EX-10.(WW)






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



 









 








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



 









 






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



13









 






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.



17









 





          (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.



18









 





          (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



19









 




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



20









 







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



21









 




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



22









 




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



23









 




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



24









 




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.



25









 





          (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.



26









 





          (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



27









 




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



28









 




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.



29









 





          (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.



30









 





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




31












 






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



33









 






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



34









 






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



36









 






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



37









 






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



38









 






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



39









 






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:




40









 









     (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.




41









 








          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



42









 






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.




43









 








          (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.




44









 








          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



45









 






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]




46









 





     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




 









 





	 	 	 	 	 	 	 
	 	 	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




 









 





	 	 	 	 	 	 	 
	 	 	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





 












 





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  









 






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  









 







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




Exh I - 3  









 







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.




Exh I - 4  









 








          “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




Exh I - 5  









 







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




Exh I - 6  









 







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




Exh I - 7  









 







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),



Exh I - 8  









 






     (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




Exh I - 9  









 







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).




Exh I - 10  









 








          “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.




Exh I - 11  









 








          “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.




Exh I - 12  









 








          “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.




Exh I - 13  









 








          “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.




Exh I - 14  









 








          “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  











 





	 	 	 	 	 
	 

	 	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









 






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









 







	 	 	 
	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









 








          “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









 








          (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









 






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









 








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









 





     “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









 





     “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









 





     “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









 




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









 











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









 






	 	 	 	 	 
	 	 	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









 






	 	 	 	 	 
	 	 	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











 





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



 









 







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









 







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









 








          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









 





          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





 









 





	 	 	 	 	 
	 	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









 









 











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



 









 







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









 








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









 





          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





 









 





	 	 	 	 	 
	 	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





 









 





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):








 









 












(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



2









 







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



3









 







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.



4









 






     (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]




5









 





          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





 









 





	 	 	 	 	 
	 	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





 












 





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,



 









 






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



2









 







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



3









 







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]




4









 








          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






 









 








	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	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





 












 





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.



 









 






“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



2









 






     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









 








	 	 	 	 	 	 	 
	 	 	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




 









 








          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





 












 





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.



 









 






     (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.



2









 





     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.



3









 





     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]








4









 








	 	 	 	 	 	 	 
	 	 	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




 









 








          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





 












 





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



 









 






     (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.



2









 






     (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]




3









 





          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





 









 





	 	 	 	 	 	 	 
	 	 	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




 









 





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



 









 






     (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.



2









 





     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









 





          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





 









 





	 	 	 	 	 	 	 
	 	 	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




 









 





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.



 









 





     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.



2









 





     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









 





          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





 









 





	 	 	 	 	 
	 	 	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





 











 





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:




 









 






     (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









 




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]




3









 





          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





 









 





	 	 	 	 	 
	 	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





 









 





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




 









 





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



 









 






     (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




2









 




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









 





          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




 









 





	 	 	 	 	 
	 	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





 











 





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









 





     “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









 




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









 





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









 





     “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









 




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












 





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:



 









 






“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









 






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









 








          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




 









 








	 	 	 	 	 
	 	 	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




 









 








	 	 	 	 	 
	 	 	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




 









 








	 	 	 	 	 
	 	 	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




 









 








	 	 	 	 	 
	 	 	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





 












 





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:



 









 






     “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









 






     “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









 




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]




4









 





          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









 





	 	 	 	 	 	 	 
	 	 	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









 





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.



 









 






     (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.



2









 






     (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]




3









 





          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









 





	 	 	 	 	 
	 	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









 





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	 







 











 




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


 








 





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.



2








 




     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:



3








 




     “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:


4








 




     (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)



5








 




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



6








 




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]


7








 




          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


 








 





	 	 	 	 	 
	 	 	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



 








 





Attachment A to Amendment No. 15 to Receivables Purchase Agreement




EXHIBIT XII




FORM OF DAILY REPORT

(Attached.)




Signature Page to Amendment No. 15