivided percentage
ownership interest (computed as set forth below) associated with a designated
amount of Capital, selected pursuant to the terms and conditions hereof in
(i) each Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:

Exh I - 15

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  C
 
   
 
  NRB — AR    

             
 
  where:        
 
           
 
  C   =   the Capital of such Purchaser Interest.
 
           
 
  AR   =   the Aggregate Reserves.
 
           
 
  NRB   =   the Net Receivables Balance.

Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
Business Day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
          “Purchasing Financial Institution” has the meaning set forth in
Section 12.1(b).
          “Receivable” means all indebtedness and other obligations owed to
Seller, CRF I or Originator (at the time it arises, and before giving effect to
any transfer or conveyance under the applicable Sale Agreement or hereunder) or
in which Seller, CRF I or Originator has a security interest or other interest,
including, without limitation, any indebtedness, obligation or interest
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of goods, electricity or gas or the
rendering of services by Originator, and further includes, without limitation,
the obligation to pay any Finance Charges with respect thereto. Indebtedness and
other rights and obligations arising from any one transaction, including,
without limitation, indebtedness and other rights and obligations represented by
an individual invoice, shall constitute a Receivable separate from a Receivable
consisting of the indebtedness and other rights and obligations arising from any
other transaction; provided, that any indebtedness, rights or obligations
referred to in the immediately preceding sentence shall be a Receivable
regardless of whether the account debtor, Seller, CRF I or Originator treats
such indebtedness, rights or obligations as a separate payment obligation.
Notwithstanding the foregoing, “Receivable” does not include (i) Transferred
Securitization Property or (ii) the books and records relating solely to the
Transferred Securitization Property; provided that the determination of what
constitutes collections of the Securitization Charges in respect of Transferred
Securitization Property shall be made in accordance with the allocation
methodology specified in Annex 2 to the Servicing Agreement.
          “Receivables Sale Agreement” means that certain Receivables Sale
Agreement, dated as of May 22, 2003, between Originator and Seller, as the same
may be amended, restated or otherwise modified from time to time.
          “Records” means, with respect to any Receivable, all Contracts and
other documents, books, records and other information (including, without
limitation, computer

Exh I - 16

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programs, tapes, disks, punch cards, data processing software and related
property and rights) relating to such Receivable, any Related Security therefor
and the related Obligor.
          “Reduction Notice” has the meaning set forth in Section 1.3.
          “Regulatory Change” has the meaning set forth in Section 10.3(a).
          “Reinvestment” has the meaning set forth in Section 2.2.
          “Related Security” means, with respect to any Receivable:
     (i) all of Seller’s interest in the inventory and goods (including returned
or repossessed inventory and goods), if any, the sale of which by Originator
gave rise to such Receivable, and all insurance contracts with respect thereto,
     (ii) all other security interests or liens and property subject thereto
from time to time, if any, purporting to secure payment of such Receivable,
whether pursuant to the Contract related to such Receivable or otherwise,
together with all financing statements and security agreements describing any
collateral securing such Receivable,
     (iii) all guaranties, letters of credit, letter of credit rights,
supporting obligations, insurance and other agreements or arrangements of
whatever character from time to time supporting or securing payment of such
Receivable whether pursuant to the Contract related to such Receivable or
otherwise,
     (iv) all service contracts and other contracts and agreements associated
with such Receivable,
     (v) all Records related to such Receivable,
     (vi) all of Seller’s right, title and interest in, to and under any
contracts or agreements providing for the servicing of such Receivable,
     (vii) all of Seller’s right, title and interest in, to and under the
applicable Sale Agreement in respect of such Receivable, and
     (viii) all proceeds of any of the foregoing.
          “Required Financial Institutions” means, at any time, Financial
Institutions with Commitments in excess of 51% of the Purchase Limit.
          “Required Notice Period” means the number of days required notice set
forth below applicable to the Aggregate Reduction indicated below:

Exh I - 17

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      Aggregate Reduction   Required Notice Period
<$50,000,000
  one Business Days
$50,000,000 to $99,999,999.99
  two Business Days
$100,000,000 to $250,000,000
  five Business Days
>$250,000,000
  ten Business Days

          “Responsible Officer” means, with respect to any Person, its chief
financial officer, the chief accounting officer, the senior vice
president-finance, the treasurer, an assistant treasurer, or corporate
controller, or any other officer of whose primary duties are similar to the
duties of any of the previously listed officers.
          “Restricted Junior Payment” means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of Seller now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock or in any junior class of stock of
Seller, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of Seller now or hereafter outstanding, (iii) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to the Subordinated Loans (as defined in the Receivables Sale
Agreement), (iv) any payment made to redeem, purchase, repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of Seller now or hereafter
outstanding, and (v) any payment of management fees by Seller (except for
reasonable management fees to Originator or its Affiliates in reimbursement of
actual management services performed).
          “S&P” means Standard & Poor’s Ratings Service, a division of The
McGraw-Hill Companies, Inc.
          “Sale Agreements” means the Receivables Sale Agreement and the CRF I
Agreement.
          “Securitization Charge” has the meaning specified in Appendix A to the
Servicing Agreement.
          “Securitization Charge Collections” has the meaning specified in
Appendix A to the Servicing Agreement.
          “Securitization Charge Sale Agreement” means the Sale Agreement dated
as of November 8, 2001 between Consumers and Consumers Funding LLC, as the same
may from time to time be amended, restated, supplemented or otherwise modified
with the consent of the Administrative Agent.
          “Securitization Property” means “securitization property” within the
meaning of the Michigan Customer Choice and Electricity Reliability Act, 2000 PA
141 and 2000 PA 142 as approved in the Financing Order.
          “Seller” has the meaning set forth in the preamble to this Agreement.

Exh I - 18

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          “Seller Parties” has the meaning set forth in the preamble to this
Agreement.
          “Servicer” means at any time the Person (which may be the
Administrative Agent) then authorized pursuant to Article VIII to service,
administer and collect Receivables.
          “Servicing Agreement” means the Servicing Agreement dated as of
November 8, 2001 between Consumers Funding LLC and Consumers Energy Company, as
the same may be amended and supplemented from time to time with the consent of
the Administrative Agent (to the extent such consent is required by the terms of
this Agreement).
          “Servicing Fee” has the meaning set forth in Section 8.6.
          “Settlement Date” means the date which is two (2) Business Days after
a Monthly Report is due.
          “Settlement Period” means (A) in respect of each Purchaser Interest
funded by Conduit, the immediately preceding Accrual Period, and (B) in respect
of each Purchaser Interest funded by the Financial Institutions, the entire
Tranche Period of such Purchaser Interest.
          “Specified Accounts” means each Collection Account identified as a
“Specified Account” on Exhibit IV and each other Collection Account designated
by the Administrative Agent as a Specified Account in accordance with
Section 7.1(j).
          “Subsidiary” of a Person means (i) any corporation more than 50% of
the outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, association, limited liability company, joint venture
or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a “Subsidiary”
shall mean a Subsidiary of Seller.
          “Supplement Indenture” means each Supplement Indenture made and
entered into by Originator (formerly known as Consumers Power Company) and
JPMorgan Chase Bank (as successor to City Bank Farmers Trust Company) under the
1945 Indenture.
          “Termination Date” has the meaning set forth in Section 2.3.
          “Terminating Financial Institution” has the meaning set forth in
Section 12.4.
          “Termination Percentage” has the meaning set forth in Section 2.3.
          “Terminating Tranche” has the meaning set forth in Section 2.3(b).
          “Tranche Period” means, with respect to any Purchaser Interest funded
by a Financial Institution, including any Purchaser Interest or undivided
interest in a Purchaser Interest assigned to a Financial Institution pursuant to
the Liquidity Agreement:

Exh I - 19

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          (a) if Yield for such Purchaser Interest is calculated on the basis of
the LIBO Rate, a period of one, two, three or six months, or such other period
as may be mutually agreeable to the Administrative Agent and Seller, commencing
on a Business Day selected by Seller or the Administrative Agent pursuant to
this Agreement. Such Tranche Period shall end on the day in the applicable
succeeding calendar month which corresponds numerically to the beginning day of
such Tranche Period, provided, however, that if there is no such numerically
corresponding day in such succeeding month, such Tranche Period shall end on the
last Business Day of such succeeding month; or
          (b) if Yield for such Purchaser Interest is calculated on the basis of
the Prime Rate, a period commencing on a Business Day selected by Seller and
agreed to by the Administrative Agent, provided no such period shall exceed one
month.
If any Tranche Period would end on a day which is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest which commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortization Date. The duration of each Tranche Period
which commences after the Amortization Date shall be of such duration as
selected by the Administrative Agent.
          “Transaction Documents” means, collectively, this Agreement, each
Purchase Notice, the Sale Agreements, the Intercreditor Agreement, each
Collection Account Agreement, each P.O. Box Transfer Notice, the Fee Letter, the
Subordinated Note (as defined in the Receivables Sale Agreement) and all other
instruments, documents and agreements executed and delivered in connection
herewith.
          “Transferred Securitization Property” has the meaning specified in
Appendix A to the Servicing Agreement.
          “Transferors” means the Originator and CRF I.
          “UCC” means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
          “Unapplied Cash and Credits” means, at any time, the aggregate amount
of Collections or other cash or credits then held by or for the account of the
Servicer, Originator, CRF I or the Seller in respect of the payment of Billed
Receivables, but not yet applied to the payment of such Receivables.
          “Unbilled Receivables” means Receivables in respect of which an
invoice addressed to the Obligor thereof has not been sent.
          “Unbilled Receivables Offset Amount” means, at any time, an amount
equal to the lesser of (a) the credit balance of all EMPP Receivables and WPP
Receivables as of the last

Exh I - 20

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day of the immediately preceding Accrual Period and (b) the product of (i) the
greater of (A) 7% and (B) the ratio of (1) the total number of Obligors whose
accounts are subject to a balanced or levelized payment plan or a payment plan
based on a percentage of such Obligor’s income (giving rise to EMPP Receivables
or WPP Receivables) as of the last day of the immediately preceding Accrual
Period divided by (2) the total number of Obligors as of the last day of the
immediately preceding Accrual Period multiplied by (ii) the aggregate amount of
Unbilled Receivables for such Accrual Period.
          “WPP Limit” means, (i) during any Level One Enhancement Period, the
lesser of (a) $8,000,000 and (b) the product of 2.0% multiplied by the aggregate
Outstanding Balance of all Eligible Receivables as of the last day of the most
recently ended Accrual Period and (ii) during any Level Two Enhancement Period
or Level Three Enhancement Period $0.
          “WPP Receivable” means a Receivable arising under an Obligor’s account
which is subject to a payment plan requiring payments based on a percentage of
such Obligor’s income.
          “Yield” means (a) for each respective Tranche Period relating to
Purchaser Interests funded by the Financial Institutions, including any
Purchaser Interests or undivided interest in a Purchaser Interest assigned to a
Financial Institution pursuant to the Liquidity Agreement, an amount equal to
the product of the applicable Bank Rate for each Purchaser Interest multiplied
by the Capital of such Purchaser Interest for each day elapsed during such
Tranche Period, annualized on a 360 day basis (or a 365 or 366 day basis, as
applicable, in the case of the Prime Rate), and (b) for each respective
Settlement Period relating to Purchaser Interests funded by Conduit, other than
a Purchaser Interest which, or an undivided interest in which, has been assigned
by Conduit to a Financial Institution pursuant to the Liquidity Agreement, an
amount equal to the product of the applicable CP Rate multiplied by the Capital
of such Purchaser Interest for each day elapsed during such Settlement Period,
annualized on a 360 day basis.
          “Yield and Servicer Fee Percentage” means, at any time, an amount
equal to the greater of (i) 1.5% and (ii) the ratio (expressed as a percentage)
equal to (a) the product of (x) 1.5, multiplied by (y) the Prime Rate (measured
as of the close of business as of the last Business Day of the preceding
calendar month) plus 2.0%, multiplied by (z) the highest three-month average
Days Sales Outstanding Ratio over the prior twelve (12) months, divided by
(b) 360.
          “Yield and Servicer Fee Reserve” means, at any time, an amount equal
to the product of (a) the Yield and Servicer Fee Percentage, multiplied by
(b) the Net Receivables Balance as of the close of business of the Servicer on
such date.
          “Yield Payment Date” means (A) the date each month which is two
(2) Business Days after the Monthly Report due in such month is due, and (B) the
last day of the relevant Tranche Period in respect of each Purchaser Interest
funded by the Financial Institutions.
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of New
York, and not specifically defined herein, are used herein as defined in such
Article 9.

Exh I - 21

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SCHEDULE C
FINANCIAL COVENANT DEFINITIONS
     “Agent” means Bank One in its capacity as administrative agent for the
Banks pursuant to the Credit Agreement, and not in its individual capacity as a
Bank, and any successor Agent appointed pursuant to the Credit Agreement.
     “Bank One” means Bank One, NA (Main Office — Chicago), in its individual
capacity, and its successors and assigns.
     “Banks” — means the financial institutions from time to time party to the
Credit Agreement as Banks thereunder.
     “Bonds” means, collectively, the Interest Bearing Bonds and the Zero Rate
Bonds.
     “Capital Lease” means any lease which has been or would be capitalized on
the books of the lessee in accordance with GAAP.
     “Code” means the Internal Revenue Code of 1986, as amended from time to
time.
     “Consolidated EBIT” means, for any period, Consolidated Net Income for such
period plus (i) to the extent deducted from revenues in determining such
Consolidated Net Income (without duplication), (a) Consolidated Interest
Expense, (b) expense for taxes paid or accrued, and (c) any non-cash write-offs
and write-downs contained in Consumers’ Consolidated Net Income, including,
without limitation, write-offs or write-downs related to the sale of assets,
impairment of assets and loss on contracts minus (ii) to the extent included in
such Consolidated Net Income, extraordinary gains realized other than in the
ordinary course of business, all calculated for Consumers and its Subsidiaries
on a consolidated basis in accordance with GAAP.
     “Consolidated Interest Expense” means with respect to any period for which
the amount thereof is to be determined, an amount equal to interest expense on
Debt, including payments in the nature of interest under Capital Leases but
excluding dividends paid on Hybrid Preferred Securities, all calculated for
Consumers and its Subsidiaries on a consolidated basis in accordance with GAAP.
     “Consolidated Net Income” means, with reference to any period, the net
income (or loss) of Consumers and its Subsidiaries calculated on a consolidated
basis for such period.
     “Consolidated Subsidiary” means any Subsidiary whose accounts are or are
required to be consolidated with the accounts of Consumers in accordance with
GAAP.
     “Consumers” means Consumers Energy Company, a Michigan corporation.

Sch. C-1

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     “Credit Agreement” means that certain Credit Agreement, dated as of
March 27, 2003 among Consumers, the financial institutions from time to time
party thereto as “Banks” and Bank One, as Agent.
     “Credit Documents” means the Credit Agreement, the Facility LC
Applications, the Supplemental Indenture and the Bonds.
     “Debt” means, with respect to any Person, and without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all indebtedness of such
Person for the deferred purchase price of property or services (other than trade
accounts payable arising in the ordinary course of business which are not
overdue), (c) all Unfunded Vested Liabilities of such Person (if such Person is
not Consumers, determined in a manner analogous to that of determining Unfunded
Vested Liabilities of Consumers), (d) all obligations of such Person arising
under acceptance facilities, (e) all obligations of such Person as lessee under
Capital Leases, (f) all obligations of such Person arising under any interest
rate swap, “cap”, “collar” or other hedging agreement; provided that for
purposes of the calculation of Debt for this clause (f) only, the actual amount
of Debt of such Person shall be determined on a net basis to the extent such
agreements permit such amounts to be calculated on a net basis, and (g) all
guaranties, endorsements (other than for collection in the ordinary course of
business) and other contingent obligations of such Person to assure a creditor
against loss (whether by the purchase of goods or services, the provision of
funds for payment, the supply of funds to invest in any Person or otherwise) in
respect of indebtedness or obligations of any other Person of the kinds referred
to in clauses (a) through (f) above.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
     “ERISA Affiliate” means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Consumers or is under common control (within the
meaning of Section 414(c) of the Code) with Consumers.
     “Facility LC” — a standby or commercial letter of credit issued pursuant to
Article III of the Credit Agreement.
     “Facility LC Application” — each application agreement executed and
delivered by Consumers in respect of a Facility LC.
     “First Mortgage Bonds” means bonds issued by Consumers pursuant to the
Indenture.
     “GAAP” means generally accepted accounting principles in the United States
of America as in effect on the date hereof, applied on a basis consistent with
those used in the preparation of the financial statements referred to in the
Credit Agreement (except, for purposes of the annual and quarterly financial
statements required to be delivered pursuant to the Credit Agreement, for
changes concurred in by Consumers’ independent public accountants).

Sch. C-2

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     “Hybrid Preferred Securities” means any preferred securities issued by a
Hybrid Preferred Securities Subsidiary, where such preferred securities have the
following characteristics:
     (i) such Hybrid Preferred Securities Subsidiary lends substantially all of
the proceeds from the issuance of such preferred securities to Consumers or a
wholly-owned direct or indirect Subsidiary of Consumers in exchange for Junior
Subordinated Debt issued by Consumers or such wholly-owned direct or indirect
Subsidiary, respectively;
     (ii) such preferred securities contain terms providing for the deferral of
interest payments corresponding to provisions providing for the deferral of
interest payments on the Junior Subordinated Debt; and
     (iii) Consumers or a wholly-owned direct or indirect Subsidiary of
Consumers (as the case may be) makes periodic interest payments on the Junior
Subordinated Debt, which interest payments are in turn used by the Hybrid
Preferred Securities Subsidiary to make corresponding payments to the holders of
the preferred securities.
     “Hybrid Preferred Securities Subsidiary” means any Delaware business trust
(or similar entity) (i) all of the common equity interest of which is owned
(either directly or indirectly through one or more wholly-owned Subsidiaries of
Consumers) at all times by Consumers or a wholly-owned direct or indirect
Subsidiary of Consumers, (ii) that has been formed for the purpose of issuing
Hybrid Preferred Securities and (iii) substantially all of the assets of which
consist at all times solely of Junior Subordinated Debt issued by Consumers or a
wholly-owned direct or indirect Subsidiary of Consumers (as the case may be) and
payments made from time to time on such Junior Subordinated Debt.
     “Indenture” means the Indenture, dated as of September 1, 1945, as
supplemented and amended from time to time, from Consumers to JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as successor Trustee.
     “Interest Bearing Bonds” means a series of interest-bearing First Mortgage
Bonds created under the Supplemental Indenture issued in favor of, and in form
and substance satisfactory to, the Agent.
     “Junior Subordinated Debt” means any unsecured Debt of Consumers or a
Subsidiary of Consumers (i) issued in exchange for the proceeds of Hybrid
Preferred Securities and (ii) subordinated to the rights of the Banks hereunder
and under the other Credit Documents pursuant to terms of subordination
substantially similar to those set forth in Exhibit E to the Credit Agreement,
or pursuant to other terms and conditions satisfactory to the Majority Banks.
     “Majority Banks” means, as of any date of determination, Banks in the
aggregate having more than 50% of the aggregate commitments under the Credit
Agreement as of such date or, if the aggregate commitments have been terminated,
Banks in the aggregate holding more than 50% of the aggregate unpaid principal
amount of outstanding credit exposure as of such date.

Sch. C-3

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     “Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA.
     “Net Proceeds” means, with respect to any sale or issuance of securities or
incurrence of Debt by any Person, the excess of (i) the gross cash proceeds
received by or on behalf of such Person in respect of such sale, issuance or
incurrence (as the case may be) over (ii) customary underwriting commissions,
auditing and legal fees, printing costs, rating agency fees and other customary
and reasonable fees and expenses incurred by such Person in connection
therewith.
     “Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.
     “Plan” means any employee benefit plan (other than a Multiemployer Plan)
maintained for employees of Consumers or any ERISA Affiliate and covered by
Title IV of ERISA.
     “Securitized Bonds” shall mean any nonrecourse bonds or similar
asset-backed securities issued by a special-purpose Subsidiary of Consumers
which are payable solely from specialized charges authorized by the utility
commission of the relevant state in connection with the recovery of (x) stranded
regulatory costs, (y) stranded clean air and pension costs and (z) other
“Qualified Costs” (as defined in M.C.L. §460.10h(g)) authorized to be
securitized by the Michigan Public Service Commission.
     “Single Employer Plan” means a Plan maintained by Consumers or any ERISA
Affiliate for employees of Consumers or any ERISA Affiliate.
     “Subsidiary” means, as to any Person, any corporation or other entity of
which at least a majority of the securities or other ownership interests having
ordinary voting power (absolutely or contingently) for the election of directors
or other Persons performing similar functions are at the time owned directly or
indirectly by such Person.
     “Supplemental Indenture” means a supplemental indenture substantially in
the form set forth in the Exhibits to the Credit Agreement.
     “Total Consolidated Capitalization” means, at any date of determination,
the sum of (a) Total Consolidated Debt, (b) equity of the common stockholders of
Consumers, (c) equity of the preference stockholders of Consumers and (d) equity
of the preferred stockholders of Consumers, in each case determined at such
date.
     “Total Consolidated Debt” means, at any date of determination, the
aggregate Debt of Consumers and its Consolidated Subsidiaries; provided that
Total Consolidated Debt shall exclude (i) the principal amount of any
Securitized Bonds, (ii) any Junior Subordinated Debt owned by any Hybrid
Preferred Securities Subsidiary, (iii) any guaranty by Consumers of payments
with respect to any Hybrid Preferred Securities, provided that such guaranty is
subordinated to the rights of the Banks hereunder and under the other Credit
Documents pursuant to terms of subordination substantially similar to those set
forth in Exhibit F to the Credit Agreement, or pursuant to other terms and
conditions satisfactory to the Majority Banks, (iv)

Sch. C-4

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such percentage of the Net Proceeds from any issuance of hybrid debt/equity
securities (other than Junior Subordinated Debt and Hybrid Preferred Securities)
by Consumers or any Consolidated Subsidiary as shall be agreed to be deemed
equity by the Agent and Consumers prior to the issuance thereof (which
determination shall be based on, among other things, the treatment (if any)
given to such securities by the applicable rating agencies).
     “Unfunded Vested Liabilities” means, (i) in the case of Single Employer
Plans, the amount (if any) by which the present value of all vested
nonforfeitable benefits under such Plan exceeds the fair market value of all
Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, and (ii) in the case of Multiemployer
Plans, the withdrawal liability of Consumers and its ERISA Affiliates.
     “Zero Rate Bonds” means a series of zero coupon First Mortgage Bonds
created under the Supplemental Indenture issued in favor of, and in form and
substance satisfactory to, the Agent.

Sch. C-5

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TABLE OF CONTENTS
(continued)

              Page  
ARTICLE I
       
PURCHASE ARRANGEMENTS
    1  
 
       
Section 1.1 Purchase Facility
    1  
Section 1.2 Increases
    2  
Section 1.3 Decreases
    2  
Section 1.4 Payment Requirements
    2  
 
       
ARTICLE II
       
PAYMENTS AND COLLECTIONS
    3  
 
       
Section 2.1 Payments
    3  
Section 2.2 Collections Prior to Amortization
    3  
Section 2.3 Terminating Financial Institutions
    5  
Section 2.4 Collections Following Amortization
    5  
Section 2.5 Application of Collections
    5  
Section 2.6 Payment Rescission
    6  
Section 2.7 Maximum Purchaser Interests
    6  
Section 2.8 Clean Up Call
    6  
Section 2.9 Payment Allocations
    6  
 
       
ARTICLE III
       
COMPANY FUNDING
    7  
 
       
Section 3.1 Yield
    7  
Section 3.2 Payments
    7  
Section 3.3 Calculation of Yield
    7  
 
       
ARTICLE IV
       
FINANCIAL INSTITUTION FUNDING
    7  
 
       
Section 4.1 Financial Institution Funding
    7  
Section 4.2 Yield Payments
    7  
Section 4.3 Selection and Continuation of Tranche Periods
    7  
Section 4.4 Financial Institution Bank Rates
    8  
Section 4.5 Suspension of the LIBO Rate
    8  
Section 4.6 Liquidity Agreement Fundings
    9  
 
       
ARTICLE V
       
REPRESENTATIONS AND WARRANTIES
    9  
 
       
Section 5.1 Representations and Warranties of The Seller Parties
    9  

Page vi

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              Page  
Section 5.2 Financial Institution Representations and Warranties
    13  
 
       
ARTICLE VI
       
CONDITIONS OF PURCHASES
    13  
 
       
Section 6.1 Conditions Precedent to Initial Incremental Purchase
    13  
Section 6.2 Conditions Precedent to All Purchases and Reinvestments
    14  
 
       
ARTICLE VII
       
COVENANTS
    15  
 
       
Section 7.1 Affirmative Covenants of The Seller Parties
    15  
Section 7.2 Negative Covenants of the Seller Parties
    23  
 
       
ARTICLE VIII
       
ADMINISTRATION AND COLLECTION
    25  
 
       
Section 8.1 Designation of Servicer
    25  
Section 8.2 Duties of Servicer
    26  
Section 8.3 Collection Notices
    27  
Section 8.4 Responsibilities of Seller
    27  
Section 8.5 Reports
    28  
Section 8.6 Servicing Fees
    28  
 
       
ARTICLE IX
       
AMORTIZATION EVENTS
    28  
 
       
Section 9.1 Amortization Events
    28  
Section 9.2 Remedies
    30  
 
       
ARTICLE X
       
INDEMNIFICATION
    31  
 
       
Section 10.1 Indemnities by the Seller
    31  
Section 10.2 Indemnities by the Servicer
    33  
Section 10.3 Increased Cost and Reduced Return
    34  
Section 10.4 Other Costs and Expenses
    35  
 
       
ARTICLE XI
       
THE AGENT
    35  
 
       
Section 11.1 Authorization and Action
    35  
Section 11.2 Delegation of Duties
    36  
Section 11.3 Exculpatory Provisions
    36  
Section 11.4 Reliance by Administrative Agent
    36  
Section 11.5 Non-Reliance on Administrative Agent and Other Purchasers
    36  
Section 11.6 Reimbursement and Indemnification
    37  
Section 11.7 Administrative Agent in its Individual Capacity
    37  
Section 11.8 Successor Administrative Agent
    37  

Sch. C-vii

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              Page  
ARTICLE XII
       
ASSIGNMENTS; PARTICIPATIONS
    38  
 
       
Section 12.1 Assignments
    38  
Section 12.2 Participations
    39  
Section 12.3 Extension of Liquidity Termination Date
    39  
Section 12.4 Terminating Financial Institutions
    40  
 
       
ARTICLE XIII
       
MISCELLANEOUS
    40  
 
       
Section 13.1 Waivers and Amendments
    40  
Section 13.2 Notices
    41  
Section 13.3 Ratable Payments
    42  
Section 13.4 Protection of Ownership Interests of the Purchasers
    42  
Section 13.5 Confidentiality
    42  
Section 13.6 Bankruptcy Petition
    43  
Section 13.7 Limitation of Liability
    43  
Section 13.8 CHOICE OF LAW
    44  
Section 13.9 CONSENT TO JURISDICTION
    44  
Section 13.10 WAIVER OF JURY TRIAL
    44  
Section 13.11 Integration; Binding Effect; Survival of Terms
    45  
Section 13.12 Counterparts; Severability; Section References
    45  
Section 13.13 Bank One Roles
    45  
Section 13.14 Characterization
    45  
Section 13.15 Intercreditor Agreement
    46  
 
       

          Exhibits and Schedules
 
  Exhibit I   Definitions
 
  Exhibit II   Form of Purchase Notice
 
  Exhibit III   Places of Business of the Seller Parties; Locations of Records;
Federal Employer Identification Number(s)
 
  Exhibit IV   Names of Collection Banks; Collection Accounts; Lock-Boxes;
Specified Accounts
 
  Exhibit V   Form of Compliance Certificate
 
  Exhibit VI   Form of Collection Account Agreement
 
  Exhibit VII   Form of Assignment Agreement
 
  Exhibit VIII   Credit and Collection Policy
 
  Exhibit IX   Form of Monthly Report
 
  Exhibit X   Form of Reduction Notice
 
  Exhibit XI   Form of P.O. Box Transfer Notice
 
       
 
  Schedule A   Commitments
 
  Schedule B   Closing Documents
 
  Schedule C   Financial Covenant Definitions

Sch. C-viii

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EXECUTION COPY
AMENDMENT NO. 1
to
RECEIVABLES PURCHASE AGREEMENT
Dated as of August 18, 2003
          THIS AMENDMENT NO. 1 (“Amendment”) is entered into as of August 18,
2003 by and among Consumers Receivables Funding II, LLC, a Delaware limited
liability company (“Seller”). Consumers Energy Company, a Michigan corporation
(“Servicer”), as initial Servicer, the entities parties hereto as “Financial
Institutions”, Falcon Asset Securitization Corporation (“Conduit”) and Bank One,
NA (Main Office Chicago), as Administrative Agent (together with its successors
and assigns, the “Administrative Agent”).
PRELIMINARY STATEMENT
          A. Seller, Servicer, Conduit, the Financial Institutions and the
Administrative Agent are parties to that certain Receivables Purchase Agreement
dated as of May 22, 2003 (as the same may be further amended, restated,
supplemented or otherwise modified from time to time, the (“Purchase
Agreement”). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Purchase Agreement.
          B. Seller, Servicer, Conduit, the Financial Institutions and the
Administrative Agent have agreed to amend the Purchase Agreement on the terms
and subject to the conditions hereinafter set forth.
          NOW, THEREFORE, in consideration of the premises set forth above, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
          Section 1. Amendments. Effective as of the date hereof and subject to
the satisfaction of the conditions precedent set forth in Section 2 below, the
Purchase Agreement is hereby amended as follows:
          (a) Article XIII of the Purchase Agreement is hereby amended to add
the following Section 13.16 after Section 13.15:
     Section 13.16 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. If any changes in
generally accepted accounting principles are hereafter required or permitted and
are adopted by Consumers or any of its Subsidiaries, or Consumers or any of its
Subsidiaries shall change its application of generally accepted accounting
principles with respect to any Off-Balance Sheet Liabilities, in each case with
the agreement of its independent certified public accountants, and such changes
result in a change in the method of calculation of any of the financial
covenants, tests, restrictions or standards herein or in the related definitions
or terms used therein (“Accounting Changes”), the parties hereto agree, at
Consumers’ request, to enter into negotiations, in good faith, in order to amend
such provisions in a credit

 

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neutral manner so as to reflect equitably such changes with the desired result
that the criteria for evaluating Consumers and its Subsidiaries’ financial
condition shall be the same after such changes as if such changes had not been
made; provided, however, until such provisions are amended in a manner
reasonably satisfactory to the Administrative Agent and the Purchasers, no
Accounting Change shall be given effect in such calculations. In the event such
amendment is entered into, all references in this Agreement to GAAP shall mean
generally accepted accounting principles as of the date of such amendment.
          (b) Exhibit I to the Purchase Agreement is amended to add the
following definitions in the appropriate alphabetical order:
      “Accounting Changes” has the meaning set forth in Section 13.16.
     “Capital Lease” means any lease which has been or would be capitalized on
the books of the lessee in accordance with GAAP.
     “ Off-Balance Sheet Liability” of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any sale and leaseback
transaction which is not a Capital Lease, (iii) any liability under any
so-called “synthetic lease” transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.
     “Operating Lease” of a Person means any lease of Property (other than a
Capital Lease) by such Person as lessee.
     “Property” of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
          (c) Schedule C to the Purchase Agreement is amended to delete the
definitions of “Consolidated EBIT”, “Consolidated Interest Expense” and “Total
Consolidated Capitalization” in their entirety and replace them with the
following:
     “Consolidated EBIT” means, for any period, Consolidated Net Income for such
period plus (i) to the extent deducted from revenues in determining such
Consolidated Net Income (without duplication), (a) Consolidated Interest Expense
plus interest or dividends on Hybrid Preferred Securities, (b) expense for taxes
paid or accrued, and (c) any non-cash write-offs and write-downs contained in
Consumers’ Consolidated Net Income, including, without limitation, write-offs or
write-downs related to the sale of assets, impairment of assets and loss on
contracts minus (ii) to the extent included in such Consolidated Net Income,
extraordinary gains realized other than in the ordinary course of business, all

2

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calculated for Consumers and its Subsidiaries on a consolidated basis in
accordance with GAAP.
     “Consolidated Interest Expense” means with respect to any period for which
the amount thereof is to be determined, an amount equal to interest expense on
Debt, including payments in the nature of interest under Capital Leases but
excluding interest or dividends paid on Hybrid Preferred Securities, all
calculated for Consumers and its Subsidiaries on a consolidated basis in
accordance with GAAP.
     “Total Consolidated Capitalization” means, at any date of determination,
the sum of (a) Total Consolidated Debt, (b) equity of the common stockholders of
Consumers, (c) equity of the preference stockholders of Consumers, (d) Hybrid
Preferred Securities and (e) equity of the preferred stockholders of Consumers,
in each case determined at such date.
          Section 2. Conditions Precedent. This Amendment shall become effective
and be deemed effective, as of the date first above written, upon receipt by the
Administrative Agent of four (4) copies of this Amendment duly executed by each
of the parties hereto.
          Section 3. Covenants, Representations and Warranties of the Seller and
the Servicer.
          (a) Upon the effectiveness of this Amendment, each of the Seller and
the Servicer hereby reaffirms all covenants, representations and warranties made
by it in the Purchase Agreement, as amended, and agrees that all such covenants,
representations and warranties shall be deemed to have been re-made as of the
effective date of this Amendment.
          (b) Each of the Seller and the Servicer hereby represents and warrants
as to itself (i) that this Amendment constitutes the legal, valid and binding
obligation of such party enforceable against such party in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and general principles of equity which may limit the
availability of equitable remedies and (ii) upon the effectiveness of this
Amendment, that no event shall have occurred and be continuing which constitutes
an Amortization Event or a Potential Amortization Event.
          Section 4. Fees, Costs, Expenses and Taxes. Without limiting the
rights of the Administrative Agent and the Purchasers set forth in the Purchase
Agreement and the Fee Letter, the Seller agrees to pay all reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent and the
Purchasers incurred in connection with the preparation, execution and delivery
of this Amendment and the other instruments and documents to be delivered in
connection herewith and with respect to advising the Administrative Agent and
the Purchasers as to their rights and responsibilities hereunder and thereunder.

3

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          Section 5. Reference to and Effect on the Purchase Agreement.
          (a) Upon the effectiveness of this Amendment, each reference in the
Purchase Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,”
“hereby” or words of like import shall mean and be a reference to the Purchase
Agreement as amended hereby, and each reference to the Purchase Agreement in any
other document, instrument or agreement executed and/or delivered in connection
with the Purchase Agreement shall mean and be a reference to the Purchase
Agreement as amended hereby.
          (b) Except as specifically amended hereby, the Purchase Agreement and
other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect and are hereby
ratified and confirmed.
          (c) The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of any Purchaser or the
Administrative Agent under the Purchase Agreement or any of the other
Transaction Documents, nor constitute a waiver of any provision contained
therein.
          Section 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT
REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
          Section 7. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
          Section 8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.

4

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed on the date first set forth above by their respective officers
thereto duly authorized, to be effective as hereinabove provided.

            CONSUMERS RECEIVABLES FUNDING II, LLC, as Seller
      By:   /s/ Laura L. Mountcastle         NAME: Laura L. Mountcastle        
Title:     President        CONSUMERS ENERGY COMPANY, as Servicer
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle      
  Title:   Vice President     

Signature page to Amendment No. 1 to Receivables Purchase Agreement

 

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            FALCON ASSET SECURITIZATION CORPORATION
      By:   /s/ Leo Loughead         Name:   Leo Loughead        Title:  
Authorized Signatory        BANK ONE, NA (MAIN OFFICE CHICAGO),
   as a Financial Institution and as
   Administrative Agent
      By:   /s/ Leo Loughead         Name:   Leo Loughead        Title:  
Managing Director, Capital Markets     

Signature page to Amendment No. 1 to Receivables Purchase Agreement

 

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Execution Version
AMENDMENT NO. 2 AND WAIVER
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 2 AND WAIVER TO RECEIVABLES PURCHASE AGREEMENT
(this “Amendment”) dated as of October 10, 2003, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, individually,
and in its capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION CORPORATION (“Falcon”), and BANK ONE, NA (MAIN OFFICE CHICAGO)
(“Bank One”), as a Financial Institution and as Administrative Agent (in such
capacity, the “Administrative Agent”). Capitalized terms used herein without
definition shall have the meanings ascribed thereto in the “Receivables Purchase
Agreement” or the “Receivables Sale Agreement,” as applicable, referred to
below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, Bank One and the
Administrative Agent (as amended by that certain Amendment No. 1 to Receivables
Purchase Agreement dated as of August 18, 2003 and as the same may be further
amended, restated, supplemented or modified from time to time, the “Receivables
Purchase Agreement”).
          B. Reference is made to that certain Receivables Sale Agreement dated
as of May 22, 2003 among Seller, as “Buyer” thereunder and Consumers Energy
Company, as an “Originator” thereunder (as amended, restated, supplemented or
modified from time to time, the “Receivables Sale Agreement”).
          C. The parties hereto have agreed to amend and waive the requirements
of certain provisions of the Receivables Purchase Agreement upon the terms and
conditions set forth herein.
     SECTION 1. Amendment and Waiver. Subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, the parties hereto hereby
agree:
          (a) to amend the Receivables Purchase Agreement:
     (i) to delete clause (f) of Section 9.1 and substitute the following
therefor:
(f) As at the end of any Accrual Period, (i) the average of the Dilution Ratios
as of the end of such Accrual Period and the two preceding Accrual Periods shall
exceed 2.75%, (ii) the average of the Loss-to-Liquidation Ratios as of the end
of such Accrual Period and the two preceding Accrual Periods shall exceed 0.75%,
(iii) the average of the Past Due Ratios as of the end of such Accrual Period
and the

 

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two preceding Accrual Periods shall exceed (A) 9.0% for any Accrual Period
occurring in May through October of any calendar year or (B) 5.5% for any
Accrual Period occurring in November through April of any calendar year and
(iv) the average of the Days Sales Outstanding Ratios as of the end of such
Accrual Period and the two preceding Accrual Periods shall exceed 55 days.
     (ii) to delete the definition of “Default Ratio” set forth in Exhibit I
thereto; and
     (iii) to insert the following definition of “Loss-to-Liquidation Ratio” in
appropriate alphabetical order therein:
“Loss-to-Liquidation Ratio” means, for any Accrual Period, the ratio (expressed
as a percentage) equal to (i) all Charged-Off Receivables written off during
such Accrual Period divided by (ii) the aggregate amount of Collections received
during such Accrual Period.
and
     (b) to waive as of July 31, 2003 and August 31, 2003 any Amortization Event
arising under Section 9.1(f)(iii) of the Receivables Purchase Agreement as of
such date.
     SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms; and
     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
     SECTION 3. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which the Administrative Agent
or its counsel has received counterpart signature pages of this Amendment,
executed by each of the parties hereto.
     SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or

2

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delivered in connection therewith, shall mean and be a reference to the
Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein, in each
case except as specifically set forth herein.
     SECTION 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
     SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
     SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
     SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Administrative Agent or
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent or Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

3

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

            CONSUMERS RECEIVABLES FUNDING II, LLC
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle      
  Title:   President        CONSUMERS ENERGY COMPANY, as Servicer
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   Vice President     

Signature Page to Amendment No. 2 and Waiver

 

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            FALCON ASSET SECURITIZATION CORPORATION
      By:   /s/ Leo V. Loughead         Name:   Leo V. Loughead         Title:  
Authorized Signatory        BANK ONE, NA (MAIN OFFICE CHICAGO), as a
Financial Institution and Administrative Agent
      By:   /s/ Leo V. Loughead         Name:   Leo V. Loughead        Title:  
Managing Director Capital Markets    

Signature Page to Amendment No. 2 and Waiver

 

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EXECUTION COPY
AMENDMENT NO. 3 AND WAIVER
TO
RECEIVABLES PURCHASE AGREEMENT
           THIS AMENDMENT NO. 3 AND WAIVER TO RECEIVABLES PURCHASE AGREEMENT
(this “Amendment”) dated as of May 20, 2004, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION CORPORATION (“Falcon”), and BANK ONE, NA (MAIN OFFICE CHICAGO)
(“Bank One”), as a Financial Institution and as Administrative Agent (in such
capacity, the “Administrative Agent”), Capitalized terms used herein without
definition shall have the meanings ascribed thereto in the “Receivables Purchase
Agreement” referred to
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, Bank One and the
Administrative Agent (as amended by that certain Amendment No. 1 to Receivables
Purchase Agreement dated as of August 18, 2003 and that certain Amendment No. 2
to Receivables Purchase Agreement dated as of October 10, 2003, and as the same
may be further amended, restated, supplemented or modified from time to time,
the “Receivables Purchase Agreement”).
          B. The parties hereto have agreed to amend and waive the requirements
of certain provisions of the Receivables Purchase Agreement upon the terms and
conditions set forth herein.
     SECTION 1. Amendments. Subject to the satisfaction of the conditions
precedent set forth in Section 4 hereof, the parties hereto hereby agree to
amend the Receivables Purchase Agreement as follows:
     (a) Section 7.1(b) of the Receivables Purchase Agreement is hereby amended
to add the following clause (viii) after clause (vii):
(viii) Receivables Classification. The occurrence of any event or circumstance
(including, without limitation, any change in law, regulation or systems
reporting), which would impact the identification of any accounts receivable on
the books and records of the Originator or the Seller not less than thirty
(30) days prior to such occurrence (or in the event of a change in law or
regulation, as soon as reasonably possible).
     (b) Section 7.1 of the Receivables Purchase Agreement is hereby amended to
add the following paragraphs (t) and (u) after paragraph (s):

 

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(t) Receivables Classification. In connection with any change in the
identification of any accounts receivable on the books and records of the
Originator or the Seller, the Seller shall ensure that all actions required by
Section 7.1 (h) will have been taken prior to such change.
(u) Certification of Receivables Classification. In connection with the delivery
of each Monthly Report, the Servicer shall certify to the Administrative Agent
that it has made diligent inquiry and that the accounts receivable included in
the such report as Receivables are identified on the books and records of the
Originator and the Seller with the account code “Account 142.130 Accounts
Receivable-Electric & Gas-Central Billing”.
     (c) Exhibit I to the Receivables Purchase Agreement is hereby amended to
delete the definition of “Liquidity Termination Date” and replace it with the
following:
      “Liquidity Termination Date” means May 19, 2005.
     (d) Exhibit I to the Receivables Purchase Agreement is hereby amended to
delete the definition of “Purchase Price” and replace it with the following:
“Purchase Price” means, with respect to any Incremental Purchase of a Purchaser
Interest, the amount paid to Seller for such Purchaser Interest which shall not
exceed the least of (i) the amount requested by Seller in the applicable
Purchase Notice, (ii) the unused portion of the Purchase Limit on the applicable
purchase date and (iii) the amount (which may be an amount less than requested
by Seller in such Purchase Notice) which, when added to the Aggregate Capital,
would not cause the Purchaser Interests to exceed the Applicable Maximum
Purchaser Interest.
     (e) Exhibit I to the Receivables Purchase Agreement is hereby further
amended to delete the definition of “Receivable” and replace it with the
following:
“Receivable” means all indebtedness and other obligations owed to Seller. CRF I
or Originator (at the time it arises, and before giving effect to any transfer
or conveyance under the applicable Sale Agreement or hereunder) or in which
Seller, CRF I or Originator has a security interest or other interest,
including, without limitation, any indebtedness, obligation or interest
constituting an account, chattel paper, instrument or general intangible,
arising in connection with the sale of goods, electricity or gas or the
rendering of services by Originator, and which is identified

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on the books and records of the Originator or the Seller (including its
accounting system) with the account code “Account 142.130 Accounts
Receivable-Electric & Gas-Central Billing”, and further includes, without
limitation, the obligation to pay any Finance Charges with respect thereto.
Indebtedness and other rights and obligations arising from any one transaction,
including, without limitation, indebtedness and other rights and obligations
represented by an individual invoice, shall constitute a Receivable separate
from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction; provided, that any indebtedness,
rights or obligations referred to in the immediately preceding sentence shall be
a Receivable regardless of whether the account debtor, Seller, CRF I or
Originator treats such indebtedness, rights or obligations as a separate payment
obligation. Notwithstanding the foregoing, “Receivable” does not include
(i) Transferred Securitization Property or (ii) the books and records relating
solely to the Transferred Securitization Property; provided that the
determination of what constitutes collections of the Securitization Charges in
respect of Transferred Securitization Property shall be made in accordance with
the allocation methodology specified in Annex 2 to the Servicing Agreement.
SECTION 2. Waivers.
     (a) Subject to the satisfaction of the conditions precedent set forth in
Section 4 hereof, each of Falcon, each Financial Institution and the
Administrative Agent hereby agree to waive any Amortization Event arising under
Section 9.1(a)(ii) of the Receivables Purchase Agreement which may have occurred
prior to the date hereof solely as a result of a breach of clauses (iii) and
(iv) of Section 7.1 (i) of the Receivables Purchase Agreement.
     (b) Subject to the satisfaction of the conditions precedent set forth in
Section 4 hereof, each of Falcon, each Financial Institution and the
Administrative Agent hereby agree to waive any Amortization Event arising under
Section 9.1(b) of the Receivables Purchase Agreement which may have occurred
prior to the date hereof solely as a result of a breach of Section 5.1 (g) of
the Receivables Purchase Agreement in connection with the delivery of Monthly
Reports which included information regarding only Receivables which have been
identified on the books and records of the Originator or the Seller (including
its accounting system) with the account code “Account 142.130 Accounts
Receivable-Electric & Gas-Central Billing”.
     (c) Falcon, the Financial Institutions and the Administrative Agent hereby
expressly reserve all of their rights with respect to the occurrence of other
Amortization

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Events, if any, whether previously existing or hereinafter arising or which
exist at any time on or after the date first written above. The specific waivers
set forth in this Section 2 apply only to the above-specified violations.
     SECTION 3. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms; and
      (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
     SECTION 4. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which the Administrative Agent
or its counsel has received the following:
     (a) four (4) counterpart signature pages to this Amendment, executed by
each of the parties hereto;
     (b) four (4) counterpart signature pages to the amended and restated Fee
Letter dated the date hereof, executed by each of the parties thereto; and
     (c) four (4) counterpart signature pages to Amendment No. 1 to the
Receivables Sale Agreement dated the date hereof, executed by each of the
parties thereto.
     SECTION 5. Consent to Amendment. The Administrative Agent hereby consents
to Amendment No. 1 to the Receivables Sale Agreement dated the date hereof.
     SECTION 6. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.

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     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein, in each
case except as specifically set forth herein.
      SECTION 7. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
      SECTION 8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD
TO THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.
     SECTION 9. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
      SECTION 10. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Administrative Agent or
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent or Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

            CONSUMERS RECEIVABLES FUNDING II, LLC
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   President        CONSUMERS ENERGY COMPANY, as Servicer
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle      
  Title:   Vice President and Treasurer     

Signature Page to Amendment No. 3 and Waiver

 

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            FALCON ASSET SECURITIZATION CORPORATION
      By:   /s/ Leo V. Loughead         Name:   Leo V. Loughead        Title:  
Authorized Signatory        BANK ONE, NA (MAIN OFFICE CHICAGO), as a
Financial Institution and Administrative Agent
      By:   /s/ Leo V. Loughead         Name:   Leo V. Loughead         Title:  
Managing Director, Capital Markets     

Signature Page to Amendment No. 3 and Waiver

 

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Execution Version
AMENDMENT NO. 4
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 4 TO RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”) dated as of September 28, 2004, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION CORPORATION (“Falcon”), and BANK ONE, NA (MAIN OFFICE CHICAGO)
(“Bank One”), as a Financial Institution and as Administrative Agent (in such
capacity, the “Administrative Agent”). Capitalized terms used herein without
definition shall have the meanings ascribed thereto in the “Receivables Purchase
Agreement” referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, Bank One and the
Administrative Agent (as amended by that certain Amendment No. 1 to Receivables
Purchase Agreement dated as of August 18, 2003, that certain Amendment No. 2 to
Receivables Purchase Agreement dated as of October 10, 2003 and that certain
Amendment No. 3 and Waiver to Receivables Purchase Agreement dated as of May 20,
2004, and as the same may be further amended, restated, supplemented or modified
from time to time, the “Receivables Purchase Agreement”).
          B. The parties hereto have agreed to amend the requirements of certain
provisions of the Receivables Purchase Agreement upon the terms and conditions
set forth herein.
     SECTION 1. Amendments. Subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, the parties hereto hereby agree to
amend the Receivables Purchase Agreement as follows:
     (a) Section 9.1(k) of the Receivables Purchase Agreement is hereby amended
to delete clause (i) in its entirety and to substitute the following therefor:
(i) Consumers shall fail to maintain a ratio of Total Consolidated Debt to Total
Consolidated Capitalization of not greater than 0.70 to 1.0
     (b) Section 11.5 of the Receivables Purchase Agreement is hereby deleted
and the following substituted therefor:
Section 11.5 Non-Reliance on Administrative Agent and Other Purchasers.
(a) Each Purchaser expressly acknowledges that neither the Administrative Agent,
nor any of its officers, directors,

 

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employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Administrative Agent hereafter taken,
including, without limitation, any review of the affairs of any Seller Party,
shall be deemed to constitute any representation or warranty by the
Administrative Agent. Each Purchaser represents and warrants to the
Administrative Agent that it has and will, independently and without reliance
upon the Administrative Agent or any other Purchaser and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial and
other conditions and creditworthiness of Seller and made its own decision to
enter into this Agreement, the other Transaction Documents and all other
documents related hereto or thereto.
(b) Without limiting clause (a) above, each Purchaser acknowledges and agrees
that neither such Purchaser nor any of its Affiliates, participants or assignees
may rely on the Administrative Agent to carry out such Purchaser’s or other
Person’s customer identification program, or other obligations required or
imposed under or pursuant to the USA Patriot Act or the regulations thereunder,
including the regulations contained in 31 C.F.R. 103.121 (as amended or
replaced, the “CIP Regulations”), or any other applicable law, rule, regulation
or order of any governmental authority, including any program involving any of
the following items relating to or in connection with any Seller Party or any of
their Affiliates or agents, the Transaction Documents or the transactions
contemplated hereby: (i) any identity verification procedure; (ii) any
recordkeeping; (iii) any comparison with a government list; (iv) any customer
notice or (v) any other procedure required under the CIP Regulations or such
other law, rule, regulation or order.
     (c) Article XII of the Receivables Purchase Agreement is hereby amended to
add the following Section 12.5:
Section 12.5 USA Patriot Act Certification. Within 10 days after the date of
this Agreement and at such other times as are required under the USA Patriot
Act, each Purchaser and each assignee and participant that is not incorporated
under the laws of the United States of America or a state thereof (and is not
excepted from the certification requirement contained in Section 313 of the USA
Patriot Act and the applicable regulations) shall

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deliver to the Administrative Agent a certification, or, if applicable,
recertification, certifying that such Purchaser is not a “shell” and certifying
as to other matters as required by Section 313 of the USA Patriot Act and the
applicable regulations.
     (d) Article XIII of the Receivables Purchase Agreement is hereby amended to
add the following Section 13.16:
Section 13.16 USA Patriot Act. Each Purchaser hereby notifies the Seller that
pursuant to requirements of the USA Patriot Act, such Purchaser is required to
obtain, verify and record information that identifies the Seller, which
information includes the name and address of the Seller and other information
that will allow such Purchaser to identify the Seller in accordance with the USA
Patriot Act .
     (e) Exhibit I to the Receivables Purchase Agreement is hereby amended to
add the following definitions in appropriate alphabetical order therein:
“CIP Regulations” has the meaning specified in Section 11.5(b).
“USA Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L. No. 107-56, 115 Stat. 272 (2001), as amended.
     SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms; and
     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
     SECTION 3. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which the Administrative Agent
or its counsel has received four (4) counterpart signature pages to this
Amendment, executed by each of the parties hereto.
     SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this

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Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein, in each
case except as specifically set forth herein.
     SECTION 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
     SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
     SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
     SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Administrative Agent or
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent or Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

                  CONSUMERS RECEIVABLES FUNDING II, LLC    
 
           
 
  By:   /s/ Laura L. Mountcastle    
 
     
 
Name: Laura L. Mountcastle    
 
      Title: President, Chief Executive Officer, Chief Financial Officer and
Treasurer, Manager    
 
                CONSUMERS ENERGY COMPANY, as Servicer    
 
           
 
  By:   /s/ Laura L. Mountcastle    
 
           
 
      Name: Laura L. Mountcastle    
 
      Title: Vice President and Treasurer    

Signature Page to Amendment No.4

 

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                FALCON ASSET SECURITIZATION CORPORATION    
 
           
 
  By:   /s/ Leo V. Loughead    
 
     
 
Name: Leo V. Loughead
Title: Authorized Signatory    
 
                BANK ONE, NA (MAIN OFFICE CHICAGO), as a         Financial
Institution and Administrative Agent    
 
           
 
  By:   /s/ Leo V. Loughead    
 
           
 
      Name: Leo V. Loughead
Title: Managing Director, Capital
Markets    

Signature Page to Amendment No.4

 

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Execution Version
AMENDMENT NO. 5
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 5 TO RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”) dated as of May 19, 2005, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION CORPORATION (“Falcon”), and JPMORGAN CHASE BANK, N.A. (as
successor by merger to Bank One, NA (Main Office Chicago)) (“JPMorgan”), as a
Financial Institution and as Administrative Agent (in such capacity, the
“Administrative Agent”). Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the “Receivables Purchase Agreement”
referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended by that certain Amendment No. 1 to Receivables
Purchase Agreement dated as of August 18, 2003, that certain Amendment No. 2 to
Receivables Purchase Agreement dated as of October 10, 2003, that certain
Amendment No. 3 and Waiver to Receivables Purchase Agreement dated as of May 20,
2004 and that certain Amendment No. 4 to Receivables Purchase Agreement dated as
of September 28, 2004, and as the same may be further amended, restated,
supplemented or modified from time to time, the “Receivables Purchase
Agreement”).
          B. The parties hereto have agreed to amend the requirements of certain
provisions of the Receivables Purchase Agreement upon the terms and conditions
set forth herein.
     SECTION 1. Amendments. Subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, the parties hereto hereby agree to
amend the Receivables Purchase Agreement as follows:
     (a) Section 1.2 of the Receivables Purchase Agreement is hereby amended to
delete the first sentence thereof in its entirety and to substitute the
following therefor:
Seller shall, no later than 12:00 noon (New York time) on the Business Day
immediately preceding a desired incremental Purchase, provide the Administrative
Agent with notice of its request for such Incremental Purchase in the form set
forth as Exhibit II hereto (a “Purchase Notice”).
     (b) Exhibit I to the Receivables Purchase Agreement is hereby amended to
delete the definitions of “Liquidity Termination Date” and “Required Notice
Period” and substitute the following therefor:
“Liquidity Termination Date” means May 18, 2006.

 

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“Required Notice Period” means the number of days required notice set forth
below applicable to the Aggregate Reduction indicated below:

          Aggregate Reduction   Required Notice Period  
≤ $100,000,000
  one Business Days
>$100,000,000
  two Business Days

     SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms; and
     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
     SECTION 3. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which the Administrative Agent
or its counsel has received four (4) counterpart signature pages to this
Amendment, executed by each of the parties hereto.
     SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection

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     therewith, nor constitute a waiver of any provision contained therein, in
each case except as specifically set forth herein.
     SECTION 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
     SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
     SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
     SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Administrative Agent or
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent or Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

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                  FALCON ASSET SECURITIZATION CORPORATION    
 
           
 
  By:   /s/ Leo V. Loughead
 
   
 
      Name: Leo V. Loughead    
 
      Title: Authorized Signatory    
 
                JPMORGAN CHASE BANK, N.A., as a Financial Institution and
Administrative Agent    
 
           
 
  By:   /s/ Leo V. Loughead    
 
           
 
      Name: Leo V. Loughead    
 
      Title: Managing Director    

Signature Page to Amendment No. 5

 

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

                  CONSUMERS RECEIVABLES FUNDING II, LLC    
 
           
 
  By:   /s/ Laura L. Mountcastle
 
Name: Laura L. Mountcastle
Title: Manager, President, Chief
Executive Officer, Chief Financial
Officer and Treasurer    
 
                CONSUMERS ENERGY COMPANY, as servicer    
 
           
 
  By:   /s/ Laura L. Mountcastle    
 
           
 
      Name: Laura L. Mountcastle    
 
      Title: Vice President and Treasurer    

Signature Page to Amendment No. 5

 

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Execution Version
AMENDMENT NO. 6 AND WAIVER
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 6 AND WAIVER TO RECEIVABLES PURCHASE AGREEMENT
(this “Amendment”) dated as of September 8, 2005, is entered into among
CONSUMERS RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in
its capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION CORPORATION (“Falcon”), and JPMORGAN CHASE BANK, N.A. (as
successor by merger to Bank One, NA (Main Office Chicago)) (“JPMorgan”), as a
Financial Institution and as Administrative Agent (in such capacity, the
“Administrative Agent”). Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the “Receivables Purchase Agreement”
referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended by that certain Amendment No. 1 to Receivables
Purchase Agreement dated as of August 18, 2003, that certain Amendment No. 2 and
Waiver to Receivables Purchase Agreement dated as of October 10, 2003, that
certain Amendment No. 3 and Waiver to Receivables Purchase Agreement dated as of
May 20, 2004, that certain Amendment No. 4 to Receivables Purchase Agreement
dated as of September 28, 2004 and that certain Amendment No. 5 to Receivables
Purchase Agreement dated as of May 19, 2005, and as the same may be further
amended, restated, supplemented or modified from time to time, the “Receivables
Purchase Agreement”).
          B. The parties hereto have agreed to amend and waive the requirements
of certain provisions of the Receivables Purchase Agreement upon the terms and
conditions set forth herein.
     SECTION 1. Amendment and Waiver. Subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, the parties hereto hereby
agree:
          (a) to amend the Receivables Purchase Agreement:
     (i) to amend Section 9.1(f) to delete the phrase “(iii) the average of the
Past Due Ratios as of the end of such Accrual Period and the two preceding
Accrual Periods shall exceed (A) 9.0% for any Accrual Period occurring in May
through October of any calendar year or (B) 5.5% for any Accrual Period
occurring in November through April of any calendar year” and substitute the
phrase “(iii) the average of the Past Due Ratios as of the end of such Accrual
Period and the two preceding Accrual Periods shall exceed (A) 11.0% for any
Accrual Period occurring in May through October of any calendar year thereafter
or (B) 6% for any Accrual Period occurring in November through April of any
calendar year thereafter” therefor.

 

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     (ii) to delete the definition of “Debt” set forth on Schedule C in its
entirety, and substitute the following therefor:
“Debt” means, with respect to any Person, and without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all indebtedness of such
Person for the deferred purchase price of property or services (other than trade
accounts payable arising in the ordinary course of business which are not
overdue), (c) all liabilities arising from any accumulated funding deficiency
(as defined in Section 412(a) of the Code) for a Plan, (d) all liabilities
arising in connection with any withdrawal liability under ERISA to any
Multiemployer Plan, (e) all obligations of such Person arising under acceptance
facilities, (f) all obligations of such Person as lessee under Capital Leases,
(g) all obligations of such Person arising under any interest rate swap, “cap”,
“collar” or other hedging agreement; provided that for purposes of the
calculation of Debt for this clause (g) only, the actual amount of Debt of such
Person shall be determined on a net basis to the extent such agreements permit
such amounts to be calculated on a net basis, and (h) all guaranties,
endorsements (other than for collection in the ordinary course of business) and
other contingent obligations of such Person to assure a creditor against loss
(whether by the purchase of goods or services, the provision of funds for
payment, the supply of funds to invest in any Person or otherwise) in respect of
indebtedness or obligations of any other Person of the kinds referred to in
clauses (a) through (g) above.
     (iii) to delete the definition of “Unfunded Vested Liabilities” set forth
on Schedule C in its entirety.
          (b) to waive as of July 31, 2005 any Amortization Event arising under
Section 9.1(f)(iii) of the Receivables Purchase Agreement in respect of the
July 2005 Accrual Period.
     SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms; and
     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.

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     SECTION 3. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which the Administrative Agent
or its counsel has received four (4) counterpart signature pages to this
Amendment, executed by each of the parties hereto.
     SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein, in each
case except as specifically set forth herein.
     SECTION 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
     SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
     SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.

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     SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Administrative Agent or
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent or Purchasers with respect thereto.
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                  FALCON ASSET SECURITIZATION CORPORATION    
 
           
 
  By:   JPMorgan Chase Bank, N.A., as attorney in fact    
 
           
 
  By:   /s/ Leo V. Loughead
 
Name: Leo V. Loughead
Title: Authorized Signatory    
 
                JPMORGAN CHASE BANK, N.A., as a Financial         Institution
and Administrative Agent    
 
           
 
  By:   /s/ Leo V. Loughead    
 
           
 
      Name: Leo V. Loughead
Title: Managing Director    

Signature Page to Amendment No. 6 and Waiver

 

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

             
 
  CONSUMERS RECEIVABLES FUNDING II, LLC    
 
           
 
  By:   /s/ Laura L. Mountcastle
 
Name: Laura L. Mountcastle
Title: Vice President and Treasurer    
 
           
 
  CONSUMERS ENERGY COMPANY, as servicer    
 
           
 
  By:   /s/ Laura L. Mountcastle
 
   
 
      Name: Laura L. Mountcastle
Title: Vice President and Treasurer    

Signature Page to Amendment No. 6 and Waiver

 

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Execution Copy
AMENDMENT NO. 7 AND WAIVER
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 7 AND WAIVER TO RECEIVABLES PURCHASE AGREEMENT
(this “Amendment”) dated as of December 22, 2005, is entered into among
CONSUMERS RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in
its capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION CORPORATION (“Falcon”), and JPMORGAN CHASE BANK, N.A. (as
successor by merger to Bank One, NA (Main Office Chicago)) (“JPMorgan”). as a
Financial Institution and as Administrative Agent (in such capacity, the
“Administrative Agent”). Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the “Receivables Purchase Agreement”
referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended prior to the date hereof and as the same may be
further amended, restated, supplemented or modified from time to time, the
“Receivables Purchase Agreement”).
          B. The parties hereto have agreed to amend and waive the requirements
of certain provisions of the Receivables Purchase Agreement upon the terms and
conditions set forth herein.
     SECTION 1. Amendment and Waiver. Subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, the parties hereto hereby
agree:
          (a) to amend the Receivables Purchase Agreement:
     (i) to delete clause (ii) of Section 9.l (f) thereof and substitute the
clause “(ii) the average of the Loss-to-Liquidation Ratios as of the end of such
Accrual Period and the two preceding Accrual Periods shall exceed 1.0%”
therefor;
     (ii) to delete clause (iii) of Section 9.1 (f) thereof and substitute the
clause “(iii) the average of the Past Due Ratios as of the end of such Accrual
Period and the two preceding Accrual Periods shall exceed (A) 11.0% for any
Accrual Period occurring in May through October of any calendar year, (B) 9.0%
for any Accrual Period occurring in November of any calendar year or (C) 7.0%
for any Accrual Period occurring in December through April of any calendar year”
therefor;
;and

 

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     (iii) to delete the definition of “Loss Ratio” in its entirety and
substitute the following therefor:
          “Loss Ratio” means, at any time, a ratio (expressed as a percentage)
equal to (i) the sum of (a) the amount equal to (x) the aggregate Outstanding
Balance of all Billed Receivables which are more than sixty (60) and less than
ninety-one (91) days past due as of the last day of the most recently ended
Accrual Period times (y) 0.5 and (b) all Charged-Off Receivables written off
during such Accrual Period divided by (ii) the aggregate Original Balance of all
Receivables originated during the Accrual Period which ended three Accrual
Periods prior to such Accrual Period.
     (b) to waive as of November 30, 2005 any Amortization Event arising under
clauses (ii) or (iii) of Section 9. l(f) of the Receivables Purchase Agreement
in respect of the November 2005 Accrual Period.
     SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) it has all necessary corporate or company power and authority to
execute and deliver this Amendment and to perform its obligations under the
Receivables Purchase Agreement as amended hereby, the execution and delivery of
this Amendment and the performance of its obligations under the Receivables
Purchase Agreement as amended hereby has been duly authorized by all necessary
corporate or company action on its part and this Amendment constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms; and
     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
     SECTION 3. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which the Administrative Agent
or its counsel has received four (4) counterpart signature pages to this
Amendment, executed by each of the parties hereto.
     SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.

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     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein, in each
case except as specifically set forth in Section l(b) above. Falcon, the
Financial Institutions and the Administrative Agent hereby expressly reserve all
of their rights with respect to the occurrence of other Amortization Events, if
any, whether previously existing or hereinafter arising or which exist at any
time on or after the date first written above.
     SECTIONS 5. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile or other electronic format shall be effective as delivery
of a manually executed counterpart of this Amendment.
     SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
     SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
     SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Administrative Agent or
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent or Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

            CONSUMERS RECEIVABLES FUNDING II, LLC
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   President        CONSUMERS ENERGY COMPANY, as Servicer
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   Vice President     

Signature Page to Amendment No. 7 and Waiver

 

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                  FALCON ASSET SECURITIZATION CORPORATION    
 
                By: JPMorgan Chase Bank, N.A., as attorney in fact    
 
           
 
  By:   /s/ Mark J. Connor
 
Name: Mark J. Connor    
 
      Title: Vice President    
 
                JPMORGAN CHASE BANK, N.A., as a Financial
        Institution and Administrative Agent    
 
           
 
  By:   /s/ Mark J. Connor
 
Name: Mark J. Connor    
 
      Title: Vice President    

Signature Page to Amendment No. 7 and Waiver

 

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Execution Copy
AMENDMENT NO. 8
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 8 TO RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”) dated as of March 13, 2006, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION CORPORATION (“Falcon”), and JPMORGAN CHASE BANK, N.A. (as
successor by merger to Bank One, NA (Main Office Chicago)) (“JPMorgan”), as a
Financial Institution and as Administrative Agent (in such capacity, the
“Administrative Agent”). Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the “Receivables Purchase Agreement”
referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended by that certain Amendment No. 1 to Receivables
Purchase Agreement dated as of August 18, 2003, that certain Amendment No. 2 to
Receivables Purchase Agreement dated as of October 10, 2003, that certain
Amendment No. 3 and Waiver to Receivables Purchase Agreement dated as of May 20,
2004, that certain Amendment No. 4 to Receivables Purchase Agreement dated as of
September 28, 2004, that certain Amendment No. 5 to Receivables Purchase
Agreement dated as of May 19, 2005, that certain Amendment No. 6 and Waiver to
Receivables Purchase Agreement dated as of September 8, 2005 and that certain
Amendment No. 7 and Waiver dated as of December 22, 2005, and as the same may be
further amended, restated, supplemented or modified from time to time, the
“Receivables Purchase Agreement”).
          B. The parties hereto have agreed to amend the requirements of certain
provisions of the Receivables Purchase Agreement upon the terms and conditions
set forth herein.
     SECTION 1. Amendment. Subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, the parties hereto hereby agree to
amend the Receivables Purchase Agreement as follows:
     (a) The definition of the term “Liquidity Termination Date” set forth in
Exhibit I to the Receivables Purchase Agreement is hereby amended to delete the
date “May 18, 2006” appearing therein and to replace such date with the date
“August 16, 2006”.
     SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms; and

 

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     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
     SECTION 3. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which the Administrative Agent
or its counsel has received four (4) counterpart signature pages to this
Amendment, executed by each of the parties hereto.
     SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein, in each
case except as specifically set forth herein.
     SECTION 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
     SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.

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     SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
     SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Administrative Agent or
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent or Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

            CONSUMERS RECEIVABLES FUNDING II, LLC, as Seller
    By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle        
Title:   President, CEO, CFO and Treasurer        CONSUMERS ENERGY COMPANY, as
Servicer
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle      
  Title:   Vice President and Treasurer     

Signature Page to Amendment No. 8

 

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                  FALCON ASSET SECURITIZATION CORPORATION         By: JPMorgan
Chase Bank, N.A., its attorney-in-fact    
 
           
 
  By:   /s/ Leo Loughead
 
Name: Leo Loughead    
 
      Title: Authorized Signatory    
 
                JPMORGAN CHASE BANK, N.A., as a Financial         Institution
and Administrative Agent    
 
           
 
  By:   /s/ Leo Loughead
 
Name: Leo Loughead    
 
      Title: Managing Director    

Signature Page to Amendment No. 8

 

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Execution Copy
AMENDMENT NO. 9
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 9 TO RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”) dated as of May 18, 2006, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION CORPORATION (“Falcon”), and JPMORGAN CHASE BANK, N.A. (as
successor by merger to Bank One, NA (Main Office Chicago)) (“JPMorgan”), as a
Financial Institution and as Administrative Agent (in such capacity, the
“Administrative Agent”). Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the “Receivables Purchase Agreement”
referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended prior to the date hereof, and as the same may
be further amended, restated, supplemented or modified from time to time, the
“Receivables Purchase Agreement”).
          B. The parties hereto have agreed to amend the requirements of certain
provisions of the Receivables Purchase Agreement upon the terms and conditions
set forth herein.
     SECTION 1. Amendment. Subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, the parties hereto hereby agree to
delete the definition of the term “Consolidated EBIT” set forth in Schedule C to
the Receivables Purchase Agreement and replace it with the following:
     “Consolidated EBIT” means, for any period, Consolidated Net Income for such
period plus (i) to the extent deducted from revenues in determining such
Consolidated Net Income (without duplication), (a) Consolidated Interest Expense
plus interest and dividends on Hybrid Preferred Securities and on securities of
the type described in clause (iv) of the definition of Total Consolidated Debt
(but only, in the case of securities of the type described in such clause (iv),
to the extent such securities have been deemed to be equity), (b) expense for
taxes paid or accrued, (c) non-cash write-offs and write-downs contained in
Consumers’ Consolidated Net Income, including write-offs or write-downs related
to the sale of assets, impairment of assets and loss on contracts, and
(d) non-cash losses on mark-to-market valuation of contracts minus (ii) to the
extent included in such Consolidated Net Income, extraordinary gains realized
other than in the ordinary course of business and non-cash gains on
mark-to-market valuation of contracts, all calculated for Consumers and its
Subsidiaries on a consolidated basis in accordance with GAAP.

 

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     SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms; and
     (b) on the date hereof, before and after giving effect to this Amendment,
(i) no Amortization Event or Potential Amortization Event has occurred and is
continuing and (ii) the aggregate Purchaser Interests do not exceed the
Applicable Maximum Purchaser Interest.
     SECTION 3. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which the Administrative Agent
or its counsel has received four (4) counterpart signature pages to this
Amendment, executed by each of the parties hereto; provided that any
calculations made on or after February 9, 2006 based on Consolidated EBIT shall
be deemed to have been made using Consolidated EBIT as such term is amended
hereby.
     SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein, in each
case except as specifically set forth herein.
     SECTION 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile or other electronic means shall be effective as delivery
of a manually executed counterpart of this Amendment.

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     SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
     SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
     SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Administrative Agent and
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent and Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

            CONSUMERS RECEIVABLES FUNDING II, LLC, as Seller
    By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   President, CEO, CFO & Treasurer        CONSUMERS ENERGY COMPANY, as
Servicer
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle      
  Title:   Vice President & Treasurer     

Signature Page to Amendment No. 9

 

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              FALCON ASSET SECURITIZATION CORPORATION     By: JPMorgan Chase
Bank, N.A., its attorney-in-fact
 
       
 
  By:   /s/ Mark Connor
 
       
 
      Name: Mark Connor
 
      Title. Vice President
 
            JPMORGAN CHASE BANK, N.A., as a Financial     Institution and
Administrative Agent
 
       
 
  By:   /s/ Mark Connor
 
       
 
      Name: Mark Connor
 
      Title: Vice President

Signature Page to Amendment No. 9

 

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EXECUTION COPY
AMENDMENT NO. 10
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 10 TO RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”) dated as of August 15, 2006, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION COMPANY LLC (formerly Falcon Asset Securitization Corporation)
(“Falcon”), and JPMORGAN CHASE BANK, N.A. (as successor by merger to Bank One,
NA (Main Office Chicago)) (“JPMorgan”), as a Financial Institution and as
Administrative Agent (in such capacity, the “Administrative Agent”). Capitalized
terms used herein without definition shall have the meanings ascribed thereto in
the “Receivables Purchase Agreement” referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended prior to the date hereof, and as the same may
be further amended, restated, supplemented or modified from time to time, the
“Receivables Purchase Agreement”).
          B. The parties hereto have agreed to amend the requirements of certain
provisions of the Receivables Purchase Agreement upon the terms and conditions
set forth herein.
          SECTION 1. Amendments. Subject to the satisfaction of the conditions
precedent set forth in Section 4 hereof, the parties hereto hereby agree to
amend the Receivables Purchase Agreement as follows:
     (a) The first sentence of Section 1.2 of the Receivables Purchase Agreement
is hereby deleted in its entirety and replaced with the following:
     Seller shall provide the Administrative Agent with at least one Business
Day’s prior notice in the form set forth as Exhibit II hereto of each
Incremental Purchase (a “Purchase Notice”).
     (b) The definition of the term “Liquidity Termination Date” set forth in
Exhibit I to the Receivables Purchase Agreement is hereby amended to delete the
date “August 16, 2006” appearing therein and to replace such date with the date
“August 15, 2007”.
     (c) Exhibit IV to the Receivables Purchase Agreement is hereby replaced in
its entirety with Exhibit IV attached hereto.
          SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:

 

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     (a) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms; and
     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
          SECTION 3. Waiver. Each of the Administrative Agent and each Purchaser
hereby waives any Amortization Event which has occurred prior to the date hereof
as a result of the Seller and the Originator terminating and adding Collection
Accounts which were not Specified Accounts without giving prior written notice
thereof to the Administrative Agent.
          SECTION 4. Conditions Precedent. This Amendment shall become effective
on the first Business Day (the “Effective Date”) on which the Administrative
Agent or its counsel has received four (4) counterpart signature pages to this
Amendment, executed by each of the parties hereto.
          SECTION 5. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein, in each
case except as specifically set forth in Section 3 above. Falcon, the Financial
Institutions and the Administrative Agent hereby expressly reserve all of their
rights with respect to the occurrence of other Amortization Events, if any,
whether previously existing or hereinafter arising or which exist at any time on
or after the date first written above.
          SECTION 6. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken

2

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together shall constitute but one and the same instrument. Delivery of an
executed counterpart of a signature page to this Amendment by facsimile or other
electronic means shall be effective as delivery of a manually executed
counterpart of this Amendment.
          SECTION 7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT
REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
          SECTION 8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
          SECTION 9. Fees and Expenses. Seller hereby confirms its agreement to
pay on demand all reasonable costs and expenses of the Administrative Agent and
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent and Purchasers with respect thereto.
          SECTION 10. Receivables Sale Agreement Amendment. Each of the
Administrative Agent and each Purchaser hereby consents and agrees to the
amendment and waiver contained in Amendment No. 2 to Receivables Sale Agreement
dated the date hereof between the Seller and the Originator.
[Remainder of Page Deliberately Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

            CONSUMERS RECEIVABLES FUNDING II, LLC, as Seller
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   President, CEO, CFO & Treasurer        CONSUMERS ENERGY COMPANY, as
Servicer
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   Vice President & Treasurer   

Signature Page to Amendment No. 10 to RPA

 

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            FALCON ASSET SECURITIZATION COMPANY LLC
(formerly Falcon Asset Securitization Corporation)
By: JPMorgan Chase Bank, N.A., its attorney-in-fact
      By:   /s/ Leo Loughead         Leo Loughead        Managing Director     
  JPMORGAN CHASE BANK, N.A., as a Financial
Institution and Administrative Agent
      By:   /s/ Leo Loughead         Leo Loughead        Managing Director     

Signature Page to Amendment No. 10 to RPA

 

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EXHIBIT IV
NAMES OF COLLECTION BANKS; COLLECTION ACCOUNTS; LOCK-BOXES
JPMorgan Chase Bank, N.A.
P O Box 2558
Houston, TX 77252-8391
Contact: Juanita Chretien
Phone: (713)216-8648
Fax: (713)216-4801
Email: juanita,l.chretien@chase.com
Specified Account: #000323010091
Specified Account: #1013233
Collection Account: #1242263
LaSalle Bank
201 Townsend Street, Suite 600
M0936/00
Lansing, MI 48933
Contact: Douglas Henderson
Phone: (517)377-0559
Fax: (517)377-0502
Email: doug.henderson@abnamro.com
Specified Account: #4825285820
Collection Accounts: #1054516142, #1054518354 (Concentration Account)
Citibank
4500 New Linden Hill
Wilmington, DE 19801
Contact: Laura Jones
Phone: (302)683-4496
Fax: (302)683-4933
Email: laura.b.jones@citigroup.com
Collection Accounts: #30489425, #27318
Comerica Bank
MC 7618
P O Box 75000
Detroit, MI 48275
Contact: Lorraine Edwards
Phone: (734)632-4536
Fax: (734)632-4545
Email: lorraine_m_edwards@comerica.com
Collection Accounts: #1851978096, #1851978898, #1852147071, #1852048774,
#1851120384, #1076119914,
and #1000123354 (Concentration Account)
Lock-Box Zip Code:
Lansing, MI 48937-0001

 

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EXECUTION COPY
AMENDMENT NO. 11
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 11 TO RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”) dated as of May 18,2007, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer”). FALCON ASSET
SECURITIZATION COMPANY LLC (“Falcon”), and JPMORGAN CHASE BANK, N.A.
(“JPMorgan”). as a Financial Institution and as Administrative Agent (in such
capacity, the “Administrative Agent”). Capitalized terms used herein without
definition shall have the meanings ascribed thereto in the “Receivables Purchase
Agreement” referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended prior to the date hereof, and as the same may
be further amended, restated, supplemented or modified from time to time, the
“Receivables Purchase Agreement”).
          B. The parties hereto have agreed to amend the requirements of certain
provisions of the Receivables Purchase Agreement upon the terms and conditions
set forth herein.
          SECTION 1. Amendments. Subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, the parties hereto hereby agree to
amend the Receivables Purchase Agreement as follows:
     (a) Section 9. l(k) of the Receivables Purchase Agreement is hereby deleted
in its entirety and replaced with the following:
     (k) Consumers shall fail to maintain a ratio of Total Consolidated Debt to
Total Consolidated Capitalization of not greater than 0.70 to 1.0. Defined terms
used in this Section 9.1 (k) shall have the meanings given to such terms in
Schedule C.
     (b) Schedule C to the Receivables Purchase Agreement is hereby replaced in
its entirety with Schedule C attached hereto.
          SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms; and

 

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     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
          SECTION 3. Conditions Precedent. This Amendment shall become effective
on the first Business Day (the “Effective Date”) on which the Administrative
Agent or its counsel has received four (4) counterpart signature pages to this
Amendment, executed by each of the parties hereto.
          SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein. Falcon,
the Financial Institutions and the Administrative Agent hereby expressly reserve
all of their rights with respect to the occurrence of other Amortization Events,
if any, whether previously existing or hereinafter arising or which exist at any
time on or after the date first written above.
          SECTION 5. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile or other electronic means shall be effective as delivery
of a manually executed counterpart of this Amendment.
          SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF

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NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF
NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
          SECTION 7. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
          SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to
pay on demand all reasonable costs and expenses of the Administrative Agent and
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent and Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

            CONSUMERS RECEIVABLES FUNDING II, LLC, as Seller
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   President, Chief Executive Officer,
Chief Financial Officer and Treasurer        CONSUMERS ENERGY COMPANY, as
Servicer
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   Vice President and Treasurer   

Signature Past to Amendment No. 11 to RPA

 

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            FALCON ASSET SECURITIZATION COMPANY LLC
By: JPMorgan Chase Bank, N.A., its attorney-in-fact
      By:   /s/ Mark Connor         Name:   Mark Connor        Title:   Vice
President        JPMORGAN CHASE BANK, N.A., as a Financial
Institution and Administrative Agent
      By:   /s/ Mark Connor         Name:   Mark Connor        Title:   Vice
President   

Signature Page to Amendment No. 11 to RPA

 

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SCHEDULE C
FINANCIAL COVENANT DEFINITIONS
     “Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling (including all directors and officers of such Person),
controlled by, or under direct or indirect common control with such Person. A
Person shall be deemed to control another entity if such Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of such entity, whether through the ownership of voting
securities, by contract or otherwise.
     “Agent” means JPMorgan in its capacity as administrative agent for the
Banks pursuant to the Credit Agreement, and not in its individual capacity as a
Bank, and any successor Agent appointed pursuant to the Credit Agreement.
     “Assignment Agreement” means an assignment made pursuant to an agreement
substantially in the form of Exhibit D to the Credit Agreement.
     “Banks” means the financial institutions from time to time party to the
Credit Agreement as Banks thereunder.
     “Bonds” means a series of interest-bearing First Mortgage Bonds created
under the Supplemental Indenture issued in favor of, and in form and substance
satisfactory to, the Agent.
     “Capital Lease” means any lease which has been or would be capitalized on
the books of the lessee in accordance with GAAP.
     “Code” means the Internal Revenue Code of 1986, as amended from time to
time.
     “Commitment” means, for each Bank, the obligation of such Bank to make
Loans to, and participate in Facility LCs issued upon the application of,
Consumers in an aggregate amount not exceeding the amount set forth in the
Credit Agreement or in any Assignment Agreement, as such amount may be modified
from time to time.
     “Consolidated Subsidiary” means any Subsidiary whose accounts are or are
required to be consolidated with the accounts of Consumers in accordance with
GAAP.
     “Consumers” means Consumers Energy Company, a Michigan corporation.
     “Credit Agreement” means that certain Fourth Amended and Restated Credit
Agreement, dated as of March 30, 2007 (as the same may be amended, supplemented
or otherwise modified from time to time) among Consumers, the financial
institutions from time to time party thereto as “Banks” and JPMorgan, as Agent.
     “Credit Documents” means the Credit Agreement, the Facility LC
Applications, the Supplemental Indenture and the Bonds.

Sch.C-1

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     “Debt” means, with respect to any Person, and without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all indebtedness of such
Person for the deferred purchase price of property or services (other than trade
accounts payable arising in the ordinary course of business which are not
overdue), (c) all liabilities arising from any accumulated funding deficiency
(as defined in Section 412(a) of the Code) for a Plan, (d) all liabilities
arising in connection with any withdrawal liability under ERISA to any
Multiemployer Plan, (e) all obligations of such Person arising under acceptance
facilities, (f) all obligations of such Person as lessee under Capital Leases,
(g) all obligations of such Person arising under any interest rate swap, “cap”,
“collar” or other hedging agreement; provided that for purposes of the
calculation of Debt for this clause (g) only, the actual amount of Debt of such
Person shall be determined on a net basis to the extent such agreements permit
such amounts to be calculated on a net basis, and (h) all guaranties,
endorsements (other than for collection in the ordinary course of business) and
other contingent obligations of such Person to assure a creditor against loss
(whether by the purchase of goods or services, the provision of funds for
payment, the supply of funds to invest in any Person or otherwise) in respect of
indebtedness or obligations of any other Person of the kinds referred to in
clauses (a) through (g) above.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
     “ERISA Affiliate” means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Consumers or is under common control (within the
meaning of Section 414(c) of the Code) with Consumers.
     “Existing Facility LC” means each letter of credit issued under the Prior
Credit Agreement and identified in the Credit Agreement.
     “Facility LC” means each standby or commercial letter of credit issued
under the Credit Agreement and each Existing Facility LC.
     “Facility LC Application” means each application agreement executed and
delivered by Consumers in respect of a Facility LC.
     “First Mortgage Bonds” means bonds issued by Consumers pursuant to the
Indenture.
     “Fitch” means Fitch Inc. or any successor thereto.
     “GAAP” means generally accepted accounting principles in the United States
of America as in effect on the date hereof, applied on a basis consistent with
those used in the preparation of the financial statements referred to in the
Credit Agreement (except, for purposes of the annual and quarterly financial
statements required to be delivered pursuant to the Credit Agreement, for
changes concurred in by Consumers’ independent public accountants).
     “Hybrid Equity Securities” means securities issued by Consumers or a Hybrid
Equity Securities Subsidiary that (i) are classified as possessing a minimum of
at least two of the following: (x) “intermediate equity content” by S&P; (y)
“Basket C equity credit” by Moody’s; and (z) “50% equity credit” by Fitch and
(ii) require no repayment, prepayment,

Sch.C-2

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mandatory redemption or mandatory repurchase prior to the date that is at least
91 days after the later of the termination of the Commitments and the repayment
in full of all Obligations.
     “Hybrid Equity Securities Subsidiary” means any Delaware business trust (or
similar entity) (i) all of the common equity interest of which is owned (either
directly or indirectly through one or more wholly-owned Subsidiaries of
Consumers) at all times by Consumers or a wholly-owned direct or indirect
Subsidiary of Consumers, (ii) that has been formed for the purpose of issuing
Hybrid Equity Securities and (iii) substantially all of the assets of which
consist at all times solely of Junior Subordinated Debt issued by Consumers or a
wholly-owned direct or indirect Subsidiary of Consumers (as the case may be) and
payments made from time to time on such Junior Subordinated Debt.
     “Hybrid Preferred Securities” means any preferred securities issued by a
Hybrid Preferred Securities Subsidiary, where such preferred securities have the
following characteristics:
          (i) such Hybrid Preferred Securities Subsidiary lends substantially
all of the proceeds from the issuance of such preferred securities to Consumers
or a wholly-owned direct or indirect Subsidiary of Consumers in exchange for
Junior Subordinated Debt issued by Consumers or such wholly-owned direct or
indirect Subsidiary, respectively;
          (ii) such preferred securities contain terms providing for the
deferral of interest payments corresponding to provisions providing for the
deferral of interest payments on the Junior Subordinated Debt; and
          (iii) Consumers or a wholly-owned direct or indirect Subsidiary of
Consumers (as the case may be) makes periodic interest payments on the Junior
Subordinated Debt, which interest payments are in turn used by the Hybrid
Preferred Securities Subsidiary to make corresponding payments to the holders of
the preferred securities.
     “Hybrid Preferred Securities Subsidiary” means any Delaware business trust
(or similar entity) (i) all of the common equity interest of which is owned
(either directly or indirectly through one or more wholly-owned Subsidiaries of
Consumers) at all times by Consumers or a wholly-owned direct or indirect
Subsidiary of Consumers, (ii) that has been formed for the purpose of issuing
Hybrid Preferred Securities and (iii) substantially all of the assets of which
consist at all times solely of Junior Subordinated Debt issued by Consumers or a
wholly-owned direct or indirect Subsidiary of Consumers (as the case may be) and
payments made from time to time on such Junior Subordinated Debt.
     “Indenture” means the Indenture, dated as of September 1,1945, as
supplemented and amended from time to time, from Consumers to The Bank of New
York, as successor Trustee.
     “JPMorgan” means JPMorgan Chase Bank, N.A. (as successor by merger to Bank
One, NA (Main Office — Chicago)), in its individual capacity, and its successors
and assigns.
     “Junior Subordinated Debt” means any unsecured Debt of Consumers or a
Subsidiary of Consumers (i) issued in exchange for the proceeds of Hybrid Equity
Securities or Hybrid

Sch.C-3

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Preferred Securities and (ii) subordinated to the rights of the Banks under the
Credit Agreement and under the other Credit Documents pursuant to terms of
subordination substantially similar to those set forth in Exhibit E to the
Credit Agreement, or pursuant to other terms and conditions satisfactory to the
Majority Banks.
     “LC Issuer” means JPMorgan (or any subsidiary or affiliate of JPMorgan
designated by JPMorgan) in its capacity as an issuer of Facility LCs under the
Credit Agreement, and any other Bank designated by Consumers that (i) agrees to
be an issuer of Facility LCs hereunder and (ii) is approved by the Agent (such
approval not to be unreasonably withheld or delayed).
     “Loan” means the loans made time to time to Consumers by the Banks under
the Credit Agreement.
     “Majority Banks” means, as of any date of determination, Banks in the
aggregate having more than 50% of the aggregate commitments under the Credit
Agreement as of such date or, if the aggregate commitments have been terminated,
Banks in the aggregate holding more than 50% of the aggregate unpaid principal
amount of outstanding credit exposure as of such date.
     “Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.
     “Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA.
     “Net Proceeds” means, with respect to any sale or issuance of securities or
incurrence of Debt by any Person, the excess of (i) the gross cash proceeds
received by or on behalf of such Person in respect of such sale, issuance or
incurrence (as the case may be) over (ii) customary underwriting commissions,
auditing and legal fees, printing costs, rating agency fees and other customary
and reasonable fees and expenses incurred by such Person in connection
therewith.
     “Obligations” means all unpaid principal of and accrued and unpaid interest
on the Loans, all Reimbursement Obligations, all accrued and unpaid fees and all
other obligations of Consumers to the Banks or to any Bank, the LC Issuer or the
Agent arising under the Credit Documents.
     “Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.
     “Plan” means any employee benefit plan (other than a Multiemployer Plan)
maintained for employees of Consumers or any ERISA Affiliate and covered by
Title IV of ERISA.
     “Prior Agreement” means the Third Amended and Restated Credit Agreement
dated as of May 18, 2005 among Consumers, various financial institutions and
JPMorgan (then known as Bank One, NA), as Agent, as amended.
     “Reimbursement Obligations” means, at any time, the aggregate of all
obligations of Consumers then outstanding under the Credit Agreement to
reimburse the LC Issuer for amounts paid by the LC Issuer in respect of any one
or more drawings under Facility LCs.

Sch.C-4

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     “S&P” means Standard and Poor’s Rating Services, a division of The McGraw
Hill Companies, Inc., or any successor thereto.
     “Securitized Bonds” shall mean any nonrecourse bonds or similar
asset-backed securities issued by a special-purpose Subsidiary of Consumers
which are payable solely from specialized charges authorized by the utility
commission of the relevant state in connection with the recovery of (x) stranded
regulatory costs, (y) stranded clean air and pension costs and (z) other
“Qualified Costs” (as defined in M.C.L. §460.10h(g)) authorized to be
securitized by the Michigan Public Service Commission.
     “Single Employer Plan” means a Plan maintained by Consumers or any ERISA
Affiliate for employees of Consumers or any ERISA Affiliate.
     “Subsidiary” means, as to any Person, any corporation or other entity of
which at least a majority of the securities or other ownership interests having
ordinary voting power (absolutely or contingently) for the election of directors
or other Persons performing similar functions are at the time owned directly or
indirectly by such Person.
     “Supplemental Indenture” means a supplemental indenture substantially in
the form set forth in the Exhibits to the Credit Agreement.
     “Total Consolidated Capitalization” means, at any date of determination,
without duplication, the sum of (a) Total Consolidated Debt plus all amounts
excluded from Total Consolidated Debt pursuant to clauses (ii), (iii), (iv),
(vi) and (vii) of the proviso to the definition of such term (but only, in the
case of securities of the type described in clause (iii) or (iv) of such
proviso, to the extent such securities have been deemed to be equity pursuant to
Financial Accounting Standards Board Statement No. 150), (b) equity of the
common stockholders of Consumers, (c) equity of the preference stockholders of
Consumers and (d) equity of the preferred stockholders of Consumers, in each
case determined at such date.
     “Total Consolidated Debt” means, at any date of determination, the
aggregate Debt of Consumers and its Consolidated Subsidiaries; provided that
Total Consolidated Debt shall exclude, without duplication, (i) the principal
amount of any Securitized Bonds, (ii) any Junior Subordinated Debt owned by any
Hybrid Equity Securities Subsidiary or Hybrid Preferred Securities Subsidiary,
(iii) Hybrid Equity Securities or Hybrid Preferred Securities outstanding as of
December 31, 2002 (including any guaranty by Consumers of payments with respect
to any such Hybrid Equity Securities or Hybrid Preferred Securities, provided
that such guaranty is subordinated to the rights of the Banks under the Credit
Agreement and under the other Credit Documents pursuant to terms of
subordination substantially similar to those set forth in Exhibit F to the
Credit Agreement, or pursuant to other terms and conditions satisfactory to the
Majority Banks), (iv) such percentage of the Net Proceeds from any issuance of
hybrid debt/equity securities (other than Junior Subordinated Debt, Hybrid
Equity Securities and Hybrid Preferred Securities) by Consumers or any
Consolidated Subsidiary as shall be agreed to be deemed equity by the Agent and
Consumers prior to the issuance thereof (which determination shall be based on,
among other things, the treatment (if any) given to such securities by the
applicable rating agencies), (v) if all or any portion of the disposition of
Consumers’ Palisades Nuclear Plant is required to be accounted for as a
financing under GAAP rather than as a sale, the amount of

Sch.C-5

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liabilities reflected on Consumers’ consolidated balance sheet as the result of
such disposition, (vi) obligations of Consumers and its Consolidated
Subsidiaries of the type described in Section 1.3 in the Credit Agreement,
(vii) Debt of any Affiliate of Consumers that is (1) consolidated on the
financial statements of Consumers solely as a result of the effect and
application of Financial Accounting Standards Board No. 46 and of Accounting
Research Bulletin No. 51, Consolidated Financial Statements, as modified by
Statement of Financial Accounting Standards No. 94, and (2) non-recourse to
Consumers or any of its Affiliates (other than the primary obligor of such Debt
and any of its Subsidiaries), (viii) Debt of Consumers and its Affiliates that
is re-categorized as such from certain lease obligations pursuant to Emerging
Issues Task Force (“EITF”) Issue 01-8, any subsequent EITF Issue or
recommendation or other interpretation, bulletin or other similar document by
the Financial Accounting Standards Board on or related to such re-categorization
and (ix) any non-cash obligations resulting from the adoption of Financial
Accounting Standards Board Statement No. 158 and any proposed amendment thereto,
to the extent such obligations are required to be treated as debt.

Sch.C-6

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Execution Copy
AMENDMENT NO. 12
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 12 TO RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”) dated as of August 14, 2007, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer’’), FALCON ASSET
SECURITIZATION COMPANY LLC (“Falcon”), and JPMORGAN CHASE BANK, N.A.
(“JPMorgan”), as a Financial Institution and as Administrative Agent (in such
capacity, the “Administrative Agent”). Capitalized terms used herein without
definition shall have the meanings ascribed thereto in the “Receivables Purchase
Agreement” referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended prior to the date hereof, and as the same may
be further amended, restated, supplemented or modified from time to time, the
“Receivables Purchase Agreement”).
          B. The parties hereto have agreed to amend the requirements of certain
provisions of the Receivables Purchase Agreement upon the terms and conditions
set forth herein.
          SECTION 1. Amendments. Subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, the parties hereto hereby agree to
amend the Receivables Purchase Agreement as follows:
     (a) Section 7. l(b)(vi) of the Receivables Purchase Agreement is hereby
deleted and replaced with the following:
(vi) Downgrade of Originator. Any downgrade in the rating of any Indebtedness of
Originator by S&P, by Moody’s or by Fitch, setting forth the Indebtedness
affected and the nature of such change.
     (b) The definition of the term “Debt Rating” set forth in Exhibit I to the
Receivables Purchase Agreement is hereby replaced with the following:
“Debt Rating” means the rating then assigned by S&P, Moody’s or Fitch, as
applicable, (a) at any time prior to the FMB Release Date, with respect to the
Senior Debt, and (b) at any time thereafter, with respect to the Originator’s
senior unsecured long-term debt (without credit enhancement).
     (c) The following definitions are hereby added to Exhibit I to the
Receivables Purchase Agreement in the appropriate alphabetical order:

 

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“Credit Agreement” means that certain Fourth Amended and Restated Credit
Agreement, dated as of March 30, 2007 (as in effect on August 14, 2007) among
Consumers, the financial institutions from time to time party thereto as “Banks”
and JPMorgan, as Agent.
“Fitch” means Fitch Inc.
“FMB Release Date” has the meaning set forth in the Credit Agreement.
“Senior Debt” has the meaning set forth in the Credit Agreement.
     (d) The definition of the term “Liquidity Termination Date” set forth in
Exhibit I to the Receivables Purchase Agreement is hereby amended to delete the
date “August 15, 2007” appearing therein and to replace such date with the date
“August 13, 2008”.
          SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) this Amendment constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms; and
     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
          SECTION 3. Conditions Precedent. This Amendment shall become effective
on the first Business Day (the “Effective Date”) on which the Administrative
Agent or its counsel has received four (4) counterpart signature pages to
(i) this Amendment, executed by each of the parties hereto and (ii) the amended
and restated Fee Letter dated the date hereof, executed by each of the parties
thereto.
          SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or

2

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delivered in connection therewith, shall remain in full force and effect and are
hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein. Falcon,
the Financial Institutions and the Administrative Agent hereby expressly reserve
all of their rights with respect to the occurrence of other Amortization Events,
if any, whether previously existing or hereinafter arising or which exist at any
time on or after the date first written above.
          SECTION 5. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile or other electronic means shall be effective as delivery
of a manually executed counterpart of this Amendment.
          SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT
REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
          SECTION 7. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
          SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to
pay on demand all reasonable costs and expenses of the Administrative Agent and
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent and Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

3

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

            CONSUMERS RECEIVABLES FUNDING II, LLC, as Seller
      By:   /s/ Thomas J. Webb         Name:   Thomas J. Webb        Title:  
Executive Vice President     

            CONSUMERS ENERGY COMPANY, as Servicer
      By:   /s/ Thomas J. Webb         Name:   Thomas J. Webb        Title:  
Executive Vice President and Chief Financial Officer     

Signature Page to Amendment No. 12 to RPA

 

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              FALCON ASSET SECURITIZATION COMPANY LLC
 
  By:   JPMorgan Chase Bank, N.A., its attorney-in-fact
 
       
 
  By:   /s/ Mark Connor
 
       
 
      Name: Mark Connor
Title: Vice President
 
            JPMORGAN CHASE BANK, N.A., as a Financial     Institution and
Administrative Agent
 
       
 
  By:   /s/ Mark Connor
 
       
 
      Name: Mark Connor
Title: Vice President

Signature Page to Amendment No. 12 to RPA

 

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              FALCON ASSET SECURITIZATION COMPANY LLC
 
  By:   JPMorgan Chase Bank, N.A., its attorney-in-fact
 
       
 
  By:   /s/ Mark Connor
 
       
 
      Name: Mark Connor
Title: Vice President
 
            JPMORGAN CHASE BANK, N.A., as a Financial     Institution and
Administrative Agent
 
       
 
  By:   /s/ Mark Connor
 
       
 
      Name: Mark Connor
Title: Vice President

Signature Page to Amendment No. 12 to RPA

 

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              FALCON ASSET SECURITIZATION COMPANY LLC
 
  By:   JPMorgan Chase Bank, N.A., its attorney-in-fact
 
       
 
  By:   /s/ Mark Connor
 
       
 
      Name: Mark Connor
Title: Vice President
 
            JPMORGAN CHASE BANK, N.A., as a Financial     Institution and
Administrative Agent
 
       
 
  By:   /s/ Mark Connor
 
       
 
      Name: Mark Connor
Title: Vice President

Signature Page to Amendment No. 12 to RPA

 

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              FALCON ASSET SECURITIZATION COMPANY LLC
 
  By:   JPMorgan Chase Bank, N.A., its attorney-in-fact
 
       
 
  By:   /s/ Mark Connor
 
       
 
      Name: Mark Connor
Title: Vice President
 
            JPMORGAN CHASE BANK, N.A., as a Financial     Institution and
Administrative Agent
 
       
 
  By:   /s/ Mark Connor
 
       
 
      Name: Mark Connor
Title: Vice President

Signature Page to Amendment No. 12 to RPA

 

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Execution Copy
AMENDMENT NO. 13
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 13 TO RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”) dated as of August 12, 2008, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION COMPANY LLC (“Falcon”), and JPMORGAN CHASE BANK, N.A.
(“JPMorgan”), as a Financial Institution and as Administrative Agent (in such
capacity, the “Administrative Agent”). Capitalized terms used herein without
definition shall have the meanings ascribed thereto in the “Purchase Agreement”
referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended prior to the date hereof, and as the same may
be further amended, restated, supplemented or modified from time to time, the
“Purchase Agreement”).
          B. The parties hereto have agreed to amend the requirements of certain
provisions of the Purchase Agreement upon the terms and conditions set forth
herein.
          SECTION 1. Amendments. Subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, the parties hereto hereby agree to
amend the Purchase Agreement as follows:
          (a) The following new Section 10.5 is hereby added to the Purchase
Agreement immediately following Section 10.4 of the Purchase Agreement:
     Section 10.5 Accounting Based Consolidation Event. (a) If an Accounting
Based Consolidation Event shall at any time occur then, upon demand by the
Administrative Agent, Seller shall pay to the Administrative Agent, for the
benefit of the relevant Affected Entity, such amounts as such Affected Entity
reasonably determines will compensate or reimburse such Affected Entity for any
resulting (i) fee, expense or increased cost charged to, incurred or otherwise
suffered by such Affected Entity, (ii) reduction in the rate of return on such
Affected Entity’s capital or reduction in the amount of any sum received or
receivable by such Affected Entity or (iii) internal capital charge or other
imputed cost determined by such Affected Entity to be allocable to Seller or the
transactions contemplated in this Agreement in connection therewith. Amounts
under this Section 10.5 may be demanded at any time without regard to the timing
of issuance of any financial statement by any Affected Entity.
     (b) For purposes of this Section 10.5, the following terms shall have the
following meanings:

 

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     “Accounting Based Consolidation Event” means the consolidation, for
financial and/or regulatory accounting purposes, of all or any portion of the
assets and liabilities of Conduit that are subject to this Agreement or any
other Transaction Document with all or any portion of the assets and liabilities
of an Affected Entity. An Accounting Based Consolidation Event shall be deemed
to occur on the date any Affected Entity shall acknowledge in writing that any
such consolidation of the assets and liabilities of Conduit shall occur.
     “Affected Entity” means (i) any Financial Institution, (ii) any insurance
company, bank or other funding entity providing liquidity, credit enhancement or
back-up purchase support or facilities to Conduit, (iii) any agent,
administrator or manager of Conduit or (iv) any bank holding company in respect
of any of the foregoing.
               (b) The following new Section 12.6 is hereby added to the
Purchase Agreement immediately following Section 12.5 of the Purchase Agreement:
     Section 12.6 Federal Reserve. Notwithstanding any other provision of this
Agreement to the contrary, any Financial Institution may at any time pledge or
grant a security interest in all or any portion of its rights (including,
without limitation, any Purchaser Interest and any rights to payment of Capital
and Yield) under this Agreement to secure obligations of such Financial
Institution to a Federal Reserve Bank, without notice to or consent of the
Seller or the Administrative Agent; provided that no such pledge or grant of a
security interest shall release a Financial Institution from any of its
obligations hereunder, or substitute any such pledgee or grantee for such
Financial Institution as a party hereto.
               (c) The following new Section 13.14(d) is hereby added to the
Purchase Agreement immediately following Section 13.14(c) of the Purchase
Agreement:
     (d) If, notwithstanding the intention of the parties expressed above, any
sale or transfer by Seller hereunder shall be characterized as a secured loan
and not a sale or such sale shall for any reason be ineffective or unenforceable
(any of the foregoing being a “Recharacterization”), then this Agreement shall
be deemed to constitute a security agreement under the UCC and other applicable
law. In the case of any Recharacterization, the Seller represents and warrants
that each remittance of Collections to the Administrative Agent or any Purchaser
hereunder will have been (i) in payment of a debt incurred in the ordinary
course of business or financial affairs and (ii) made in the ordinary course of
business or financial affairs.
               (d) The numbering of “Section 13.16” which was added to the
Purchase Agreement pursuant to Amendment No. 4 to Receivables Purchase Agreement
dated September 28, 2004 is hereby changed to “Section 13.17”.
               (e) The definition of the term “Fee Letter” set forth in
Exhibit I to the Purchase Agreement is hereby replaced with the following:

2

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     “Fee Letter” means that certain letter agreement dated as of August 12,
2008 among Seller, the Conduit and the Administrative Agent, as it may be
amended, restated, supplemented or otherwise modified from time to time.
          (f) The definition of the term “Liquidity Termination Date” set forth
in Exhibit I to the Purchase Agreement is hereby amended to delete the date
“August 13, 2008” appearing therein and to replace such date with the date
“February 13, 2009”.
          SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
          (a) this Amendment constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms; and
          (b) on the date hereof, before and after giving effect to this
Amendment, (i) other than as waived pursuant to this Amendment, no Amortization
Event or Potential Amortization Event has occurred and is continuing and
(ii) the aggregate Purchaser Interests do not exceed the Applicable Maximum
Purchaser Interest.
          SECTION 3. Conditions Precedent. This Amendment shall become effective
on the first Business Day (the “Effective Date”) on which (a) the Administrative
Agent or its counsel has received four (4) counterpart signature pages to
(i) this Amendment, executed by each of the parties hereto and (ii) the amended
and restated Fee Letter dated the date hereof, executed by each of the parties
thereto and (b) the Administrative Agent has received the “Amendment Fee” as
defined in the Fee Letter.
          SECTION 4. Reference to and Effect on the Transaction Documents.
          (a) Upon the effectiveness of this Amendment, (i) each reference in
the Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean
and be a reference to the Purchase Agreement as amended or otherwise modified
hereby, and (ii) each reference to the Purchase Agreement in any other
Transaction Document or any other document, instrument or agreement executed
and/or delivered in connection therewith, shall mean and be a reference to the
Purchase Agreement as amended or otherwise modified hereby.
          (b) Except as specifically amended, terminated or otherwise modified
above, the terms and conditions of the Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.
          (c) The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of the Administrative
Agent or any Purchaser under the Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein. Falcon,
the Financial Institutions and the Administrative Agent hereby expressly reserve
all of their rights with respect to the occurrence of other Amortization

3

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Events, if any, whether previously existing or hereinafter arising or which
exist at any time on or after the date first written above.
          SECTION 5. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile or other electronic means shall be effective as delivery
of a manually executed counterpart of this Amendment.
          SECTION 6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION,
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT
REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
          SECTION 7. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
          SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to
pay on demand all reasonable costs and expenses of the Administrative Agent and
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent and Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

            CONSUMERS RECEIVABLES FUNDING II, LLC, as Seller
    By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   Treasurer, President, Chief Executive Officer and Chief Financial
Officer        CONSUMERS ENERGY COMPANY, as Servicer
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   Vice President and Treasurer   

Signature Page to Amendment No. 13 to RPA

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                  FALCON ASSET SECURITIZATION COMPANY LLC
By: JPMorgan Chase Bank, N.A., its attorney-in-fact    
 
           
 
  By:   /s/ Patrick Menichillo
 
       
 
      Name: Patrick Menichillo    
 
      Title: Vice President    
 
                JPMORGAN CHASE BANK, N.A., as a Financial
Institution and Administrative Agent    
 
           
 
  By:   /s/ Patrick Menichillo    
 
           
 
      Name: Patrick Menichillo    
 
      Title: Vice President    

Signature Page to Amendment No. 13 to RPA

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EXECUTION COPY
AMENDMENT NO. 14 AND WAIVER
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 14 AND WAIVER TO RECEIVABLES PURCHASE AGREEMENT
(this “Amendment”) dated as of November 5, 2008, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION COMPANY LLC (“Falcon”), and JPMORGAN CHASE BANK, N.A. (as
successor by merger to Bank One, NA (Main Office Chicago)) (“JPMorgan”), as a
Financial Institution and as Administrative Agent (in such capacity, the
“Administrative Agent”). Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the “Receivables Purchase Agreement”
referred to below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended prior to the date hereof and as the same may be
further amended, restated, supplemented or modified from time to time, the
“Receivables Purchase Agreement”).
          B. The parties hereto have agreed to amend and waive the requirements
of certain provisions of the Receivables Purchase Agreement upon the terms and
conditions set forth herein.
     SECTION 1. Amendment and Waiver. Subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof:
     (a) The parties hereto hereby agree to amend the Receivables Purchase
Agreement:
     (i) to delete clause (ii) of Section 9.1(f) thereof and substitute the
clause “(ii) the average of the Loss-to-Liquidation Ratios as of the end of such
Accrual Period and the two preceding Accrual Periods shall exceed 2.0%”
therefor;
     (ii) to amend the definition of “Loss Percentage” in Exhibit I thereto to
delete the “8%” in clause (i) of such definition and replace it with “20%”;
     (iii) to amend the definition of “Purchase Limit” in Exhibit I thereto to
delete the “$325,000,000” in such definition and replace it with “$250,000,000”;
and
     (iv) to replace Schedule A thereto in its entirety with Exhibit A attached
hereto.

 

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     (b) Falcon, the Financial Institution and the Administrative Agent each
hereby agrees to waive as of September 30, 2008 any Amortization Event arising
under clause (ii) of Section 9.1(f) of the Receivables Purchase Agreement in
respect of the September 2008 Accrual Period. Falcon, the Financial Institution
and the Administrative Agent hereby expressly reserve all of their rights with
respect to the occurrence of other Amortization Events, if any, whether
previously existing or hereinafter arising or which exist at any time on or
after the date first written above. This specific waiver applies only to the
above-specified violations.
     SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) it has all necessary corporate or company power and authority to
execute and deliver this Amendment and to perform its obligations under the
Receivables Purchase Agreement as amended hereby, the execution and delivery of
this Amendment and the performance of its obligations under the Receivables
Purchase Agreement as amended hereby has been duly authorized by all necessary
corporate or company action on its part and this Amendment constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms; and
     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
     SECTION 3. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which the Administrative Agent
or its counsel has received four (4) counterpart signature pages to this
Amendment, executed by each of the parties hereto.
     SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Receivables Purchase Agreement to “this Receivables Purchase Agreement”, “this
Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean
and be a reference to the Receivables Purchase Agreement as amended or otherwise
modified hereby, and (ii) each reference to the Receivables Purchase Agreement
in any other Transaction Document or any other document, instrument or agreement
executed and/or delivered in connection therewith, shall mean and be a reference
to the Receivables Purchase Agreement as amended or otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Receivables Purchase Agreement, of all other
Transaction Documents and any other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force
and effect and are hereby ratified and confirmed.

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     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Receivables Purchase Agreement or any other Transaction
Document or any other document, instrument or agreement executed in connection
therewith, nor constitute a waiver of any provision contained therein, in each
case except as specifically set forth in Section 1(b) above.
     SECTION 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile or other electronic format shall be effective as delivery
of a manually executed counterpart of this Amendment.
     SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
     SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
     SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Administrative Agent or
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent or Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

            CONSUMERS RECEIVABLES FUNDING II, LLC
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   President, Chief Executive Officer, Chief Financial Officer and
Treasurer        CONSUMERS ENERGY COMPANY, as Servicer
      By:   /s/ Laura L. Mountcastle         Name:   Laura L. Mountcastle       
Title:   Vice President and Treasurer   

Signature Page to Amendment No. 14 and Waiver

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            FALCON ASSET SECURITIZATION COMPANY LLC
      By:   JPMorgan Chase Bank, N.A., its attorney-in-fact             By:  
/s/ Patrick Menichillo         Name:   Patrick Menichillo        Title:   Vice
President        JPMORGAN CHASE BANK, N.A., as a Financial
Institution and Administrative Agent
      By:   /s/ Patrick Menichillo         Name:   Patrick Menichillo       
Title:   Vice President   

Signature Page to Amendment No. 14 and Waiver

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Exhibit A
SCHEDULE A
COMMITMENTS OF FINANCIAL INSTITUTIONS

          Financial Institution   Commitment
JPMorgan Chase Bank, N.A. (as successor by merger to Bank One, NA (Main Office
Chicago))
  $ 250,000,000  

 

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Execution Copy
AMENDMENT NO. 15
TO
RECEIVABLES PURCHASE AGREEMENT
          THIS AMENDMENT NO. 15 TO RECEIVABLES PURCHASE AGREEMENT (this
“Amendment”) dated as of February 12, 2009, is entered into among CONSUMERS
RECEIVABLES FUNDING II, LLC (“Seller”), CONSUMERS ENERGY COMPANY, in its
capacity as Servicer (in such capacity, the “Servicer”), FALCON ASSET
SECURITIZATION COMPANY LLC (“Falcon”), and JPMORGAN CHASE BANK, N.A. (as
successor by merger to Bank One, NA (Main Office Chicago)) (“JPMorgan”), as a
Financial Institution and as Administrative Agent (in such capacity, the
“Administrative Agent”). Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the “Purchase Agreement” referred to
below.
PRELIMINARY STATEMENTS
          A. Reference is made to that certain Receivables Purchase Agreement
dated as of May 22, 2003 among Seller, Servicer, Falcon, JPMorgan and the
Administrative Agent (as amended prior to the date hereof and as the same may be
further amended, restated, supplemented or modified from time to time, the
“Purchase Agreement”).
          B. The parties hereto have agreed to amend certain provisions of the
Purchase Agreement upon the terms and conditions set forth herein.
     SECTION 1. Amendment. Subject to the satisfaction of the conditions
precedent set forth in Section 3 hereof, the parties hereto hereby agree to
amend the Purchase Agreement as follows:
     (a) Article I of the Purchase Agreement is hereby amended to delete
Section 1.4 in its entirety and replace it with the following:
     Section 1.4 Payment Requirements. All amounts to be paid or deposited by
any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 12:00 noon (New York
time) on the day when due in immediately available funds, and if not received
before 12:00 noon (New York time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Administrative Agent, for the account of such Purchaser, at 10
South Dearborn, Chicago, Illinois 60670 until otherwise notified by the
Administrative Agent. All computations of Yield (other than Yield calculated
using the Alternate Base Rate described in clauses (a) or (b) of the definition
thereof), per annum fees hereunder and per annum fees under the Fee Letter shall
be made on the basis of a year of 360 days for the actual number of days
elapsed. All computations of Yield calculated using the Alternate Base Rate
described in clauses (a) or (b) of the definition thereof shall be made on the
basis of a year of 365 or 366 days, as

 

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applicable, for the actual number of days elapsed. If any amount hereunder shall
be payable on a day which is not a Business Day, such amount shall be payable on
the next succeeding Business Day.
     (b) Article II of the Purchase Agreement is hereby amended to delete
Section 2.7 in its entirety and replace it with the following:
     Section 2.7 Maximum Purchaser Interests. Seller shall ensure that the
Purchaser Interests of the Purchasers shall at no time exceed in the aggregate
the Applicable Maximum Purchaser Interest. If the aggregate of the Purchaser
Interests of the Purchasers exceeds the Applicable Maximum Purchaser Interest,
Seller shall pay to the Administrative Agent, within one (I) Business Day, an
amount such that, after giving effect to such payment, the aggregate of the
Purchaser Interests equals or is less than the Applicable Maximum Purchaser
Interest. Amounts paid by the Seller under this Section 2.7 shall be applied to
the outstanding Capital of the Purchasers ratably in accordance with such
Purchasers’ respective Capital Pro Rata Shares.
     (c) Article IV of the Purchase Agreement is hereby amended to delete
Sections 4.1, 4.4 and 4.5(a) in their entirety and replace them with the
following:
     Section 4.1 Financial Institution Funding. Each Purchaser Interest of the
Financial Institutions shall accrue Yield for each day during its Tranche Period
at either the LIBO Rate or the Alternate Base Rate in accordance with the terms
and conditions hereof. Until Seller gives notice to the Administrative Agent of
another Bank Rate in accordance with Section 4.4, the initial Bank Rate for any
Purchaser Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Alternate Base Rate. If the Financial
Institutions acquire by assignment from Conduit all or any portion of a
Purchaser Interest (or an undivided interest therein) pursuant to the Liquidity
Agreement, each Purchaser Interest so assigned shall each be deemed to have a
new Tranche Period commencing on the date of any such assignment.
     Section 4.4 Financial Institution Bank Rates. Seller may select the LIBO
Rate or the Alternate Base Rate for each Purchaser Interest of the Financial
Institutions. Seller shall by 12:00 noon (New York time). (i) at least three
(3) Business Days prior to the expiration of any Terminating Tranche with
respect to which the LIBO Rate is being requested as a new Bank Rate and (ii) at
least one (I) Business Day prior to the expiration of any Terminating Tranche
with respect to which the Alternate Base Rate is being requested as a new Bank
Rate, give the Agent irrevocable notice of the new Bank Rate for the Purchaser
Interest associated with such Terminating Tranche. Until Seller gives notice to
the Agent of another Bank Rate, the initial Bank Rate for any Purchaser Interest
transferred to the Financial Institutions pursuant to the terms and conditions
hereof shall be the Alternate Base Rate.

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     Section 4.5 Suspension of the LIBO Rate. (a) If any Financial Institution
notifies the Administrative Agent that it has determined that funding its Pro
Rata Share of the Purchaser Interests of the Financial Institutions at a LIBO
Rate would violate any applicable law, rule, regulation, or directive of any
governmental or regulatory authority, whether or not having the force of law, or
that (i) deposits of a type and maturity appropriate to fund its Purchaser
Interests at such LIBO Rate are not available or (ii) such LIBO Rate does not
accurately reflect the cost of acquiring or maintaining a Purchaser Interest at
such LIBO Rate, then the Administrative Agent shall suspend the availability of
such LIBO Rate and select the Alternate Base Rate for any Purchaser Interest
accruing Yield at such LIBO Rate, and the then current Tranche Period for such
Purchaser Interest shall thereupon be terminated and a new Tranche Period based
upon the Alternate Base Rate shall commence.
     (d) Article VIII of the Purchase Agreement is hereby amended to delete
Section 8.5 in its entirety and replace it with the following:
     Section 8.5 Reports. The Servicer shall prepare and forward to the
Administrative Agent (i) on the twelfth (12th) Business Day of each month and at
such times as the Administrative Agent shall request, a Monthly Report, (ii) on
the second (2nd) Business Day of each week during a Level Two Enhancement
Period, a weekly report in substantially the same form as the Monthly Report or
such other form approved by the Administrative Agent in writing and reflecting
information as of the end of the prior week, (iii) on each Business Day during a
Level Three Enhancement Period, a Daily Report, and (iv) at such times as the
Administrative Agent shall reasonably request, an aging of Receivables.
     (e) Section 9.1 of the Purchase Agreement is hereby amended to delete
paragraph (a) in its entirety and replace it with the following:
     (a) Any Seller Party shall fail (i) to make any payment or deposit required
hereunder when due and such failure shall continue for one (1) Business Day, or
(ii) to perform or observe any term, covenant or agreement hereunder (other than
as referred to in clause (i) of this paragraph (a) and Section 9.1(b) through
(k)) and such failure shall continue for five (5) consecutive Business Days or a
“Servicer Default” shall occur under (and as such term is defined in) the
Servicing Agreement.
     (f) Section 9.1(f) of the Purchase Agreement is amended to delete the
percentage “7.0%” in clause (iii)(C) and replace it with “8.0%”
     (g) Exhibit I to the Purchase Agreement is hereby amended to add the
following definitions of “Alternate Base Rate” and “Daily Report” in the
appropriate alphabetical order:

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     “Alternate Base Rate” means, for any date, a rate per annum equal to the
greatest of (a) the LIBO Rate for a one month Tranche Period at approximately
11:00 a.m. London time on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1.0%, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% and (c) the corporate base rate, prime
rate or base rate of interest, as applicable, announced by the Administrative
Agent from time to time, changing when and as such rate changes (the “Base
Rate”). Any change in the Alternate Base Rate due to a change in the Base Rate,
the Federal Funds Effective Rate or the LIBO Rate shall be effective from and
including the effective date of such change in the Base Rate, the Federal Funds
Effective Rate or the LIBO Rate, respectively.
     “Daily Report” means a report, in substantially the form of Exhibit XII
hereto (appropriately completed), furnished by the Servicer to the
Administrative Agent pursuant to Section 8.5.
     (h) Exhibit I to the Purchase Agreement is hereby amended to delete the
definitions of “Applicable Stress Factor”, “Bank Rate”, “Default Fee”, “Fee
Letter” and “Liquidity Termination Date” and replace them with the following:
     “Applicable Stress Factor” means 2.5.
     “Bank Rate” means, the LIBO Rate or the Alternate Base Rate, as applicable,
with respect to each Purchaser Interest of the Financial Institutions and any
Purchaser Interest of Conduit, an undivided interest in which has been assigned
by Conduit to a Financial Institution pursuant to the Liquidity Agreement.
     “Default Fee” means with respect to any amount due and payable by Seller
(or required to be deposited by Servicer) in respect of any Aggregate Unpaids,
an amount equal to the greater of (i) $1000 and (ii) interest on any such unpaid
Aggregate Unpaids at a rate per annum equal to 2.75% above the Alternate Base
Rate.
     “Fee Letter” means that certain letter agreement dated as of February 12,
2009 among Seller, the Conduit and the Administrative Agent, as it may be
amended, restated, supplemented or otherwise modified from time to time.
     “Liquidity Termination Date” means May 13, 2009.
     (i) Exhibit I to the Purchase Agreement is hereby amended to delete the
definitions of “Excess WPP Receivables Amount”, “Prime Rate” and “WPP Limit”.
     (j) Exhibit I to the Purchase Agreement is hereby amended to delete clauses
(i) and (vi) of the definition of “Eligible Receivable” in their entirety and
replace them with the following:

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     (i) which is not a Charged-Off Receivable, a Delinquent Receivable or a WPP
Receivable,
     (vi) the Obligor of which (a) is not an Affiliate of (1) any party hereto
or (2) Originator and (b) to the knowledge of either Servicer or Seller, has not
taken any action, or suffered any event to occur, of the type described in
Section 9.1(d) (as if references to Seller Party therein refer to such Obligor),
     (k) Exhibit I to the Purchase Agreement is hereby amended to delete the
percentage “20%” in clause (i) of the definition of “Loss Percentage” and
replace it with “15%”
     (l) Exhibit I to the Purchase Agreement is hereby amended to add the word
“and” at the end of clause (vi) of the definition of “Net Receivables Balance”
and to delete the clause “and (viii) the Excess WPP Receivables Amount at such
time” of such definition in its entirety.
     (m) Exhibit I to the Purchase Agreement is hereby amended to delete clause
(b) of the definition of “Tranche Period” and replace it with the following:
     (b) if Yield for such Purchaser Interest is calculated on the basis of
clause (a) or (b) of the definition of Alternate Base Rate, a period commencing
on a Business Day selected by Seller and agreed to by the Administrative Agent,
provided no such period shall exceed one month.
     (n) Exhibit I to the Purchase Agreement is hereby amended to delete the
definitions of “Unbilled Receivables Offset Amount”, “Yield” and “Yield and
Servicer Fee Percentage” and replace them with the following:
     “Unbilled Receivables Offset Amount” means, at any time, an amount equal to
the lesser of (a) the credit balance of all EMPP Receivables as of the last day
of the immediately preceding Accrual Period and (b) the product of (i) the
greater of (A) 7% and (B) the ratio of (1) the total number of Obligors whose
accounts are subject to a balanced or levelized payment plan or a payment plan
based on a percentage of such Obligor’s income (giving rise to EMPP Receivables)
as of the last day of the immediately preceding Accrual Period divided by
(2) the total number of Obligors as of the last day of the immediately preceding
Accrual Period multiplied by (ii) the aggregate amount of Unbilled Receivables
for such Accrual Period.
     “Yield” means (a) for each respective Tranche Period relating to Purchaser
Interests funded by the Financial Institutions, including any Purchaser
Interests or undivided interest in a Purchaser Interest assigned to a Financial
Institution pursuant to the Liquidity Agreement, an amount equal to the product
of the applicable Bank Rate for each Purchaser Interest multiplied by the
Capital of such Purchaser Interest for each day elapsed during such Tranche
Period, annualized on a 360 day basis (or a 365 or 366 day basis, as applicable,
in the case of a Bank Rate determined by clause (a)

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or (b) of the definition of Alternate Base Rate), and (b) for each respective
Settlement Period relating to Purchaser Interests funded by Conduit, other than
a Purchaser Interest which, or an undivided interest in which, has been assigned
by Conduit to a Financial Institution pursuant to the Liquidity Agreement, an
amount equal to the product of the applicable CP Rate multiplied by the Capital
of such Purchaser Interest for each day elapsed during such Settlement Period,
annualized on a 360 day basis.
     “Yield and Servicer Fee Percentage” means, at any time, an amount equal to
the greater of (i) 1.5% and (ii) the ratio (expressed as a percentage) equal to
(a) the product of (x) 1.5, multiplied by (y) the Alternate Base Rate (measured
as of the close of business as of the last Business Day of the preceding
calendar month) plus 2.0%, multiplied by (z) the highest three-month average
Days Sales Outstanding Ratio over the prior twelve (12) months, divided by
(b) 360.
     (o) The Purchase Agreement is hereby amended to add Attachment A hereto as
a new Exhibit XII to the Purchase Agreement.
     SECTION 2. Representations and Warranties. Each of the Seller and the
Servicer hereby represents and warrants to each of the other parties hereto, as
to itself that:
     (a) it has all necessary corporate or company power and authority to
execute and deliver this Amendment and to perform its obligations under the
Purchase Agreement as amended hereby, the execution and delivery of this
Amendment and the performance of its obligations under the Purchase Agreement as
amended hereby has been duly authorized by all necessary corporate or company
action on its part and this Amendment constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms; and
     (b) on the date hereof, before and after giving effect to this Amendment,
(i) other than as waived pursuant to this Amendment, no Amortization Event or
Potential Amortization Event has occurred and is continuing and (ii) the
aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.
     SECTION 3. Conditions Precedent. This Amendment shall become effective on
the first Business Day (the “Effective Date”) on which (i) the Administrative
Agent or its counsel has received four (4) counterpart signature pages to each
of this Amendment and the Fee Letter of even date herewith, in each case,
executed by each of the parties hereto and (ii) the Administrative Agent has
received the Amendment Fee (as such term is defined in the Fee Letter).
     SECTION 4. Reference to and Effect on the Transaction Documents.
     (a) Upon the effectiveness of this Amendment, (i) each reference in the
Purchase Agreement to “this Receivables Purchase Agreement”, “this Agreement”,
“hereunder”, “hereof”, “herein” or words of like import shall mean and be a
reference to the Purchase Agreement as amended or otherwise modified hereby, and
(ii) each

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reference to the Purchase Agreement in any other Transaction Document or any
other document, instrument or agreement executed and/or delivered in connection
therewith, shall mean and be a reference to the Purchase Agreement as amended or
otherwise modified hereby.
     (b) Except as specifically amended, terminated or otherwise modified above,
the terms and conditions of the Purchase Agreement, of all other Transaction
Documents and any other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and effect and are
hereby ratified and confirmed.
     (c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of the Administrative Agent or
any Purchaser under the Purchase Agreement or any other Transaction Document or
any other document, instrument or agreement executed in connection therewith,
nor constitute a waiver of any provision contained therein.
     SECTION 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile or other electronic format shall be effective as delivery
of a manually executed counterpart of this Amendment.
     SECTION 6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
     SECTION 7. Headings. Section headings in this Amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
     SECTION 8. Fees and Expenses. Seller hereby confirms its agreement to pay
on demand all reasonable costs and expenses of the Administrative Agent or
Purchasers in connection with the preparation, execution and delivery of this
Amendment and any of the other instruments, documents and agreements to be
executed and/or delivered in connection herewith, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent or Purchasers with respect thereto.
[Remainder of Page Deliberately Left Blank]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective officers as of the date first above
written.

                  CONSUMERS RECEIVABLES FUNDING II, LLC    
 
           
 
  By:   /s/ Laura L. Mountcastle    
 
     
 
Name: Laura L. Mountcastle    
 
      Title: President, Chief Executive Officer,
Chief Financial Officer and Treasurer    
 
                CONSUMERS ENERGY COMPANY, as Servicer    
 
           
 
  By:   /s/ Laura L. Mountcastle    
 
     
 
Name: Laura L. Mountcastle    
 
      Title: Vice President and Treasurer    

Signature Page to Amendment No. 15

 

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              FALCON ASSET SECURITIZATION COMPANY LLC
 
            By: JPMorgan Chase Bank, N.A., its attorney-in-fact
 
       
 
  By:   /s/ Patrick Menichillo
 
     
 
 Name: Patrick Menichillo
 
      Title: Vice President
 
            JPMORGAN CHASE BANK, N.A., as a Financial
Institution and Administrative Agent
 
       
 
  By:   /s/ Patrick Menichillo
 
     
 
 Name: Patrick Menichillo
 
      Title: Vice President

Signature Page to Amendment No. 15

 

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Attachment A to Amendment No. 15 to Receivables Purchase Agreement
EXHIBIT XII
FORM OF DAILY REPORT
(Attached.)
Signature Page to Amendment No. 15