exv10w34






Exhibit 10.34




EXECUTION COPY




AMENDED AND RESTATED

RECEIVABLES PURCHASE AGREEMENT

dated as of November 23, 2010




Among



CONSUMERS RECEIVABLES FUNDING II, LLC, as Seller,



CONSUMERS ENERGY COMPANY, as Servicer,



THE CONDUITS

from time to time party hereto,



THE FINANCIAL INSTITUTIONS

from time to time party hereto,



THE MANAGING AGENTS

from time to time party hereto,



and



JPMORGAN CHASE BANK, N.A.,

as Administrative Agent



 









 





CONSUMERS
RECEIVABLES FUNDING II, LLC


AMENDED AND RESTATED

RECEIVABLES PURCHASE AGREEMENT




          This Amended and Restated Receivables Purchase Agreement dated as of November 23, 2010 is
among Consumers Receivables Funding II, LLC, a Delaware limited liability company (the
“Seller”), Consumers Energy Company, a Michigan corporation (“Consumers”), as
initial servicer (the “Servicer” and together with the Seller, the “Seller Parties”
and each a “Seller Party”), the entities party hereto from time to time as Conduits
(together with any of their respective successors and assigns hereunder, the “Conduits”),
the entities party hereto from time to time as Financial Institutions (together with any of their
respective successors and assigns hereunder, the “Financial Institutions”), the entities
party hereto from time to time as Managing Agents (together with any of their respective successors
and assigns hereunder, the “Managing Agents”) and JPMorgan Chase Bank, N.A.
(“JPMC”), as administrative agent for the Purchasers hereunder or any successor
administrative 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




          A. The Seller, the Servicer, Falcon and JPMC as a “Financial Institution” and as
“Administrative Agent,” are parties to the Receivables Purchase Agreement dated as of May 22, 2003
(as amended, restated, modified or supplemented prior to the date hereto, the “Original
RPA”) pursuant to which, among other things, the Seller transferred and assigned to the
Purchasers, and the Purchasers purchased from the Seller, Purchaser Interests from time to time.




          B. Pursuant to this Agreement, Falcon will assign a portion of its Purchaser Interests, and
JPMC will assign a portion of its Commitment, to the New Purchasers.




          C. The Conduits may, in their absolute and sole discretion, continue to purchase Purchaser
Interests from the Seller from time to time.




          D. In the event that a Conduit declines to make any purchase of Purchaser Interests, the
Financial Institutions within such Conduit’s Purchaser Group shall, subject to the terms and
conditions of this Agreement, purchase such Purchaser Interests from time to time.




          E. Each Managing Agent has been requested and is willing to act as Managing Agent on behalf of
the Conduit and the Financial Institutions in its Purchaser Group in accordance with the terms
hereof.




          F. The parties hereto have agreed to amend and restate the Original RPA pursuant to the terms
and conditions of this Agreement.







1









 








          G. The amendment and restatement of the Original RPA pursuant to this Agreement shall have the
effect of a substitution of terms of the Original RPA, but will not have the effect of causing a
novation, refinancing or other repayment of the Aggregate Unpaids of the Seller under and as
defined in the Original RPA (hereinafter, the “Original Obligations”), which Original
Obligations shall remain outstanding and repayable pursuant to the terms of this Agreement.




ARTICLE I

PURCHASE ARRANGEMENTS




          Section 1.1 Purchase Facility.




          (a) Upon the terms and subject to the conditions hereof, the 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, each Conduit may, at its option,
instruct its related Managing Agent to purchase through the Administrative Agent on behalf of such
Conduit, or if any such Conduit shall decline to purchase, such related Managing Agent shall
purchase through the Administrative Agent, on behalf of the Financial Institutions in such
Conduit’s Purchaser Group, the Purchaser Interests from time to time in an aggregate amount not to
exceed the Group Purchase Limit for such Purchaser Group during the period from the date hereof to
but not including the Amortization Date.




          (b) The Seller may, upon at least 15 Business Days’ notice to the Administrative Agent and
each Managing Agent, terminate in whole or reduce in part, the Purchase Limit; provided,
that after giving effect to any such reduction and any amounts paid to reduce the Purchaser
Interest on such date, the Aggregate Capital shall not exceed the Purchase Limit. Any such partial
reduction shall be in a minimum amount of $5,000,000 or an integral multiple thereof. Any such
reduction shall, (x) reduce each Group Purchase Limit (and the corresponding Conduit Purchase
Limit(s)) hereunder ratably in accordance with each Purchaser Group’s Pro Rata Share and (y) reduce
each Financial Institution’s Commitment ratably within its Purchaser Group in accordance with each
Financial Institution’s Pro Rata Share.




          Section 1.2 Increases.




          (a) The Seller shall provide the Administrative Agent and each Managing 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”). 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 in the aggregate for all
Purchasers), 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.




          (b) Each Purchase Notice issued hereunder shall constitute a request by the Seller (i) for an
Incremental Purchase to be made ratably by each Purchaser Group, in accordance with the Pro Rata
Share of such Purchaser Group as among all Purchaser Groups (such Purchaser Group’s “Purchase
Allocation”) and (ii) that, unless the Seller shall cancel such Purchase Notice as hereinafter
provided, in the event a Conduit in any Purchaser Group shall






2









 







elect to purchase less than all of its Purchaser Group’s Purchase Allocation in connection
with such Incremental Purchase, the balance of such Purchase Allocation is to be made ratably by
each Financial Institution within such Purchaser Group, in accordance with the Pro Rata Share of
such Financial Institution as among all Financial Institutions within such Purchaser Group.




          (c) Following receipt of a Purchase Notice, each Managing Agent will determine whether the
Purchaser Group Conduit agrees to purchase the entire amount of its Purchaser Group’s Purchase
Allocation in connection with the Incremental Purchase. If any Conduit declines to make a proposed
purchase, the applicable Managing Agent shall promptly notify the Seller and the Seller may cancel
the Purchase Notice within one Business Day after receiving notice from such Managing Agent (but in
any event not later than 3:00 p.m. (New York time) on the Business Day prior to the requested date
of purchase) or, in the absence of such a cancellation, the balance of the Purchase Allocation for
such Purchaser Group shall be made by such Purchaser Group’s Financial Institutions ratably in
accordance with their Pro Rata Shares within such Purchaser Group.




          (d) On the date of each Incremental Purchase, upon satisfaction of the applicable conditions
precedent set forth in Article VI, each applicable Purchaser shall deposit to the account
of the Seller (or its designee) designated in the Purchase Notice, in immediately available funds,
no later than 12:00 noon (New York time), an amount equal to (i) in the case of a Conduit, the
Purchase Price of the Purchaser Interests such Conduit is then purchasing, up to the Purchase
Allocation of its Purchaser Group, and (ii) in the case of a Financial Institution, such Financial
Institution’s Pro Rata Share, as among all Financial Institutions in its Purchaser Group, of the
Purchase Price for the Purchase Allocation of its Purchaser Group to the extent such Purchase Price
is not then being paid by the Conduit in such Purchaser Group.




          Section 1.3 Decreases. The Seller shall provide the Administrative Agent and each
Managing 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 the Conduits and the Financial Institutions in accordance with the
amount of Capital (if any) owing to each Purchaser (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 Managing Agent or Purchaser they
shall be paid to such Managing Agent, for the account of such Managing Agent or its related
Purchaser, at such Managing Agent’s account as directed by such Managing Agent and such Managing
Agent shall promptly pay the applicable amount to the related Purchaser. If such amounts are
payable to the Administrative Agent, they shall be paid to the account as directed by the
Administrative Agent. All computations of Yield (other than






3









 







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.




ARTICLE II

PAYMENTS AND COLLECTIONS




          Section 2.1 Payments. Notwithstanding any limitation on recourse contained in this
Agreement, the Seller shall immediately pay to each Managing Agent when due, for its own account or
for the account of its related Purchasers, or to the Administrative Agent, as applicable, 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
the 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 the Seller receives
any Collections or is deemed to receive any Collections, the 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 the Seller for the exclusive benefit of the Purchasers, the Managing
Agents 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



4









 






     (ii) the 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 appropriate accounts 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 Servicer for 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,




     second, to the Managing Agents for the account of the Purchasers ratably to
the payment of all accrued and unpaid Yield,




     third, to the Managing Agents for the account of the Purchasers ratably to the payment
of all accrued and unpaid fees under the Fee Letter,




     fourth, to the Managing Agents for the account of the Purchasers 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 the Managing Agents for the account of the Purchasers 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, to each applicable Person for the ratable payment of all other unpaid
Obligations,




     seventh, to the Managing Agents for the account of the Purchasers 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
the 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 each Managing Agent’s account ratably in accordance with the Pro Rata Share of






5









 







such Managing Agent’s Purchaser Group, 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.




          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 the Seller and
not previously paid by the Seller in accordance with Section 2.1. On and after the
Amortization Date, the Servicer shall (i) remit to the each Managing Agent’s account ratably in
accordance with the Pro Rata Share of such Managing Agent’s Purchaser Group 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. All Collections received on and after the
Amortization Date shall be distributed by the Servicer (or the Administrative Agent) on each
Settlement Date and on such additional days as the Administrative Agent may elect (which election
shall be made by the Administrative Agent at the direction of any Managing Agent or Financial
Institution), in the following order of priority:





     first, to the Servicer 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,




     second, to the applicable Person to the reimbursement of the Administrative
Agent’s and each Managing Agent’s costs of collection and enforcement of this Agreement,




     third, to each Managing Agent for the benefit of the Purchasers for the ratable
payment of all accrued and unpaid fees under the Fee Letter and Yield,




     fourth, to each Managing Agent for the account of the applicable Purchasers,
to the ratable reduction of the Aggregate Capital (without regard to any Termination
Percentage),




     fifth, to each applicable Person for the ratable payment of all other unpaid
Obligations, and



6









 






     sixth, after the Aggregate Unpaids have been indefeasibly reduced to zero, to
Seller.



          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, the Managing Agents 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. The 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. The 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, the Seller shall pay to each Managing Agent for the account
of the applicable Purchasers (ratably according to the aggregate Purchaser Interests of the
Purchasers), within 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 each Managing Agent and 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, any Managing Agent 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.








7









 








ARTICLE III

CONDUIT FUNDING




          Section 3.1 Yield. The Seller shall pay Yield with respect to the Capital associated
with each Purchaser Interest of each Conduit for each day that any Capital in respect of such
Purchaser Interest is outstanding. Each Purchaser Interest funded substantially with Pooled
Commercial Paper will accrue Yield at the CP Rate for each day. Each Purchaser Interest that is
not funded substantially with Pooled Commercial Paper will accrue Yield as described in Article
IV.




          Section 3.2 Payments. On each Yield Payment Date, the Seller shall pay to each
Managing Agent for the benefit of the Conduit in such Managing Agent’s Purchaser Group an aggregate
amount equal to all accrued and unpaid Yield in respect of the Capital associated with all
Purchaser Interests of the related 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, each Managing Agent shall calculate its Purchaser
Group’s aggregate amount of Yield in respect of the Capital associated with all Purchaser Interests
of each related Conduit for the applicable Accrual Period and shall notify the Seller of such
amount.




ARTICLE IV

FINANCIAL INSTITUTION FUNDING




          Section 4.1 Financial Institution Funding. Each Purchaser Interest funded by 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 the
Seller gives notice to the applicable Managing 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 any
Financial Institution acquires by assignment from the Conduit in its Purchaser Group all or any
portion of such Conduit’s Purchaser Interest (or an undivided interest therein) or otherwise funds
such Purchaser Interest pursuant to such Conduit’s Liquidity Agreement, such Purchaser Interest so
assigned or funded shall each be deemed to have a new Tranche Period commencing on the date of any
such assignment or funding.




          Section 4.2 Yield Payments. On each Yield Payment Date for each Purchaser Interest of
the Financial Institutions, the Seller shall pay to each Managing Agent for the benefit of the
Financial Institutions in its Purchaser Group 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 each related Managing Agent, the
Seller shall from time to time request Tranche Periods for the Purchaser Interests funded, directly
or indirectly, by the Financial Institutions, provided that, (i) if at any time the Financial
Institutions shall have a Purchaser Interest, the Seller shall always request






8









 







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.




          (b) The Seller, upon notice to and consultation with the Managing Agents 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 such Conduit’s
ability to accommodate such division or combination), provided, that in no event may a
Purchaser Interest funded by Pooled Commercial Paper issued by a Conduit be combined with a
Purchaser Interest funded by any Financial Institution.




          Section 4.4 Financial Institution Bank Rates. The Seller may select the LIBO Rate or
the Alternate Base Rate for each Purchaser Interest funded by the Financial Institutions. The
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 Alternate Base Rate is being requested as a new Bank Rate, give
each applicable Managing Agent irrevocable notice of the new Bank Rate for the Purchaser Interest
associated with such Terminating Tranche. Until the Seller gives notice to such applicable
Managing Agent of another Bank Rate, the initial Bank Rate for any Purchaser Interest transferred
to or otherwise funded by any Financial Institution pursuant to the terms and conditions hereof
shall be the Alternate Base Rate.




          Section 4.5 Suspension of the LIBO Rate.




          (a) If any Financial Institution notifies its related Managing Agent that it has determined
that funding its Pro Rata Share of the Purchaser Interests 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 such
Managing Agent shall notify the Administrative Agent and shall suspend the availability of such
LIBO Rate for the Financial Institutions in such Managing Agent’s Purchaser Group and select the
Alternate Base Rate for any Purchaser Interest accruing Yield at such LIBO Rate, and the then
current Tranche Period for any Purchaser Interest funded by a Financial Institution in such
Managing Agent’s Purchaser Group shall thereupon be terminated and a new Tranche Period based upon
the Alternate Base Rate shall commence.




          (b) If less than all of the Managing Agents give a notice to the Administrative Agent pursuant
to Section 4.5(a), the Financial Institution in the Purchaser Group which gave such a
notice shall be obligated, at the request of the Seller or the related Conduit in such Purchaser
Group, to assign all of its rights and obligations hereunder to (i) another Financial Institution
or (ii) another funding entity nominated by the Seller or its related Managing Agent that is
acceptable to the related Conduit and willing to participate in this Agreement and the






9









 







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
Purchasers 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 such Financial Institution, and (ii) the
replacement Financial Institution otherwise satisfies the requirements of Section 12.1(b).




          Section 4.6 Liquidity Agreement Fundings. The parties hereto acknowledge that a
Conduit may borrow against or put all or any portion of its Purchaser Interests to the Financial
Institutions in its Purchaser Group at any time pursuant to such Conduit’s related Liquidity
Agreement to finance or refinance the necessary portion of its Purchaser Interests through a
funding under such Liquidity Agreement to the extent available. The fundings under such Liquidity
Agreement will accrue interest at the Bank Rate in accordance with this Article IV.
Regardless of whether a funding of Purchaser Interests by any Financial Institution constitutes the
direct purchase of a Purchaser Interest hereunder, an assignment under the related Liquidity
Agreement of a Purchaser Interest originally funded by a Conduit, the sale of one or more
participations under the related Liquidity Agreement in a Purchaser Interest originally funded by a
Conduit or a loan made under a Liquidity Agreement in respect of a Conduit’s Purchaser Interest,
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 the 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, the Managing Agents 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. The 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 the
Seller, the 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






10









 







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.




          (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, 2009, 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, any Managing Agent or any 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, any Managing Agent or any Purchaser 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






11









 







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, the 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 under the UCC
(or any comparable law) of all appropriate jurisdictions to perfect the 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 Purchasers (and the Administrative Agent for the
benefit of such Purchasers shall acquire from the 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. The 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
the Seller at each Collection Bank and the special zip code number of each Lock-Box, are listed on
Exhibit IV. The 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, 2009, 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)
the Seller represents and warrants that since December 31, 2009, no event has occurred that would
have a material adverse effect on (A) the financial condition or operations of the Seller,






12









 







(B) the ability of the 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. The Seller has not used any names, trade names or assumed names other than
the name in which it has executed this Agreement.




          (o) Ownership of Seller. Consumers owns, directly or indirectly, 100% of the issued
and outstanding membership interests of the Seller, free and clear of any Adverse Claim. There are
no options, warrants or other rights to acquire securities of the 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 Originator. With respect to each Receivable transferred to the Seller
under the Receivables Sale Agreement, the Seller has given reasonably equivalent value to the
Originator in consideration therefor and such transfer was not made for or on account of an
antecedent debt. No transfer by the Originator of any Receivable under the Receivables 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).







13









 








          (u) Eligible Receivables. Each Receivable included in the Net Receivables Balance as
an Eligible Receivable on the date of its purchase under the Receivables Sale Agreement was an
Eligible Receivable on such purchase date.




          (v) Net Receivables Balance. The 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, as to itself, to the Administrative Agent, the Managing
Agent of its Purchaser Group and the Conduit in its Purchaser Group 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 Effectiveness of this Agreement. This Agreement
shall become effective as of the date hereof upon the Administrative Agent and each Managing Agent
receiving, in form and substance reasonably satisfactory to each such Person,






14









 







on or before the date hereof (i) the satisfactory report of the Administrative Agent’s
auditors; (ii) those documents listed on Schedule B; (iii) a Monthly Report covering the
immediately preceding 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 the Originator 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 and each Managing Agent on or
prior to the date of such purchase, in form and substance satisfactory to the Administrative Agent
and each Managing Agent, all Monthly Reports as and when due under Section 8.5 and upon the
Administrative Agent’s or any Managing Agent’s request; (b) upon the Administrative Agent’s or any
Managing Agent’s reasonable request, the Servicer shall have delivered to the Administrative Agent
and each Managing 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 and each Managing Agent shall have received such other approvals, opinions or documents as it
may reasonably request if the Administrative Agent or any Managing 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 the 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;




     (iii) the Capital owing to each Purchaser does not exceed the Conduit Purchase Limit
(in the case of a Conduit) or Commitment (in the case of a Financial Institution); and




     (iv) 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 Managing Agent, 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 the Seller to satisfy any of the foregoing






15









 







conditions precedent in respect of such Reinvestment. The failure of the 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 or any Managing Agent, to rescind the related Reinvestment and direct the Seller to pay to
the Managing Agents 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.




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, each Managing Agent and each
Financial Institution:





     (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 or any Managing Agent), together with a certificate of such
accounting firm addressed to the Administrative Agent and each Managing 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 the 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.




16











 






     (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 the 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.




     (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 any Managing Agent, 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 each Managing 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 or any Managing



17









 







Agent may from time to time reasonably request in order to protect the interests of the
Administrative Agent, any Managing Agent or any Purchaser 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).



          (b) Notices. Such Seller Party will notify the Administrative Agent, each Managing
Agent and each Financial Institution 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 the 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 the Seller is a debtor or an obligor.




     (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.




     (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.




     (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).



18









 






     (ix) Appointment of Independent Manager. The decision to appoint a new
manager of the Seller as the “Independent Manager” for purposes of this Agreement, such
notice to be issued not less than ten (10) days prior to the effective date of such
appointment and to certify that the designated Person satisfies the criteria set forth in
the definition herein of “Independent Manager.



          (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.




          (d) Audits. Such Seller Party will furnish to the Administrative Agent, each Managing
Agent and each Financial Institution from time to time such information with respect to it and the
Receivables as the Administrative Agent, any Managing Agent or any Financial Institution may
reasonably request. Such Seller Party will, from time to time during regular business hours as
requested by the Administrative Agent, any Managing Agent or any Financial Institution upon
reasonable notice permit the Administrative Agent, such Managing Agent or such Financial
Institution, or any of their respective agents or representatives (and shall cause the Originator
to permit the Administrative Agent, any Managing Agent or any Financial Institution or any of their
respective agents or representatives), to (i) 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 (A) during a Level One
Enhancement Period, not more than one such audit per year, (B) during a Level Two Enhancement
Period, not more than two such audits per year and (C) 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 the Originator 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



19









 







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 Originator to) give the Administrative Agent and each Managing 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 the Originator 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 or any Managing 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.



          (f) Compliance with Contracts and Credit and Collection Policy. Such Seller Party
will (and will cause the Originator 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 Receivables Sale Agreement. The Seller will, and
will require the Originator to, perform each of their respective obligations and undertakings under
and pursuant to the Receivables Sale Agreement, will purchase Receivables thereunder in compliance
with the terms thereof and will enforce the rights and remedies accorded to the Seller under the
Receivables Sale Agreement. The 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 the Seller) under the Receivables Sale Agreement as the Administrative Agent, any Managing Agent
or any Financial Institution 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 Receivables Sale Agreement.




          (h) Ownership. The Seller will (or will cause the Originator to) take all necessary
action to (i) vest legal and equitable title to the Receivables, the Related Security and the
Collections purchased under the Receivables Sale Agreement irrevocably in Seller, free and clear of
any Adverse Claims other than Adverse Claims in favor of the Administrative Agent, the Managing
Agents 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 the Seller’s interest in such
Receivables, Related Security and Collections and such other action to perfect, protect or more





20









 







fully evidence the interest of the Seller therein as the Administrative Agent or any Managing
Agent may reasonably request), and (ii) establish and maintain, in favor of the Administrative
Agent, for the benefit of the Managing Agents and 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 Managing Agents 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 the Administrative Agent’s (for the benefit of the Managing Agents and 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
Managing Agents and the Purchasers as the Administrative Agent or any Managing Agent may reasonably
request).




          (i) Purchasers’ Reliance. The Seller acknowledges that the Purchasers are entering
into the transactions contemplated by this Agreement in reliance upon the 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, any Managing Agent or any Purchaser may from time to time reasonably request,
to maintain the Seller’s identity as a separate legal entity and to make it manifest to third
parties that the 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, the Seller will:





     (i) conduct its own business in its own name and require that all full-time
employees of the 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 the
Seller’s employees);




     (ii) compensate all employees, consultants and agents directly, from Seller’s
own funds, for services provided to the Seller by such employees, consultants and
agents and, to the extent any employee, consultant or agent of the Seller is also an
employee, consultant or agent of any CMS Entity, allocate the compensation of such
employee, consultant or agent between the Seller and such CMS Entity, as applicable,
on a basis that reflects the services rendered to the Seller and such CMS Entity, as
applicable;




     (iii) maintain separate offices and, if such office is located in the offices
of any CMS Entity, the 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



21









 







arm’s-length basis, allocate all overhead expenses for items shared between the
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 the Seller or (C) the initiation of, participation in, acquiescence
in or consent to any bankruptcy, insolvency, reorganization or similar proceeding
involving the Seller, are duly authorized by unanimous vote of its Managers
(including the Independent Manager);




     (viii) maintain the 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 Commission or any other
governmental agency have notes clearly stating that the Seller is a separate
corporate entity and that its assets will be available first and foremost to satisfy
the claims of the creditors of the 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 the Seller or Servicer makes deposits
and from which only the Seller or Servicer (or the Administrative Agent hereunder)
has the power to make withdrawals;




     (xi) pay all of the Seller’s operating expenses from the 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;




     (xiii) take such other actions as are necessary on its part to ensure that the
facts and assumptions set forth in the opinion dated May 22, 2003 and issued by
Skadden, Arps, Slate, Meagher & Flom, LLP, as counsel for the Seller, in connection
with the Original RPA and relating to substantive consolidation issues,



22









 







and in the certificates accompanying such opinion, remain true and correct in
all material respects at all times; and




     (xiv) maintain its Certificate of Formation and Limited Liability Company
Agreement in conformity with this Agreement, such that it does not amend, restate,
supplement or otherwise modify its Certificate of Formation or Limited Liability
Company Agreement 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.



          (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 the Seller, the 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, the Seller will itself hold
or, if applicable, will cause such payments to be held in trust for the exclusive benefit of the
Administrative Agent, the Managing Agents and the Purchasers. The 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 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. The 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. The 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 any Conduit, the
Administrative Agent or any Financial Institution. The Servicer will pay and discharge before the
same shall become delinquent, all taxes and governmental charges imposed upon it or its property,
provided that the 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.






23









 








          (l) Insurance. The Seller will maintain in effect, or cause to be maintained in
effect, at the Seller’s own expense, such casualty and liability insurance as the Seller shall deem
appropriate in its good faith business judgment.




          (m) Payment to Originator. With respect to any Receivable purchased by the Seller
from the Originator, such sale shall be effected under, and in compliance with the terms of, the
Receivables Sale Agreement, including, without limitation, the terms
relating to the method of payment and amount and timing of payments to be made to the Originator in
respect of the purchase price for such Receivable.




          (n) Restrictions on Activities. The 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 Receivables Sale
Agreement; 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 Receivables Sale Agreement, to make payment to the
Originator thereunder for the purchase of Receivables under the Receivables 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. The 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 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 Receivables Sale Agreement. The Seller will maintain the
effectiveness of, and continue to perform under the Receivables Sale Agreement, such that it does
not amend, restate, supplement, cancel, terminate or otherwise modify the Receivables Sale
Agreement, or give any consent, waiver, directive or approval thereunder or waive any default,
action, omission or breach under the Receivables Sale Agreement or otherwise grant any indulgence
thereunder, without (in each case) the prior written consent of the Administrative Agent, each
Managing Agent and each Financial Institution.




          (q) Maintenance of Required Capital Amount. The 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. The 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.






24









 








          (s) Financing Statements for Supplement Indentures. The 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.




          (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 and each Managing Agent
that it has made diligent inquiry and that the accounts receivable included in such report as
Receivables are identified on the books and records of the Originator and the Seller with the
account code “Account 1460000 Customer Receivables” or “Account 1460201 — A/R Other”.




          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. The Seller will not (and will not permit the
Originator 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 the Seller notifies the
Administrative Agent and each Managing Agent thereof and delivers to the Administrative Agent and
each Managing Agent such financing statements (Forms UCC-1 and UCC-3) authorized or executed by the
Seller (if required under applicable law) which the Administrative Agent or any Managing 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 or any Managing
Agent may reasonably request in connection therewith and has taken all other steps to ensure that
the Administrative Agent, for the benefit of itself, the Managing Agents 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, any
Managing Agent or any 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
Originator’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





25









 







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 the Originator 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 the
Originator 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. The 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, the Managing Agents and the Purchasers
provided for herein), and the Seller will defend the right, title and interest of the
Administrative Agent, the Managing Agents and the Purchasers in, to and under any of the foregoing
property, against all claims of third parties claiming through or under the Seller or the
Originator. The 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.




          (e) Net Receivables Balance. At no time prior to the Amortization Date shall the
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. The Seller will not designate the Termination
Date (as defined in the Receivables Sale Agreement), or send any written notice to Originator in
respect thereof, without the prior written consent of the Administrative Agent, each Managing Agent
and each Financial Institution, 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,
the Seller will not make any Restricted Junior Payment if, after giving effect thereto, the 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


26









 







Seller Party will not, and will not permit the Originator 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, each
Managing Agent and each Financial Institution, the 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, and shall, at the direction of the Required Financial Institutions, at any time designate as
the Servicer any Person to succeed Consumers or any successor Servicer.




          (b) Without the prior written consent of the Administrative Agent, each Managing Agent and the
Required Financial Institutions, Consumers shall not be permitted to delegate any of its duties or
responsibilities as the Servicer to any Person other than (i) the Seller and (ii) with respect to
certain delinquent Receivables, outside collection agencies in accordance with its customary
practices. The 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 the Servicer any Person other than Consumers, all duties
and responsibilities theretofore delegated by Consumers to the Seller may, at the discretion of the
Administrative Agent and shall, at the direction of the Required Financial Institutions, be
terminated forthwith on notice given by the Administrative Agent to Consumers and to the Seller.




          (c) Notwithstanding any delegation by Consumers pursuant to the foregoing subsection (b), (i)
Consumers shall be and remain primarily liable to the Administrative Agent, the Managing Agents and
the Purchasers for the full and prompt performance of all duties and responsibilities of the
Servicer hereunder and (ii) the Administrative Agent, the Managing Agents 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, the Managing Agents and
the Purchasers shall not be required to give notice, demand or other communication to any Person
other than Consumers in order for


27









 







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 the 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.




          (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


28









 







Receivable or Charged-Off Receivable or limit the rights of the Administrative Agent, the
Managing Agents 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 the 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 the 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 the Originator or
the 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. The 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 the 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. The
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 the 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 the
Seller.




          Section 8.4 Responsibilities of Seller. Anything herein to the contrary
notwithstanding, the exercise by the Administrative Agent, any Managing Agent or any Purchaser of
its rights hereunder shall not release the Servicer, the Originator or the Seller from any of their
duties or obligations with respect to any Receivables or under the related Contracts. None of the
Administrative Agent, the Managing Agents or 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 the Seller.






29









 








          Section 8.5 Reports. The Servicer shall prepare and forward to the Administrative
Agent, each Managing Agent and each Financial Institution (i) on the twelfth (12th) Business Day of
each month and at such times as the Administrative Agent, any Managing Agent or any Financial
Institution 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 and each Managing 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, any Managing Agent or any Financial Institution shall reasonably request, an
aging of Receivables.




          Section 8.6 Servicing Fees. In consideration of Consumers’ agreement to act as the
Servicer hereunder, the Purchasers hereby agree that, so long as Consumers shall continue to
perform as the Servicer hereunder, the 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) 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 (m)) 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 the 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
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


30









 







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 “default” under the 1945 Indenture 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) The 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 1.75%, or




     (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 2.5%, or




     (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) 12.0% for any Accrual Period occurring in May
through November of any calendar year or (B) 8.5% for any Accrual Period occurring in
December through April of any calendar year, or




     (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 the 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.






31









 








          (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 the Seller under the Receivables Sale Agreement.




          (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
the Seller, or the Administrative Agent for the benefit of the Managing Agents and 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) 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.




          (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 or any Managing Agent, has an adverse effect on the Administrative
Agent’s, Managing Agent’s or the Purchasers’ interests under this Agreement.




          (m) Any Person shall be appointed as an Independent Manager of the Seller without prior notice
thereof having been given to the Administrative Agent and each Managing Agent in accordance with
Section 7.1(b)(ix) or without the written acknowledgement by the Administrative Agent and
each Managing Agent that such Person conforms, to the reasonable satisfaction of the Administrative
Agent and each Managing Agent, with the criteria set forth in the definition herein of “Independent
Manager.”




          Section 9.2 Remedies. Upon the occurrence and during the continuation of an
Amortization Event, the Administrative Agent may, or upon the direction of any Managing Agent or
any Financial Institution shall, take any of the following actions: (i) replace the Person then
acting as the 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, the Managing Agents 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.







32









 








ARTICLE X

INDEMNIFICATION




          Section 10.1 Indemnities by the Seller. Without limiting any other rights that the
Administrative Agent, any Managing Agent or any Purchaser may have hereunder or under applicable
law, the Seller hereby agrees to indemnify (and pay upon demand to) the Administrative Agent, each
Managing 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, such Managing 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 the 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 the Seller or limit the recourse of any Indemnified Party to the Seller for amounts
otherwise specifically provided to be paid by the 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, the 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 the 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 the Seller or the Originator (or any
officers of any such Person) under or in connection with this Agreement, any other



33









 







Transaction Document or any other written information or report delivered by any such
Person pursuant hereto or thereto, which shall have been false or incorrect when made or
deemed made;




     (iii) the failure by the Seller or the 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 the Seller, the Administrative Agent, the Managing Agents or the
Purchasers in whole or in part, or any failure of the Originator to keep or perform any of
its obligations, express or implied, with respect to any Contract;




     (iv) any failure of the Seller or the 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, a Managing Agent 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 the
Seller or the Originator in which any Indemnified Party becomes involved as a result of any
of the transactions contemplated hereby, provided that the 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;



34









 






     (x) any Amortization Event described in Section 9.1(d);




     (xi) any failure of the 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 Originator, free and clear of any Adverse Claim (other than as created
hereunder); or any failure of the Seller to give reasonably equivalent value to the
Originator under the Receivables Sale Agreement in consideration of the transfer by the
Originator 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 Managing Agents and the Purchasers, or to transfer to the Administrative
Agent for the benefit of the Managing Agents and 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 the 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, the Managing Agents 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





35











 




cause the Receivables to be uncollectible or unenforceable by Seller, the Administrative
Agent, the Managing Agents or the Purchasers in whole or in part;




          (c) any failure of the 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 the 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, the Managing Agents 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.




          (a) If any Regulatory Change (i) 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) imposes, modifies or deems applicable any reserve, assessment, fee, tax,
insurance charge, special deposit or similar requirement against assets of, deposits with or for
the account of, or liabilities of a Funding Source, or credit extended by a Funding Source pursuant
to a Funding Agreement or (iii) 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
rate of return on a Funding Source’s capital as a consequence of 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
such related Managing 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 the Seller, the Seller shall pay
to such Managing Agent, for the 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. The term “Regulatory Change” shall mean (i) the adoption after the
date hereof




36









 







of any applicable law, rule or regulation (including any applicable law, rule or regulation
regarding capital adequacy) or any change therein after the date hereof, (ii) any change after the
date hereof in the interpretation or administration thereof by any governmental authority, central
bank or 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,
central bank or comparable agency, or (iii) the compliance, whether commenced prior to or after the
date hereof, by any Funding Source with the final rule titled Risk-Based Capital Guidelines;
Capital Adequacy Guidelines; Capital Maintenance: Regulatory Capital; Impact of Modifications to
Generally Accepted Accounting Principles; Consolidation of Asset-Backed Commercial Paper Programs;
and Other Related Issues, adopted by the United States bank regulatory agencies on December 15,
2009 (the “FAS 166/167 Capital Guidelines”), or any existing or future guidance,
interpretations or directives from the U.S. bank regulatory agencies relating to the FAS 166/167
Capital Guidelines (whether or not having the force of law), or any rules or regulations
promulgated in connection therewith by any U.S. bank regulatory agency.




          (b) A certificate of the applicable Purchaser or Funding Source setting forth the amount or
amounts necessary to compensate such Purchaser or Funding Source pursuant to paragraph (a) of this
Section 10.3 shall be delivered to the Seller and shall be conclusive absent manifest
error.




          Section 10.4 Other Costs and Expenses. The Seller shall pay to the Administrative
Agent, each Managing Agent and each Purchaser 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 such Person’s auditors auditing the books,
records and procedures of the Seller, reasonable fees and out-of-pocket expenses of legal counsel
for such Person (which such counsel may be employees of such Person) with respect thereto and with
respect to advising such Person as to their respective rights and remedies under this Agreement.
The Seller shall pay to the Administrative Agent or each Managing Agent, as applicable (for the
account of the Administrative Agent, the Managing Agents and the Purchasers, as applicable) on
demand any and all reasonable costs and expenses of the Administrative Agent, the Managing Agents
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.




          Section 10.5 Accounting Based Consolidation Event.




          Upon demand by the Administrative Agent or the applicable Managing Agent, the Seller shall pay
to the Administrative Agent or such applicable Managing Agent, for the benefit of the relevant
Funding Source, such amounts as such Funding Source reasonably determines will compensate or
reimburse such Funding Source for any (i) fee, expense or increased cost charged to, incurred or
otherwise suffered by such Funding Source, (ii) reduction in the rate of return on such Funding
Source’s capital or reduction in the amount of any sum received or
receivable by such Funding Source or (iii) internal capital charge or other imputed cost
determined by such Funding Source to be allocable to the Seller or the transactions contemplated



37









 






in
this Agreement, in each case resulting from or in connection with the consolidation, for financial
and/or regulatory accounting purposes, of all or any portion of the assets and liabilities of any
Conduit that are subject to this Agreement or any other Transaction Document with all or any
portion of the assets and liabilities of an Funding Source. 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 Conduit or by any Funding Source.




ARTICLE XI

THE AGENT




          Section 11.1 Authorization and Action. Each Purchaser hereby (i) designates and
appoints JPMC to act as its administrative agent hereunder and under each other Transaction
Document, (ii) designates and appoints its related Managing Agent as its managing agent, and (iii)
authorizes the Administrative Agent and such Managing Agent to take such actions as agent on its
behalf and to exercise such powers as are delegated to the Administrative Agent or the Managing
Agent, as applicable, by the terms of this Agreement and the other Transaction Documents together
with such powers as are reasonably incidental thereto. Neither the Administrative Agent nor any
Managing Agent shall 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 or any Managing Agent shall be read into this Agreement or any other
Transaction Document or otherwise exist for the Administrative Agent or any Managing Agent. In
performing its functions and duties hereunder and under the other Transaction Documents, the
Administrative Agent and each Managing Agent shall act solely as agent for the Purchasers
designating such agent 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. Neither the Administrative Agent nor any Managing Agent shall be required
to take any action that exposes the such Person 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 and the Managing Agents 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). Each Purchaser hereby
authorizes its related Managing Agent to execute the Fee Letter on behalf of such Purchaser (the
terms of which shall be binding on such Purchaser).




          Section 11.2 Delegation of Duties. The Administrative Agent and the Managing Agents
may execute any of their respective 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. Neither the Administrative Agent nor any Managing Agent shall
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. None of the Administrative Agent, the Managing
Agents, or any of their respective directors, officers, agents or employees shall be (i)



38









 






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. Neither the Administrative Agent nor any Managing Agent
shall 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. Neither the Administrative Agent nor any Managing Agent shall be deemed to have knowledge
of any Amortization Event or Potential Amortization Event unless the Administrative Agent or such
Managing Agent, as applicable, has received notice of such Amortization Event or Potential
Amortization Event from the Seller or a Purchaser. No Managing Agent shall have any responsibility
hereunder to any Purchaser other than the Purchasers in its Purchaser Group.




          Section 11.4 Reliance by the Administrative Agent and the Managing Agents. The
Administrative Agent and the Managing Agents 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 the Seller), independent
accountants and other experts selected by the Administrative Agent or any Managing Agent. Each of
the Administrative Agent and each Managing 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 the related Purchaser Group 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 or such Managing Agent shall have received such advice, the
Administrative Agent or such Managing Agent may take or refrain from taking any action, as the
Administrative Agent or such Managing Agent shall deem advisable and in the best interests of the
Purchasers. The Administrative Agent and the Managing Agents shall in all cases be fully protected
in acting, or in refraining from acting, in accordance with a request of its related Purchaser
Group 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, the Managing Agents and Other
Purchasers.




          (a) Each Purchaser expressly acknowledges that none of the Administrative Agent, the Managing
Agents, or any of their respective officers, directors, employees, agents,



39









 






attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by the Administrative
Agent or any Managing 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 or such Managing Agent. Each Purchaser represents and warrants to the
Administrative Agent and the Managing Agents that it has and will, independently and without
reliance upon the Administrative Agent, any Managing 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 the 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 or any Managing 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.




          Section 11.6 Reimbursement and Indemnification. The Financial Institutions agree to
reimburse and indemnify the Administrative Agent and the Financial Institutions in each Purchaser
Group agree to reimburse and indemnify the Managing Agent for such Purchaser Group, and their
respective 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 or such Managing Agent, acting in its capacity as the Administrative
Agent or a Managing 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, or any Managing Agent, acting in its capacity as a Managing Agent and acting on behalf of
its related Purchasers, in connection with the administration and enforcement of this Agreement and
the other Transaction Documents.




          Section 11.7 Administrative Agent and Managing Agents in their Individual Capacity.
The Administrative Agent, each Managing Agent and each of their respective Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with the Seller or any
Affiliate of the Seller as though it were not the Administrative Agent or a Managing Agent
hereunder. With respect to the acquisition of Purchaser Interests pursuant to
this Agreement, the Administrative Agent and each Managing 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 or a Managing Agent, and the terms
“Financial Institution,” “Purchaser,” “Financial Institutions” and
“Purchasers” shall include the Administrative Agent or such Managing Agent in its
individual capacity, as applicable.




40









 








          Section 11.8 Successor Administrative Agent. The Administrative Agent may, upon five
(5) days’ notice to the 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 administrative 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
taken by it while it was Administrative Agent under this Agreement and under the other Transaction
Documents.




          Section 11.9 Successor Managing Agent. A Managing Agent may, upon five- days’ notice
to the Seller, the Administrative Agent and the Purchasers in its Purchaser Group, and a Managing
Agent will, upon the direction of all of the Purchasers in such Managing Agent’s Purchaser Group
(other than such Managing Agent, in its individual capacity) resign as Managing Agent. If a
Managing Agent shall resign, then the Financial Institutions in such Purchaser Group during such
five-day period shall appoint from among such Financial Institutions a successor Managing Agent.
If for any reason no successor Managing Agent is appointed by such Financial Institutions during
such five-day period, then effective upon the termination of such five-day period, the Purchasers
in such Purchaser Group shall perform all of the duties of the resigning Managing Agent hereunder
and under the other Transaction Documents and the Seller, the Servicer and the Administrative Agent
(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 such Purchasers. After the
effectiveness of any retiring Managing Agent’s resignation hereunder, the retiring Managing 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 taken by it while it was
a Managing Agent under this Agreement and under the other Transaction Documents.




ARTICLE XII

ASSIGNMENTS; PARTICIPATIONS




          Section 12.1 Assignments.




          (a) The Seller and each Financial Institution hereby agree and consent to the complete or
partial assignment by a Conduit of all or any portion of its rights under, interest in, title to
and obligations under this Agreement (i) to the Financial Institutions in such Conduit’s Purchaser
Group pursuant to this Agreement or pursuant to a Liquidity Agreement, (ii) to any other issuer of
commercial paper notes sponsored or administered by a Financial Institution or



41









 






(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, the parties hereto hereby
agree that any assignee of a Conduit of this Agreement or all or any of the Purchaser Interests of
any 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 such Conduit hereunder. Neither the 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 the Conduit in such Financial Institution’s Purchaser Group 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 or delayed) 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 the Seller; provided that
if the Affected Financial Institution is not a Financial Institution or Managing Agent on the date
hereof or an Affiliate of such Person, the applicable Managing Agent agrees to use reasonable
efforts to choose an assignee of such Affected Financial Institution that is acceptable to the
Seller; provided further however, that if such Managing Agent and the
Seller do not agree on such an assignee within ten (10) Business Days after such Affected Financial
Institution becomes an Affected Financial Institution, such Managing 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 related Managing
Agent, promptly following any request therefor by the Managing Agent for its Purchaser Group or the
affected Conduit, an enforceability opinion in form and substance satisfactory to such Managing
Agent and such Conduit. Upon delivery of the executed Assignment Agreement to the related Managing
Agent and the Administrative Agent, such selling Financial Institution 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 the Seller, the
Purchasers, the Managing Agents 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 the
Conduit in such Financial Institution’s Purchaser Group or the applicable Managing Agent, to



42









 






assign
all of its rights and obligations hereunder to (x) another Financial Institution or (y) another
funding entity nominated by such Managing Agent and acceptable to such affected 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 such Financial Institutions 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 the Seller,
the Conduits, the Managing Agents 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 Additional Purchaser Groups. Upon the Seller’s request with written
consent of the Administrative Agent and each Managing Agent, an additional Purchaser Group may be
added to this Agreement at any time by the execution and delivery of a Joinder Agreement by the
members of such proposed additional Purchaser Group, the Seller, the Servicer, the Administrative
Agent and each Managing Agent. Upon the effective date of such Joinder Agreement, (i) each Person
specified therein as a “Conduit” shall become a party hereto as a Conduit, entitled to the rights
and subject to the obligations of a Conduit hereunder, (ii) each Person specified therein as a
“Financial Institution” shall become a party hereto as a Financial Institution, entitled to the
rights and subject to the obligations of a Financial Institution hereunder, (iii) each Person
specified therein as a “Managing Agent” shall become a party hereto as a Managing Agent, entitled
to the rights and subject to the obligations of a Managing Agent hereunder and (iv) the Purchase
Limit shall be increased by an amount equal to the aggregate Commitments of the Financial
Institutions party to such Joinder Agreement.




          Section 12.4 Extension of Liquidity Termination Date. The Seller may advise the
Administrative Agent and each Managing 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. Each
Managing Agent, upon being so advised by the Seller, shall promptly notify each
Financial Institution in such Managing Agent’s Purchaser Group of any such request and each
such Financial Institution shall notify the Administrative Agent, its related Managing 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



43









 






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, its related Managing 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 related Managing Agents and the 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, the related Managing Agents 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 12.5 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, 2.4 and 2.5) 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.




          Section 12.6 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 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.




          Section 12.7 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



44









 






such Financial Institution to a Federal Reserve Bank, without notice to or consent of the Seller
or the Administrative Agent or any other Person; 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.




          Section 12.8 Closing Date Assignments.




          (a) On the date hereof, (i) Falcon hereby assigns to Victory Receivables Corporation,
$100,000,000 of its Purchase Limit and (ii) JPMC hereby assigns to Union Bank, N.A., $100,000,000
of its Commitment, such that after giving effect to such assignments, each of the Purchasers party
hereto on the date hereof have the respective amounts of the Conduit Purchase Limit or Commitment,
as applicable, as set forth on Schedule A hereto. All accrued fees due to Falcon and JPMC
through the date hereof shall be paid to the Administrative Agent for the benefit of Falcon and
JPMC by the Seller on the Settlement Date in December of 2010.




          (b) Each of Falcon, JPMC and each New Purchaser hereby confirms to and agrees with each other,
the Administrative Agent and each Managing Agent hereto as follows: (i) other than the
representation and warranty that it has not created any Adverse Claim upon any interest being
transferred hereunder, neither Falcon nor JPMC makes any representation or warranty or assumes any
responsibility with respect to any statements, warranties or representations made by any other
Person in or in connection with this Agreement or the Transaction Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of Purchaser Interests, this
Agreement or any other instrument or document furnished pursuant thereto or the perfection,
priority, condition, value or sufficiency of any collateral; (ii) neither Falcon nor JPMC makes any
representation or warranty or assumes any responsibility with respect to the financial condition of
the Seller, any Obligor, the Servicer, the Originator, Consumers, any Affiliate of the Seller or
the performance or observance by the Seller, any Obligor, the Servicer, the Originator, any
Affiliate of the Seller of any of their respective obligations under the Transaction Documents or
any other instrument or document furnished pursuant thereto or in connection therewith; (iii) each
New Purchaser confirms that it has received a copy of this Agreement and copies of such other
Transaction Documents, and other documents and information as it has requested and deemed
appropriate to make its own credit analysis and decision to enter into this Agreement; and (iv)
each New Purchaser will, independently and without reliance upon the Administrative Agent, any
Managing Agent, any Purchaser or the Seller and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the Transaction Documents.




ARTICLE XIII

MISCELLANEOUS




          Section 13.1 Waivers and Amendments.




          (a) No failure or delay on the part of the Administrative Agent, any Managing 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



45









 






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). The 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:





     (i) without the consent of each 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 any Managing 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 a 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 the 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,” “Net
Receivables Balance,” “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;




     (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; or




     (iii) without the written consent of each Managing Agent, amend, modify or waive any
provision of this Agreement if the effect thereof is to affect the rights or duties of such
Managing 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 the Seller, the Servicer, the Purchasers, the
Managing Agents 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



46









 






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. The Seller and the Servicer hereby authorize each Managing
Agent to effect purchases and each Managing Agent to make Tranche Period and Bank Rate selections
based on telephonic notices made by any Person whom such Managing Agent in good faith believes to
be acting on behalf of the Seller. The Seller agrees to deliver promptly to the applicable
Managing Agent a written confirmation of each telephonic notice signed by an authorized officer of
the 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 such
Managing Agent, the records of such Managing Agent shall govern absent manifest error.




          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, 10.4 or 10.5) 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) The 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 or any Managing Agent may request, to perfect, protect or more fully
evidence the Purchaser Interests, or to enable the Administrative Agent, the Managing Agents 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 the Seller or the Servicer to, notify the Obligors of
Receivables, at the 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. The 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, any Managing 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, such Managing 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 to (i) execute on behalf of the Seller as
debtor and to file financing statements necessary or desirable in the Administrative Agent’s sole




47









 





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) 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 party hereto 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 each other party 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 party and its officers and employees may disclose such information to such
party’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 Managing Agent and 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
Managing Agents, the Financial Institutions or the Conduits by each other, (ii) by the
Administrative Agent, the Managing Agents or the Purchasers to any prospective or actual assignee
or participant of any of them and (iii) by the Administrative Agent, any Managing Agent or any
Conduit to any rating agency (including, without limitation, in compliance with Rule 17g-5 under
the Securities Exchange Act of 1934), Commercial Paper dealer or provider of a surety, guaranty or
credit or liquidity enhancement to its related Conduit or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which any Managing Agent 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, the Managing Agents 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. The Seller, the Servicer, the Administrative Agent,
each Managing Agent and each Purchaser hereby covenants and agrees that, prior to the



48









 






date that is
one year and one day after the payment in full of all outstanding senior indebtedness of a Conduit,
it will not institute against, or join any other Person in instituting against, such 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 a Conduit) arising due to such Person’s gross negligence or willful misconduct.




          (b) Notwithstanding any provisions contained in this Agreement or any other Transaction
Document to the contrary, a Conduit shall not be obligated to pay any amount pursuant to this
Agreement or any other Transaction Document unless such 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 such Conduit’s Commercial Paper when due. Any amount
which a Conduit does not pay pursuant to the operation of the preceding sentence shall not
constitute a claim against such 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 ADMINISTRATIVE AGENT, ANY
MANAGING AGENT OR ANY



49









 






PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE ADMINISTRATIVE AGENT,
ANY MANAGING AGENT OR ANY PURCHASER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, ANY MANAGING
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.




          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 Agent Roles. Each of the Financial Institutions acknowledges that each
Person party hereto as the Administrative Agent or a Managing Agent acts, or may in the



50









 






future act,
(i) as administrative agent for a Conduit or a 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 a Conduit
or a Financial Institution (collectively, the “Agent Roles”). Without limiting the
generality of this Section 13.13, each Financial Institution hereby acknowledges and
consents to any and all Agent Roles and agrees that in connection with any Agent Role, a Managing
Agent or the Administrative Agent, as applicable, 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 a 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 the Seller; provided, however, that (i) the Seller shall be
liable to each Purchaser, each Managing Agent and the Administrative Agent for all representations,
warranties, covenants and indemnities made by the 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
Purchaser, any Managing Agent or the Administrative Agent or any assignee thereof of any obligation
of the Seller, the Originator or any other Person arising in connection with the Receivables, the
Related Security, or the related Contracts, or any other obligations of the Seller or the
Originator.




          (b) In addition to any ownership interest which the Administrative Agent may from time to time
acquire pursuant hereto, the Seller hereby grants to the Administrative Agent for the ratable
benefit of the Managing Agents and the Purchasers a valid and perfected security interest in all of
the Seller’s right, title and interest in, to and under the following, whether now existing or
hereafter arising, all Receivables, the Collections, each Lock-Box, each Collection Account, all
Related Security, all other rights and payments relating to such Receivables, all of the Seller’s
rights, title and interest in, to and under the Receivables Sale Agreement (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 Managing Agents and 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, the Managing Agents 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, (x) to file, without the signature of the Seller or the
Originator, as debtors, the UCC financing statements contemplated herein and under the Receivables
Sale Agreement and (y) to include, on any financing statement filed against the Seller, the
collateral description: “All of the Debtor’s personal property and other assets, whether now owned
or existing or hereafter acquired or arising, together with all products and proceeds



51









 






thereof,
substitutions and replacements therefor, and additions and accessions thereto.” 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 the Seller’s transfer of its right, title and interest in, to and under
the Receivables Sale Agreement, 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 Receivables Sale Agreement, 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, any Managing Agent or any Purchaser or any
of its or their respective Affiliates to perform any of the obligations of the Seller under the
Receivables Sale Agreement. To the extent that the Seller enforces the Seller’s rights and
remedies under the Receivables Sale Agreement, 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.




          (d) If, notwithstanding the intention of the parties expressed above, any sale or
transfer by the 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, each of
the Seller and the Administrative Agent and each Purchaser represents and warrants as to itself
that each remittance of Collections by the Seller to the Administrative Agent, any Managing Agent
or any Purchaser hereunder will have been (i) in payment of a debt incurred by the Seller in the
ordinary course of business or financial affairs of the Seller, the Administrative Agent and each
Purchaser and (ii) made in the ordinary course of business or financial affairs of the Seller, the
Administrative Agent and each Purchaser.




          Section 13.15 Intercreditor Agreement. Each Purchaser and each Managing Agent
hereby agrees to be bound by the terms of, and the Administrative Agent’s covenants, agreements,
waivers and acknowledgements under, the Intercreditor Agreement.




          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



52









 






Administrative Agent, each Managing Agent and each Purchaser, 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.




          Section 13.17 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.




          Section 13.18 Required Ratings. Any Managing Agent or any Financial Institution (each
such Person, a “Requesting Party”) shall have the right at any time to request that public
ratings of the facility evidenced by this Agreement of at least A-/A3 (the “Required
Ratings”) be obtained from two credit rating agencies acceptable to such Requesting Party.
Each of the Seller and the Servicer agree that they shall cooperate with such Requesting Party’s
efforts to obtain the Required Ratings, and shall provide such Requesting Party, for distribution
to the applicable credit rating agencies, any information reasonably requested by such credit
rating agencies for purposes of providing the Required Ratings. Any such request (a “Ratings
Request”) shall be in writing, and if the Required Ratings are not obtained within 60 days
following the date of such Ratings Request (the “Ratings Request Due Date”) (unless the
failure to obtain the Required Ratings is solely the result of such Requesting Party’s failure to
provide the credit rating agencies with sufficient information to permit the credit rating agencies
to perform their analysis, and is not the result of the Seller or the Servicer’s failure to
cooperate or provide sufficient information to such Requesting Party), (i) upon written notice by
such Requesting Party to the Seller within 90 days after the Ratings Request Due Date, the
Amortization Date shall occur, and (ii) outstanding Capital shall thereafter bear interest at a
rate per annum equal to 2.00% above the Alternate Base Rate. Such Requesting Party shall pay the
initial fees payable to the credit rating agencies for providing the Required Ratings.




          Section 13.19 Amendment and Restatement. The amendment and restatement of the
Original RPA pursuant to this Agreement shall be effective as of the Closing Date, subject to the
satisfaction of the conditions precedent set forth in Section 6.1. This Agreement shall
amend and restate in its entirety the Original RPA and shall have the effect of a substitution of
terms of the Original RPA, but this Agreement will not have the effect of causing a novation,
refinancing or other repayment of the Original Obligations or a termination or extinguishment of
the liens securing such Original Obligations, which Original Obligations shall remain outstanding
and
repayable pursuant to the terms of this Agreement and which liens shall remain attached,
enforceable and perfected securing such Original Obligations and all additional Obligations arising
under this Agreement. Each reference to the Original RPA in any of the Transaction Documents, or
any other document, instrument or agreement delivered in connection therewith, shall mean and be a
reference to this Agreement.




[SIGNATURE PAGES FOLLOW]




53









 





     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, Chief Executive Officer,

Chief Financial Officer and Treasurer 	 
	 



Notice Address:




 Consumers Receivables Funding II, LLC

One Energy Plaza

Jackson, MI 49201-2276

Attn: James L Loewen

Fax: (517) 788-0412




	 	 	 	 	 
	 	CONSUMERS ENERGY COMPANY, as Servicer

 	 
	 	By:  	/s/ Laura L. Mountcastle
 	 
	 	 	Name:  	Laura L. Mountcastle 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 



 Notice Address:




 Consumers Energy Company

One Energy Plaza

Jackson, MI 49201-2276

Attn: James L Loewen

Fax: (517) 788-0412




Signature Page to Amended and Restated Receivables Purchase Agreement





 









 







JPMORGAN PURCHASER GROUP:




	 	 	 	 	 
	 	FALCON ASSET SECURITIZATION COMPANY LLC, as a Conduit



By: JPMorgan Chase Bank, N.A., its attorney-in-fact

 	 
	 	By:  	/s/ Patrick Menichillo
 	 
	 	 	Name:  	Patrick Menichillo 	 
	 	 	Title:  	Vice President 	 
	 



 Notice Address:




 c/o JPMorgan Chase Bank, N.A.

10 S. Dearborn, Floor 13

Chicago, IL 60603

Attn: Kathleen Rovner

Phone: (312) 336-2685

Fax: (312) 732-1844

Email: kathleen.m.rovner@jpmchase.com




	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as a Financial

Institution, as a Managing Agent and as

Administrative Agent

 	 
	 	By:  	/s/ Patrick Menichillo
 	 
	 	 	Name:  	Patrick Menichillo 	 
	 	 	Title:  	Vice President 	 
	 



 Notice Address:




 JPMorgan Chase Bank, N.A.

10 S. Dearborn, Floor 13

Chicago, IL 60603

Attn: Kathleen Rovner

Phone: (312) 336-2685

Fax: (312) 732-1844

Email: kathleen.m.rovner@jpmchase.com




Signature Page to Amended and Restated Receivables Purchase Agreement




 









 







THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH
PURCHASER GROUP:




	 	 	 	 	 
	 	VICTORY RECEIVABLES CORPORATION, as a Conduit

 	 
	 	By:  	/s/ Frank B. Bilotta
 	 
	 	 	Name:  	Frank B. Bilotta 	 
	 	 	Title:  	President 	 
	 



 Notice Address:




 Victory Receivables Corporation

1251 Avenue of Americas, 12th Floor

New York, NY 10020-1104

Attention: Securitization Group

Facsimile: 212-782-6448




	 	 	 	 	 
	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK
BRANCH, as a Managing Agent

 	 
	 	By:  	/s/ Aditya Reddy
 	 
	 	 	Name:  	Aditya Reddy 	 
	 	 	Title:  	Senior Vice President 	 
	 



 Notice Address:




 The Bank of Tokyo-Mitsubishi UFJ, Ltd., New

York Branch

1251 Avenue of Americas, 12th Floor

New York, NY 10020-1104

Attention: Securitization Group

Facsimile: 212-782-6448




 UNION BANK, N.A., as a Financial Institution




Signature Page to Amended and Restated Receivables Purchase Agreement




 









 








	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Jeffrey Fesenmaier
 	 
	 	 	Name:  	Jeffrey Fesenmaier 	 
	 	 	Title:  	Vice President 	 
	 



 Notice Address:




 Union Bank, N.A.

c/o Commercial Loan Operations

1980 Saturn St.

Monterey Park, CA 91754

Fax No: (800) 446-9951 or (323) 724-6198

Email: #clo synd@unionbank.com

For inquiries, call: Maria Suncin (323) 720-2870



Signature Page to Amended and Restated 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):




          “Accounting Changes” has the meaning set forth in Section
13.16.




          “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 Amended and Restated Receivables Purchase Agreement, as the
same may be further amended, restated, supplemented or otherwise modified from time to time.







Exh I - 1









 








          “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.




          “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 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, (v) the date which
is at least fifteen (15) Business Days after the Administrative Agent’s receipt of written notice
from the 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 and (vi) the Business Day specified in a written notice from the
Administrative Agent to the Seller in accordance with Section 13.18.




          “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	%






Exh I - 2









 






	 	 	 	 	 
	Monthly Report Coverage Period	 	Applicable Maximum Purchaser Interest
	October
	 	 	100	%
	November
	 	 	100	%
	December
	 	 	100	%






          “Applicable Stress Factor” means 2.00.




          “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 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 a
Conduit, an undivided interest in which has been assigned by a Conduit to a Financial Institution
or is otherwise funded by a Financial Institution pursuant to a Liquidity Agreement.




          “Base Rate” has the meaning set forth in the definition “Alternate Base Rate”.




          “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 the 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 or otherwise funded
under a Liquidity Agreement or terminated prior to the date on which it was originally scheduled to
end, including by the written notice of the 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 related Managing 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, funding 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 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) (y) exceeds the amount referred to in clause (A), the relevant
Purchaser or Purchasers agree to pay to the Seller the amount of such excess. All Broken Funding
Costs shall be due and payable hereunder upon demand.







Exh I - 3









 








          “Business Day” means any day on which banks are not authorized or required to close in
New York, New York, Chicago, Illinois or Los Angeles, California 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 or any Managing 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 Lease” means any lease which has been or would be capitalized on the
books of the lessee in accordance with GAAP.




          “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 the
Seller, 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 the Seller’s books as uncollectible.




          “CIP Regulations” has the meaning specified in Section 11.5(b).




          “Closing Date” means November 23, 2010.




          “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 the Servicer, the 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 a Conduit issued by such Conduit in the
commercial paper market.




          “Commitment” means, for each Financial Institution, the commitment of such Financial
Institution to purchase Purchaser Interests from the Seller 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, or in the case of a Financial Institution that becomes party to this Agreement
pursuant to an Assignment Agreement or a Joinder Agreement, as applicable, the amount set forth
therein as such Financial Institution’s “Commitment,” in each case, 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.




          “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 (with the consent of each Managing 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 the Administrative Agent may (and shall upon the direction
of any Managing Agent), upon not less than three Business Days’ notice to the Seller, cancel any
Special Concentration Limit.




          “Conduit” means a Person identified as a “Conduit” on Schedule A and its respective
successors and permitted assigns.




          “Conduit Purchase Limit” means for any Conduit, the maximum principal amount of the
Purchaser Interests which may be purchased by such Conduit as set forth on Schedule A (or
on the applicable schedule to the Assignment Agreement or Joinder Agreement pursuant to which such
Conduit became a party hereto), subject to assignment pursuant to Section 12.1(a), as such
amount may be reduced in accordance with Section 1.1(b).




          “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.







Exh I - 5









 








          “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 a Conduit
if and to the extent such 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
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 a Conduit pursuant to the terms of any receivable purchase facilities funded
substantially with Pooled Commercial Paper. In addition to the foregoing costs, if the Seller
shall request any Incremental Purchase during any period of time determined by the applicable
Managing 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 such 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 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.




          “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.




          “Customer Deposits” means, at any time, the aggregate amount of cash deposits held by
Consumers against Obligors’ accounts.




          “Daily Report” means a report, in substantially the form of Exhibit XII hereto
(appropriately completed), furnished by the Servicer to the Administrative Agent and each Managing
Agent pursuant to Section 8.5.




          “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.







Exh I - 6









 








          “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).




          “Deemed Collections” means the aggregate of all amounts the Seller shall have been
deemed to have received as a Collection of a Receivable. The 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 the Seller (other than cash Collections on account of
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 the Seller (or
required to be deposited by the 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 2.00% above the Alternate Base Rate.




          “Defaulted Receivable” means a Receivable that becomes a Charged-Off Receivable prior
to 91 calendar days after the original due date.




          “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 two most recently ended Accrual Periods and (b) the aggregate Original Balance of all Unbilled
Receivables as of the end 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.




          “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.






Exh I - 7









 






          “Dilution Ratio” means, for any Accrual Period, a percentage equal to (i) the
aggregate amount of Dilutions which occurred 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”.




          “Eligible Receivable” means, at any time, a Receivable:





     (i) which is not a Charged-Off Receivable, a Delinquent Receivable, a WPP Receivable or
a Rate I 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 (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),




     (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,



Exh I - 8









 






     (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),




     (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 the Originator (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 the Originator,




     (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
Originator directly to the Seller under and in accordance with the Receivables Sale
Agreement, and the 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.







Exh I - 9









 








          “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 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.




          “Falcon” means Falcon Asset Securitization Company LLC, a Delaware limited liability
company.




          “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 JPMC 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 the
Seller, the Purchasers, the Managing Agents and the Administrative Agent, as it may be further
amended, restated, supplemented or otherwise modified 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” means, as to any Purchaser Group, each of the financial
institutions listed on Schedule A as a “Financial Institution” for such Purchaser Group,
together with its respective successors and permitted assigns.




          “Financing Order” means the financing order issued by the Michigan Public Service
Commission on October 24, 2000, as amended.




          “Fitch” means Fitch Inc.




          “FMB Release Date” has the meaning set forth in the Credit Agreement.







Exh I - 10









 








          “Funding Agreement” means this Agreement and any agreement or instrument executed by
any Funding Source with or for the benefit of any Conduit (including any Liquidity Agreement).




          “Funding Source” 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 any Conduit, (iii) any agent, administrator or manager of any Conduit, (iv) any bank
holding company in respect of any of the foregoing or (v) any Conduit or any entity that is
consolidated with any Conduit for financial and/or regulatory accounting purposes.




          “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, 2009 (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.




          “Group Purchase Limit” means, for each Purchaser Group, the amount set forth on
Schedule A (or in the Joinder Agreement pursuant to which such Purchaser Group became party
hereto), subject to assignment pursuant to Section 12.1, as such amount may be reduced in
accordance with Section 1.1(b).




          “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” means, with respect to the Seller, a manager who (i) is not, and
within the previous five years was not (except solely by virtue of such Person’s serving as, or
being an Affiliate of any other Person serving as, an independent director or manager, as
applicable, of Consumers or any bankruptcy-remote special purpose entity that is an Affiliate of
Consumers or the Seller) (a) a stockholder, member, partner, director, officer, employee,






Exh I - 11









 







Affiliate, customer, supplier, creditor or independent contractor of, or any Person that has
received any benefit in any form whatever from (other than in such manager’s capacity as a
ratepayer or customer of Consumers in the ordinary course of business), or any Person that has
provided any service in any form whatsoever to, or any major creditor (or any Affiliate of any
major creditor) of, the Seller, Consumers, or any of their Affiliates, or (b) any Person owning
beneficially, directly or indirectly, any outstanding shares of common stock, any limited liability
company interests or any partnership interests, as applicable, of the Seller, Consumers or any of
their Affiliates, or of any major creditor (or any Affiliate of any major creditor) of any of the
foregoing, or a stockholder, member, partner, director, officer, employee, Affiliate, customer,
supplier, creditor or independent contractor of, or any Person that has received any benefit in any
form whatever from (other than in such Person’s capacity as a ratepayer or customer of Consumers in
the ordinary course of business), or any Person that has provided any service in any form whatever
to, such beneficial owner or any of such beneficial owner’s Affiliates, or (c) a member of the
immediate family of any person described above; provided that the indirect or beneficial
ownership of stock through a mutual fund or similar diversified investment vehicle with respect to
which the owner does not have discretion or control over the investments held by such diversified
investment vehicle shall not preclude such owner from being an Independent Manager; (ii) has prior
experience as an independent director or independent manager for a corporation or limited liability
company whose charter documents required the unanimous consent of all independent directors or
independent managers, as applicable, thereof before such corporation or limited liability company
could consent to the institution of bankruptcy or insolvency proceedings against it or could file a
petition seeking relief under any applicable federal or state law relating to bankruptcy and (iii)
has at least three years of employment experience with one or more entities that provide, in the
ordinary course of their respective businesses, advisory, management or placement services to
issuers of securitization or structured finance instruments, agreements or securities. For
purposes of this definition, “major creditor” shall mean a natural person or business entity to
which the Seller, Consumers or any of their Affiliates has outstanding indebtedness for borrowed
money or credit on open account in a sum sufficiently large as would reasonably be expected to
influence the judgment of the proposed Independent Manager adversely to the interests of the Seller
when the interests of that Person are adverse to those of the Seller.




          “Intercreditor Agreement” means the Intercreditor Agreement dated as of May 22, 2003
among JPMC (as successor by merger to Bank One, NA (Main Office Chicago)), Falcon Asset
Securitization Company LLC, The Bank of New York, as trustee, Consumers Funding LLC, Consumers
Receivables Funding II, LLC and Consumers Energy Company, as the same may be amended, restated,
supplemented or otherwise modified from time to time.




          “JPMC” as the meaning set forth in the preamble to this Agreement.




          “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.




          “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.







Exh I - 12









 








          “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 JPMC 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 an agreement entered into by a Conduit and the related
Financial Institutions in its Purchaser Group in connection herewith for the purpose of providing
liquidity with respect to the Capital funded by such Conduit under this Agreement (it being
understood that a Conduit may enter into more than one Liquidity Agreement).




          “Liquidity Termination Date” means November 22, 2011.




          “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.




          “Loss Percentage” means at any time the greater of (i) 15% and (ii) a percentage
calculated in accordance with the following formula:




               LP = ASF x LHF x LR


Exh I - 13









 







           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
sum of (a) the aggregate Outstanding Balance of all Billed Receivables which are more than ninety
(90) and less than one hundred twenty-one (121) days past due as of the last day of the most
recently ended Accrual Period and (b) all Receivables that became Defaulted Receivables 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.




          “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.




          “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.




          “Manager” has the meaning specified in the Limited Liability Company Agreement of the
Seller.




          “Managing Agent” means, as to any Conduit or Financial Institution, the Person listed
on Schedule A as the “Managing Agent” for such Purchasers, together with its respective
successors and permitted assigns.




          “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.







Exh I - 14









 








          “Monthly Report” means a report, in substantially the form of Exhibit IX
hereto (appropriately completed), furnished by the Servicer to the Administrative Agent and each
Managing Agent pursuant to Section 8.5.




          “Moody’s” means Moody’s Investors Service, Inc.




          “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.




          “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 greater of (a)
$3,000,000 and (b) 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 at 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 SPP Arrearage
Amount.




          “New Purchasers” means Victory Receivables Corporation and Union Bank, N.A.




          “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.




          “Non-Renewing Financial Institution” has the meaning set forth in Section
12.4.




          “Obligations” shall have the meaning set forth in Section 2.1.




          “Obligor” means a Person obligated to make payments pursuant to a Contract.




          “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.







Exh I - 15









 








          “Original Balance” means, with respect to any Receivable, the Outstanding Balance of
such Receivable on the date it was originated.




          “Original Obligations” has the meaning set forth in the preliminary statements to this
Agreement.




          “Original RPA” has the meaning set forth in the preliminary statements to this
Agreement.




          “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.




          “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 a Conduit subject to any
particular pooling arrangement by such Conduit, but excluding Commercial Paper issued by such
Conduit for a tenor and in an amount specifically requested by any Person in connection with any
agreement effected by such 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.




          “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.




          “Proposed Reduction Date” has the meaning set forth in Section 1.3.




          “Pro Rata Share” means, as the context requires:




          (i) for each Purchaser Group, as among all Purchaser Groups, the ratio at such time
(expressed as a percentage) of the aggregate Commitments of the Financial


Exh I - 16









 







Institutions in such Purchaser Group to the aggregate Commitments of all Financial
Institutions; and




          (ii) for each Financial Institution as among all Financial Institutions within such
Purchaser Group, the ratio at such time (expressed as a percentage) of the Commitment of
such Financial Institution to the aggregate Commitment of all Financial Institutions within
such Purchaser Group; and




          (iii) with respect to the allocation of any payment or distribution hereunder, for each
Purchaser, the ratio at such time (expressed as a percentage) of the aggregate Capital in
respect of the Purchaser Interests held by such Purchaser to the Aggregate Capital in
respect of the Purchaser Interests held by all Purchasers.




          “Purchase Allocation” has the meaning set forth in Section 1.2.




          “Purchase Limit” means $250,000,000, 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 the Seller for such Purchaser Interest which shall not exceed the
least of (i) the amount requested by the 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 the 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.




          “Purchaser Group” means a Conduit, its related Financial Institution and their related
Managing Agent.




          “Purchasers” means any Conduit or Financial Institution, as applicable.




          “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:




	 	 	 	 	 

	 

	 	C
	 	 
	 

	 	 	 	 
	 

	 	NRB-AR	 	 






	 	 	 	 	 	 	 

	 

	 	where:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	C
	 	=
	 	the Capital of such Purchaser Interest.
	 
	 	 	 	 	 	 
	 

	 	AR
	 	=
	 	the Aggregate Reserves.






Exh I - 17









 






	 	 	 	 	 	 	 

	 

	 	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).




          “Rate I Receivable” means a Receivable, the Obligor of which is a non-residential
customer, and which arises under a tariff available to any such Obligor desiring interruptible
electric service where the billing demand is 5,000 kW or more, issued under the authority of the
Michigan Public Service Commission dated December 22, 2005 in Case No. U-14347.




          “Receivable” means all indebtedness and other obligations owed to the Seller or the
Originator (at the time it arises, and before giving effect to any transfer or conveyance under the
Receivables Sale Agreement or hereunder) or in which the Seller or the 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 on the books and records of the Originator or the Seller (including its accounting
system) with the account code “Account 1460000 Customer Receivables” or “Account 1460201 — A/R
Other” (or, in each case, any subsequent or replacement account code used to identify similar
indebtedness or other similar obligations owed to the Seller or 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, the Seller or the 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 has been amended prior to the date
hereof and may be further amended, restated, supplemented 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 - 18









 







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 the 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 the Seller’s right, title and interest in, to and under any
contracts or agreements providing for the servicing of such Receivable,




     (vii) all of the Seller’s right, title and interest in, to and under the
Receivables 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 equalling 100% of the Purchase Limit.




          “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







Exh I - 19









 






          “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 the 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 the 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 the 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 the Seller now
or hereafter outstanding, and (v) any payment of management fees by the 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.




          “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 and each
Managing 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.




          “Seller Parties” has the meaning set forth in the preamble to this Agreement.




          “Senior Debt” has the meaning set forth in the Credit Agreement.







Exh I - 20









 








          “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, restated,
supplemented or otherwise modified from time to time with the consent of the Administrative Agent
and each Managing 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 a
Conduit, the immediately preceding Accrual Period, and (B) in respect of each Purchaser Interest
funded by a Financial Institution, 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).




          “SPP Arrearage Amount” means $50,000,000 or such lesser amount as consented to in
writing by the Administrative Agent, each Managing Agent and each Financial Institution.




          “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 the 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).







Exh I - 21









 








          “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 a Liquidity Agreement:




          (a) if Yield for such Purchaser Interest is calculated on the basis of the LIBO Rate, a period
of one, two or three months, or such other period as may be mutually agreeable to the related
Managing Agent for such Financial Institution and the Seller, commencing on a Business Day selected
by the Seller or such Managing 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 clause (a) or
(b) of the definition of Alternate Base Rate, a period commencing on a Business Day
selected by the Seller and agreed to by the related Managing Agent for such Financial Institution,
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 related Managing Agent.




          “Transaction Documents” means, collectively, this Agreement, each Purchase Notice, the
Receivables Sale Agreement, 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.




          “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, the Originator 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.







Exh I - 22









 








          “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.




          “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.




          “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 a Financial Institution or by a Conduit other than through the issuance of Commercial
Paper, 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) or (b) of the definition of Alternate
Base Rate), and (b) for each respective Settlement Period relating to Purchaser Interests funded by
a Conduit through the issuance of Commercial Paper, 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 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.




          “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 any Financial Institution.




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 - 23











 





EXHIBIT II




FORM OF PURCHASE NOTICE



[Date]




JPMorgan Chase Bank, N.A., as Administrative Agent and as a Managing Agent

1 Chase Plaza, Suite IL1-0079

Asset-Backed Finance

Chicago, Illinois 60670-0596

Attn: ABS Treasury




The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as a Managing Agent

1251 Avenue of Americas, 12th Floor

New York, NY 10020-1104

Attn: Securitization Group





	cc: 	 	 Union Bank, N.A., as a Financial Institution

c/o Commercial Loan Operations

1980 Saturn St.

Monterey Park, CA 91754

Attn: Maria Suncin





          Re: PURCHASE NOTICE



Ladies and Gentlemen:




          Reference is hereby made to the Amended and Restated Receivables Purchase Agreement, dated as
of November 23, 2010, by and among Consumers Receivable Funding II, LLC, a Delaware limited
liability company, as the seller (the “Seller”), Consumers Energy Company, a Michigan
corporation, as the Servicer, the Conduits party thereto from time to time, the Financial
Institutions party thereto from time to time, the Managing Agents party thereto from time to time
and JPMorgan Chase Bank, N.A., as Administrative Agent (as the same may be further amended,
restated, supplemented or otherwise modified from time to time, the “Receivables Purchase
Agreement”). Capitalized terms used herein shall have the meanings assigned to such terms in
the Receivables Purchase Agreement.




     The Administrative Agent and each Managing Agent is hereby notified of the following
Incremental Purchase:



	 	 	 	 	 
	Purchaser Group	 	 
	(identified by the related Managing Agent)	 	Purchase Price
	JPMorgan Chase Bank, N.A.
	 	$	____________________	 
	The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
New York Branch
	 	$	____________________	 
	Total Purchase Price:
	 	$	____________________	 






 









 






          Date of Purchase: [ ______________ ]




          Requested Discount Rate: [LIBO Rate][Alternate Base Rate][CP Rate]




          Requested Tranche Period: [ ______________ ]




          Please wire-transfer the Purchase Price in immediately available funds on the above-specified
date of purchase to:




Consumers Receivables Funding II, LLC

Account Number: 2000032635920

Wachovia Bank, Charlotte, North Carolina

ABA# 053000219

Reference: A/R Purchase

Telephone advice to: Steve Headley @ tel. No. (517-788-1511)




          Please advise Steve Headley at telephone no. (517) 788-1511 if any Conduit will not be making
this purchase.




          In connection with the Incremental Purchase to be made on the above listed “Date of Purchase”
(the “Purchase Date”), the Seller hereby certifies that the following statements are true
on the date hereof, and will be true on the Purchase Date (before and after giving effect to the
proposed Incremental Purchase):




          (i) the representations and warranties of the Seller set forth in Section 5.1 of the
Receivables Purchase Agreement are true and correct on and as of the Purchase Date as though made
on and as of such date;




          (ii) no event has occurred and is continuing, or would result from the proposed Incremental
Purchase, that will constitute an Amortization Event or a Potential Amortization Event;




          (iii) the Amortization Date has not occurred, the Aggregate Capital does not exceed the
Purchase Limit and the aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest; and






Exh. II-2









 








          (iv) the amount of Aggregate Capital is $_________ after giving effect to the Incremental
Purchase to be made on the Purchase Date.




	 	 	 	 	 
	 	Very truly yours,

CONSUMERS RECEIVABLES FUNDING II, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



Exh. II-3









 







EXHIBIT III




PLACES OF BUSINESS OF THE SELLER PARTIES;

LOCATIONS OF RECORDS;

FEDERAL EMPLOYER IDENTIFICATION NUMBER(S);

STATE ORGANIZATION IDENTIFICATION NUMBER(S)


CONSUMERS RECEIVABLE FUNDING II, LLC




Principal Place of Business

& Chief Executive Office:




One Energy Plaza

Jackson, MI 49201-2276




Location of Records:




One Energy Plaza

Jackson, MI 49201-2276




	 	 	 	 	 

	Federal Employer Identification Number:

	 	87-0700466	 	 
	 
	 	 	 	 
	Delaware Organizational Identification Number:

	 	3467905	 	 






CONSUMERS ENERGY COMPANY




Place of Business,

Chief Executive Office, and

Location of Records:




One Energy Plaza

Jackson, MI 49201-2276




	 	 	 

	Federal Employer Identification Number:

	 	38-0442310
	 
	 	 
	Michigan Organizational Identification Number:

	 	MI 021-395






Exh. III-1









 






EXHIBIT IV




NAMES OF COLLECTION BANKS; COLLECTION ACCOUNTS; LOCK-BOXES



	 	 	 

	JP Morgan Chase Bank

717 Travis, TX2-S084

Houston, TX 77002

Contact: Nina Lacy

Phone: 713-216-2227
	 	 
	Collection Account: 1242263;
	 	provided, that, such account shall be a Specified
Account on and after such date as the account is subject to a Collection Account
Agreement.






	 	 	 

	Comerica Bank 

500 Woodward Avenue, 9th Floor, MC3268

Detroit, MI 48226

Contact: Stacie McVeigh 

Phone: 313-222-4515


	Collection Account: 1076119914;
	 	provided, that, such account shall be a Specified Account on and after such date as the account is subject to a Collection Account Agreement.






Wachovia Bank

10401 Deerwood Park Blvd — FL0117

South Building, 3rd Floor

Jacksonville, FL 32256

Contact: Carol Grant

Phone: 800-590-7868 team 662 ext. 4

Collection Account: 2000032635920




Lock-Box Zip Code:

Lansing, MI 48937-0001




PNC Bank, National Association

620 Liberty Avenue

Pittsburgh, PA 15222

Contact: Gabe Galioto

Phone: 412-768-1819

Specified Account: 4006909862




Fifth Third Bank

710 Seminole Rd MD R17061

Norton Shores, MI 49441

Contact: Randy Wolffis, VP & Relationship Manager

Phone: 231-733-5006

Fax: 231-739-7430

Email: randal.wolffis@53.com; CommercialSupport@53.com

Specified Account: 7164496916










Exh. IV-1









 








EXHIBIT V




FORM OF COMPLIANCE CERTIFICATE




	To: 	 	JPMorgan Chase Bank, N.A., as Administrative Agent and as Managing Agent
	 
	 	 	The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Managing Agent





               This Compliance Certificate is furnished pursuant to that certain Amended and Restated
Receivables Purchase Agreement dated as of November 23, 2010, among Consumers Receivable Funding
II, LLC, as the seller (the “Seller”), Consumers Energy Company, a Michigan corporation, as
the servicer (the “Servicer”), the Conduits party thereto from time to time, the Financial
Institutions party thereto from time to time, the Managing Agents party thereto from time to time
and JPMorgan Chase Bank, N.A., as Administrative Agent (as the same may be further amended,
restated, supplemented or otherwise modified from time to time, the “Agreement”).
Capitalized terms used herein shall have the meaning assigned to such terms in the Agreement.




     THE UNDERSIGNED HEREBY CERTIFIES THAT:



     1. I am the duly elected _______________ of the [Seller][Servicer].



     2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under
my supervision, a detailed review of the transactions and conditions of the [Seller][Servicer] and
its Subsidiaries during the accounting period covered by the attached financial statements.



     3. The examinations described in paragraph 2 did not disclose, and I have no knowledge
of, the existence of any condition or event which constitutes an Amortization Event or Potential
Amortization Event, as each such term is defined under the Agreement during or at the end of the
accounting period covered by the attached financial statements or existing as of the date of this
Certificate, except as set forth in paragraph 5 below.



     4. Schedule I attached hereto sets forth financial data and computations evidencing
the compliance with certain covenants of the Agreement, all of which data and computations are
true, complete and correct.



     5. Described below are the exceptions, if any, to paragraph 3 by listing, in detail,
the nature of the condition or event, the period during which it has existed and the action which
the [Seller][Servicer] has taken, is taking, or proposes to take with respect to each such
condition or event:



 
 





 
 





 
 





Exh. V-1









 





     The foregoing certifications, together with the computations set forth in Schedule I
hereto and the financial statements delivered with this Certificate in support hereof, are made and
delivered this ____________________________ day of ______, _______.



Exh. V-2









 





SCHEDULE I TO COMPLIANCE CERTIFICATE





	A.	 	Schedule of Compliance as of __________, ____ with Section ___ of the Agreement. Unless
otherwise defined herein, the terms used in this Compliance Certificate have the meanings
ascribed thereto in the Agreement.





          This schedule relates to the period ended: ______________








Exh. V-3









 








EXHIBIT VI



FORM OF COLLECTION ACCOUNT AGREEMENT



(Attached)






Exhibit VI-1









 





Execution Copy












DEPOSIT ACCOUNT CONTROL AGREEMENT


This Deposit Account Control Agreement (this “Agreement”) is entered into as of April 20,
2010, by and among Consumers Receivables Funding II, LLC (“Customer”), JPMorgan Chase Bank,
N.A., as administrative agent (the “Secured Party”), and Fifth Third Bank, an Ohio banking
corporation (“Bank”), with reference to the following facts:




RECITALS




     A. Customer maintains the Deposit Account (as defined below) at Bank’s office (the
“Banking Office”).



     B. Customer, Consumers Energy Company, as Servicer (the “Servicer”), Secured Party,
and certain other financial institutions party thereto from time to time (the “Purchasers”)
have entered into a Receivables Purchase Agreement dated as of May 22, 2003 (together with other
documents executed and delivered in connection therewith, in each case, as amended, restated,
supplemented or otherwise modified from time to time, the “Transaction Documents”),
pursuant to which the Customer has granted Secured Party a security interest in the Deposit Account
and all funds now or at any time hereafter held in the Deposit Account.



     C. Secured Party, Customer and Bank have agreed to enter into this Agreement to provide for
the control of the Deposit Account by Secured Party and to perfect Secured Party’s security
interests in the Deposit Account (as each such term is defined below).



     NOW, THEREFORE, in consideration of the mutual promises and covenants, contained herein the
parties hereto mutually agree as follows.



ARTICLE 1-DEFINITIONS




     1.01 Definitions. As used in this Agreement, the following terms shall have the
following meanings:




     “Code” means the Uniform Commercial Code as in effect from time to time in the
State of New York, and any successor statute.




     “Deposit Account” means Customer’s deposit account (as such term is defined in
the Code) with Bank, number 7164496916.




     “Notice of Exclusive Control” means written notice to Bank that states that in
accordance with the terms of the Transaction Documents, Secured Party is exercising
exclusive control over the Deposit Account. The Notice of Exclusive Control shall be in the
form of Exhibit A.



1









 







     “Order” means any instruction issued by any person with respect to the
disposition of any funds contained in the Deposit Account.



     1.02 Construction Any reference herein to any document includes any and all
alterations, amendments, extensions, modifications, renewals, or supplements thereto or thereof,
as applicable. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed
or resolved against Secured Party, whether under any rule of construction or otherwise. This
Agreement has been reviewed by each of the parties hereto, and their respective counsel. This
Agreement shall be construed and interpreted according to the ordinary meaning of the words used
so as to fairly accomplish the purposes and intentions of Customer and Secured Party.



ARTICLE 2-CONTROL




     2.01 No Withdrawals or Payments After Receipt of Notice of Exclusive Control. Anything
contained in Section 2.03 to the contrary notwithstanding, Customer hereby absolutely,
irrevocably and unconditionally authorizes and instructs Bank to, and Bank agrees that it shall,
promptly upon receipt of a Notice of Exclusive Control by Bank in accordance with Section
3.08 hereof:




     (a) neither accept nor comply with any Order from Customer or any other person for the
payment of any funds from the Deposit Account to any third person nor permit Customer to
withdraw any funds from the Deposit Account without the specific prior written consent of
Secured Party; and




     (b) comply with the Orders originated by Secured Party concerning the Deposit Account
and all other requests or instructions from Secured Party regarding disposition and/or
delivery of funds contained in the Deposit Account, without further consent or direction from
Customer or any other person and without regard to any inconsistent or conflicting Orders
given to Bank by Customer.




2.02 Priority of Lien. Bank hereby acknowledges and agrees that:




     (a) Bank has received notice of the existence of the security interest of Secured Party
in the Deposit Account and all amounts from time to time on deposit therein for the benefit
of (i) the Purchasers and the Secured Party and (ii) The Bank of New York Mellon, or any
successor thereto, as trustee (the “Bond Trustee”) under the Indenture dated as of
November 8, 2001 between Consumers Funding LLC and the Bond Trustee, as supplemented, and
Bank recognizes the security interest granted to Secured Party by Customer;




     (b) All of Bank’s present and future rights against the Deposit Account and all funds
deposited therein from time to time are subordinate to Secured Party’s security interest
therein; provided, however, that Secured Party hereby acknowledges and agrees that
nothing herein subordinates or waives, and that Bank expressly reserves, all of its present
and future rights (whether described as rights of setoff, banker’s lien, security interest,
chargeback or otherwise, and whether available to Bank under the law or under any other
agreement between Bank and Customer concerning the Deposit Account, or otherwise) with
respect to: (i) items deposited to the Deposit Account and returned unpaid, whether for
insufficient funds or for any other reason, and without regard to the timeliness of return of
any such items or the occurrence or timeliness of any drawee’s notice of non-payment of such
items; (ii) ACH entries credited to the Deposit Account and later reversed, whether for
insufficient funds or for any other reason, and without regard to the timeliness of such entries’
reversal; (iii)



2









 







chargebacks to the Deposit Account of credit card transactions; (iv)
erroneous entries to the Deposit Account; (v) overdrafts on the Deposit Account, (vi) claims
of breach of the transfer or presentment warranties made to Bank pursuant to the Code in
connection with items deposited to the Deposit Account; and (vii) Bank’s usual and customary
charges for services rendered in connection with the Deposit Account; and




     (c) Except as otherwise required by law, Bank shall not enter into any agreement with
any third party relating to the Deposit Account or agree that it will comply with any Orders
concerning the Deposit Account originated by any such third party without the prior written
consent of Secured Party and Customer.



     2.03 Control of Deposit Account. At all times during the effectiveness of this
Agreement, Customer hereby absolutely, irrevocably and unconditionally instructs, and Bank hereby
agrees, that;




     (a) Bank shall not comply with any Orders or other instructions concerning the Deposit
Account, from any third party without the prior written consent of (i) prior to delivery of a
Notice of Exclusive Control, Secured Party and Customer and (ii) after delivery of a Notice
of Exclusive Control, Secured Party.




     (b) Except as otherwise provided in Sections 2.01 and 2.02, prior to the receipt
of a Notice of Exclusive Control by Bank in accordance with Section 3.08 hereof, Bank
may accept and execute Orders from Customer with respect to the payment or withdrawal of any
funds from the Deposit Account or the payment of any funds in the Deposit Account to
Customer.




2.04 Representations, Warranties and Acknowledgments.




     (a) Customer represents and warrants to Secured Party that:




     (i) the Deposit Account has been established and is maintained with Bank at the
Banking office, solely in Customer’s name as recited above;




     (ii) Customer has not entered into any agreement with any third party regarding
the Deposit Account, nor has it previously pledged a security interest in the Deposit
Account.




(b) Bank represents and warrants to Secured Party that, to the best of its knowledge:




     (i) Bank has not entered into any agreement with any third party regarding the
Deposit Account or agreed that it will comply with any Orders concerning the Deposit
Account originated by any such third party.




     (ii) There is no claim to, security interest in or lien upon the Deposit
Account, except the security interests in favor of Secured Party and Bank’s liens
securing fees and charges pursuant to Section 2.02 hereof.




2.05 Agreements of Bank and Customer. Bank and Customer agree that:
(a) Bank shall send copies of all statements relating to the Deposit Account
simultaneously to Customer and to Secured Party;



3









 






     (b) Bank may disclose to Secured Party such other information concerning the Deposit
Account as Secured Party may from time to time request; provided, however, that Bank
shall have no obligation to disclose to Secured Party any information which Bank does not
ordinarily make available to its depositors; and




     (c) Bank shall use reasonable efforts to promptly notify Secured Party and Customer if
any other party asserts any claim to, security or property interest in or lien upon the
Deposit Account.




2.06 Bank’s Responsibility. Anything contained in the foregoing to the contrary
notwithstanding:




     (a) Except for permitting a withdrawal in violation of Section 2.01, Bank shall
not be liable to Secured Party for complying with Orders from Customer that are received by
Bank before the Effective Time. For purposes hereof, the “Effective Time” will be as soon as
practicable after Bank confirms receipt (as confirmation is described in Section
3.08 hereof) and has had a reasonable opportunity to act on such Notice of Exclusive
Control and any contrary Order from Secured Party; provided, however, that (i) the
“Effective Time” will be no later than the close of business on the second (2nd)
Business Day following the Business Day of such receipt, and (ii) “Business Day” shall mean
any day other than a Saturday, Sunday or other day on which Bank is or is authorized or
required by law to be closed.




     (b) Bank shall not be liable to Customer for complying with Orders originated by
Secured Party, even if Customer notifies Bank that Secured Party is not legally entitled to
issue Orders, unless Bank takes the action after it is served with an injunction,
restraining order, or other legal process enjoining it from doing so, issued by a court of
competent jurisdiction, and had a reasonable opportunity to act on the injunction,
restraining order or other legal process.




     (c) This Agreement does not create any obligation of Bank except for those expressly
set forth in this Agreement. In particular, Bank need not investigate whether the Secured
Party is entitled under Secured Party’s agreements with Customer to give Orders. Bank may
rely on notices and communications it reasonably believes are given by the appropriate
party.




     (d) Bank will not have any liability to Customer or Secured Party for claims, losses,
liabilities or damages suffered or incurred by Customer or Secured Party as a result of or
in connection with this Agreement except to the extent such losses, liabilities and damages
directly result from Bank’s gross negligence or willful misconduct.




     (e) In no event shall Bank have any liability to Customer or Secured Party for any
consequential, special, punitive or indirect loss or damage whether or not any claim for
such damages is based on tort or contract or Bank knew or should have known the likelihood
of such damages in any circumstances. In no event shall Secured Party have any liability to
Bank for any consequential, special, punitive or indirect loss or damage whether or not any
claim for such damages is based on tort or contract or Secured Party knew or should have
known the likelihood of such damages in any circumstances.



4









 






2.07 Indemnity.




     (a) Customer shall indemnify and hold harmless Bank, its officers, directors,
employees, and agents against any and all claims, liabilities, demands, damages and expenses
arising out of this Agreement (including reasonable attorneys’ fees and disbursements and
the reasonable estimate of the allocated costs and expenses of in-house legal counsel and
staff), except to the extent the claims, liabilities, demands, damages or expenses are
caused by Bank’s gross negligence or willful misconduct or breach of this Agreement.
Customer shall indemnify Secured Party for any indemnity obligations Secured Party owes to
Bank under this Agreement.




     (b) Secured Party shall indemnify and hold harmless Bank, its officers, directors,
employees, and agents against any and all claims, liabilities, demands, damages and expenses
arising out of any Orders originated by Secured Party to Bank with respect to the Deposit
Account under this Agreement (including reasonable attorneys’ fees and disbursements and the
reasonable estimate of the allocated costs and expenses of in-house legal counsel and
staff), except to the extent the claims, liabilities, demands, damages or expenses are
caused by Bank’s gross negligence or willful misconduct or breach of this Agreement;
provided, however, that in no event shall the Secured Party be liable for any
special, consequential, exemplary damages, or lost profits.




2.08 Termination, Survival.




     (a) This Agreement shall terminate:




     (i) By Secured Party, immediately upon receipt by the Bank at the Banking Office
set forth in Section 3.08 of written notice from Secured Party expressly stating that
Secured Party is terminating this Agreement in the form of Exhibit B hereto;
or




     (ii) By Bank, thirty (30) days after the receipt by Secured Party and Customer
of written notice from Bank stating that it is terminating this Agreement.




     (b) For the avoidance of doubt, until this Agreement has been terminated in accordance
with this Section 2.08, Customer shall not be entitled to direct Bank to close the
Deposit Account without the prior written consent of the Secured Party.




     (c) Section 2.06. “Bank’s Responsibility,” and Section 2.07.
“Indemnity,” shall survive termination of this Agreement.



ARTICLE 3-GENERAL PROVISIONS




     3.01 Conflicts; Controlling Agreement. As to the matters specifically the subject of
this Agreement, in the event of any conflict between this Agreement and any other agreement
between Bank and Customer, the terms of this Agreement shall control.



     3.02 Final Agreement; Amendments and Waivers. This Agreement, together with any
other document, instrument, or agreement entered into between Customer and Secured Party in
connection therewith with respect to the subject matter contained therein constitutes the entire
understanding between them with respect to the subject matter thereof. This Agreement supersedes



5









 




any and all prior oral or written agreements relating to the Deposit Account and the subject
matter hereof.




     3.03 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives, successors and assigns of
the parties; provided, that Customer may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of Secured Party. Secured Party may
assign or transfer all of its rights or obligations under this Agreement with prior written notice
to Bank and prior written notice to Customer in the form of Exhibit C (a “Notice of
Assignment”). Notwithstanding the foregoing, in order for such assignment by Secured Party to
be effective, Bank must acknowledge receipt of the Notice of Assignment, which Bank shall provide
as soon as practicable after receiving such Notice of Assignment, but no later than the close of
business on the second (2nd) Business Day following the Business Day of such receipt.
Bank may assign or transfer its rights and obligations under this Agreement in the event of a
merger or acquisition of Bank to Bank’s successor depositary institution (which successor shall be
a “bank” as defined in Section 9-102 of the Code).



     3.04 Amendments Modifications. This Agreement may be amended or modified only in
writing signed by all parties hereto.



     3.05 Severability of Provisions. If any provision of this Agreement for any reason
is held to be invalid, illegal or unenforceable in any respect, that provision shall not affect
the validity, legality or enforceability of any other provision of this Agreement.



     3.06 Section Headings. Headings and numbers used to identify sections and paragraphs
of this Agreement have been set forth herein for convenience only. Unless the contrary is
compelled by the context, everything contained in each section applies equally to this entire
Agreement.



     3.07 Counterparts; Facsimile Execution. This Agreement may be executed in any number
of counterparts and by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by
facsimile shall be equally as effective as delivery of a manually executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by facsimile also shall
deliver a manually executed counterpart of this Agreement but the failure to deliver a manually
executed counterpart shall not affect the validity, enforceability, and binding effect of this
Agreement.



     3.08 Notices. All notices, requests and demands which any party is required or may
desire to give to any other party under any provision of this Agreement must be in writing (unless
otherwise specifically provided) and delivered to each party at the following address:



	 	 	 

	Customer:

	 	Consumers Receivables Funding II, LLC

One Energy Plaza

Jackson, Michigan 49201

Attn: Treasurer

Facsimile: (517) 788-8233

Telephone: (517) 788-2286

	 
	 	 
	Secured Party:

	 	JPMorgan Chase Bank, N.A.

10 South Dearborn

Chicago, Illinois 60670

Attn: Asset Backed Securities — Conduits

Facsimile: (312) 732-3600

Telephone: (312) 732-1174







6









 






	 	 	 

	 

	 	 
	 
	 	 
	Bank:

	 	Email: CominercialSupport@53.com

	 
	 	 
	 

	 	AND
	 
	 	 
	 

	 	Fifth Third Bank

710 Seminole Rd MD R17061

Norton Shores, MI 49441

Attn: Randy Wolffis, VP & Relationship Manager

Phone: 231-733-5006

Fax: 231-739-7430

Email: randal.wolffis@53.com
	 
	 	 
	 

	 	AND
	 
	 	 
	 

	 	Fifth Third Bank

5522 East Galbraith Rd

Cincinnati, OH 45236

Attn: Malcolm Williams, A VP & Treasury Management Officer

Phone: 614-744-5313

Fax: 513-534-5947

Email: malcolm.williams@53.com





or to such other address or facsimile number as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or made when delivered.




     3.09 Governing Law. This Agreement shall be deemed to have been made in the state of
New York and the validity, construction, interpretation, and enforcement hereof, and the rights of
the parties hereto, shall be determined under, governed by, and construed in accordance with the
internal laws of the state of New York, without regard to principles regarding the conflicts or
choice of law.



     3.10 WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH PARTY HERETO HEREBY ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES, AND
COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY HERETO
ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THE PROVISIONS OF THIS
SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE RELIED, ARE RELYING AND
WILL RELY IN ENTERING INTO THIS AGREEMENT, THE PARTIES HERETO MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO
THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.



7









 





     Nothing in this Section shall prejudice the right of the Secured Party to exercise its non
judicial foreclosure rights and remedies, or prejudice the right of any party to obtain provisional
relief or other equitable remedies as shall otherwise be available judicially pending submission of
any issue, claim, demand, action, or cause of action to trial by the court as provided in this
Section.



[Remainder of page intentionally blank]





8












 





     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of
the date set forth in the first paragraph hereof.



	 	 	 	 	 
	 	CUSTOMER:



Consumers Receivables Funding II, LC

 	 
	 	By:  	/s/ Laura L. Mountcastle
 	 
	 	 	Name:  	Laura L. Mountcastle 	 
	 	 	Title:  	President, Chief Executive Officer,

Chief Financial Officer and Treasurer 	 
	 
	 	SECURED PARTY:



JPMorgan Chase Bank, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



THIS AGREEMENT IS NOT EFFECTIVE UNTIL AND UNLESS ACCEPTED BY FIFTH

THIRD BANK REVIEW, CONTROL AND SUPPORT




	 	 	 	 	 
	 	ACCEPTED:



BANK:



Fifth Third Bank,

Review, Control and Support

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Signature Page to

Deposit Account Control Agreement



 









 






     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
date set forth in the first paragraph hereof.



	 	 	 	 	 
	 	CUSTOMER:



Consumers Receivables Funding II, LC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SECURED PARTY:



JPMorgan Chase Bank, N.A.

 	 
	 	By:  	/s/ Patrick J. Menichillo
 	 
	 	 	Name:  	Patrick J. Menichillo 	 
	 	 	Title:  	Vice President 	 



THIS AGREEMENT IS NOT EFFECTIVE UNTIL AND UNLESS ACCEPTED BY FIFTH

THIRD BANK REVIEW, CONTROL AND SUPPORT




	 	 	 	 	 
	 	ACCEPTED:



BANK:



Fifth Third Bank,

Review, Control and Support

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date set forth in the first paragraph hereof.



Signature Page to

Deposit Account Control Agreement



 









 





	 	 	 	 	 
	 	CUSTOMER:



Consumers Receivables Funding II, LC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	SECURED PARTY:



JPMorgan Chase Bank, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



THIS AGREEMENT IS NOT EFFECTIVE UNTIL AND UNLESS ACCEPTED BY FIFTH

THIRD BANK REVIEW, CONTROL AND SUPPORT




	 	 	 	 	 
	 	ACCEPTED:



BANK:



Fifth Third Bank,

Review, Control and Support

 	 
	 	By:  	/s/ Judith Hoerst
 	 
	 	 	Name:  	Judith Hoerst 	 
	 	 	Title:  	VP, Global Payments Administration Manager 	 
	 



Signature Page to

Deposit Account Control Agreement



 









 





EXHIBIT A: NOTICE OF EXCLUSIVE CONTROL









ACCOUNT CONTROL AGREEMENT

NOTICE OF EXCLUSIVE CONTROL



Email: CommercialSupport@53.com




Fifth Third Bank

710 Seminole Rd MD R17061

Norton Shores, MI 49441

Attn: Randy Wolffis, VP & Relationship Manager

Phone: 231-733-5006

Fax: 231-739-7430

Email: randal.wolffis@53.com




Fifth Third Bank

5522 East Galbraith Rd

Cincinnati, OH 45236

Attn: Malcolm Williams, AVP & Treasury Management Officer

Phone: 614-744-5313

Fax: 513-534-5947

Email: malcolm.williams@53.com



Re: Account Control Agreement (“Agreement”) by and among Consumers Receivables Funding II,
LLC (“Customer”), JPMorgan Chase Bank, N.A., as administrative agent (“Secured
Party”), and Fifth Third Bank, an Ohio banking corporation (“Bank”), dated April 20,
2010 affecting Account Number 7164496916 (the “Deposit Account”).




	 	 	 	 	 

	Date:

	 	 
	 	  





To Whom It May Concern:



This letter serves as notice to Fifth Third Bank that Secured Party is hereby exercising exclusive
control over the Deposit Account.



Secured Party hereby orders Fifth Third to transfer funds from the Deposit Account to the following
account held by Secured Party:



Please contact us at ___________________ (phone number) immediately with any questions.




	 	 	 

	  

Name
and Title

	 	 
	  

Secured
Party

	 	 





 









 






EXHIBIT B: NOTICE OF TERMINATION








From:




ACCOUNT CONTROL AGREEMENT

NOTICE OF TERMINATION



Email: ComrnercialSupport@53.com




Fifth Third Bank

710 Seminole Rd MD R17061

Norton Shores, MI 49441

Attn: Randy Wolffis, VP & Relationship Manager

Phone: 231-733-5006

Fax: 231-739-7430

Email: randal.wolffis@53.com




Fifth Third Bank

5522 East Galbraith Rd

Cincinnati, OH 45236

Attn: Malcolm Williams, AVP & Treasury Management Officer

Phone: 614-744-5313

Fax: 513-534-5947

Email: malcolm.williams@53.com



Re: Account Control Agreement (“Agreement”) by and among Consumers Receivables Funding II,
LLC (“Customer”), JPMorgan Chase Bank, N.A., as administrative agent (“Secured
Party”), and Fifth Third Bank, a Ohio banking corporation (“Bank”), dated April 20,
2010 affecting Account Number 7164496916 (the “Deposit Account”).



Date:                           , 20     



To Whom It May Concern:



This letter serves as notice to Fifth Third Bank in accordance with Section 2.08 of the
Agreement that Secured Party is hereby permanently releasing its control over the Deposit Account.
The Agreement is hereby permanently terminated.



Please contact us at ___________________ (phone number) immediately with any questions.




	 	 	 

	 
 
 

	 	 
	  

Name
and Title

	 	 
	  

Secured
Party

	 	 





Fifth Third and Fifth Third Bank are registered service marks of Fifth Third Bancorp. Member FDIC




 









 





EXHIBIT C: NOTICE OF ASSIGNMENT




ACCOUNT CONTROL AGREEMENT

NOTICE OF ASSIGNMENT



Email: CommercialSurpport@53.com




Fifth Third Bank

710 Seminole Rd MD R17061

Norton Shores, MI 49441

Attn: Randy Wolffis, VP & Relationship Manager

Phone: 231-733-5006

Fax: 231-739-7430

Email: randal.wolffis@53.com




Fifth Third Bank

5522 East Galbraith Rd

Cincinnati, OH 45236

Attn: Malcolm Williams, AVP & Treasury Management Officer

Phone: 614-744-5313

Fax: 513-534-5947

Email: malcolm.williams@53.com




Consumers Receivables Funding II, LLC

One Energy Plaza

Jackson, Michigan 49201

Attn: Treasurer

Phone : 517-788-2286

Fax: 517-788-8233



Re: Account Control Agreement (“Agreement”) by and among Consumers Receivables Funding II,
LLC (“Customer”), JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan”),
and Fifth Third Bank, an Ohio banking corporation (“Bank”), dated April 20, 2010 affecting
Account Number 7164496916 (the “Deposit Account”).




	 	 	 	 	 

	Date:

	 	 
	 	  




To Whom It May Concern:



This letter serves as notice to Fifth Third Bank and Customer in accordance with Section
3.03 of the Agreement that JPMorgan, as Secured Party is assigning its rights and obligations
under the Agreement to [SUCCESSOR SECURED PARTY] (the “Successor Secured Party”) effective
as of [DATE] (the “Assignment Effective Date”).



JPMorgan hereby notifies Fifth Third and Customer that from and after the Assignment Effective
Date, the Successor Secured Party succeeds to and becomes vested with all the rights, powers,
privileges and duties of the Secured Party under the Agreement.





 









 







The Successor Secured Party’s address for purposes of Section 3.08 of the Agreement is as follows:
[                 ]



Please contact us at ___________________ (phone number) immediately with any questions.




	 	 	 

	 
 
 

	 	 
	  

Name
and Title

	 	 
	  

Secured
Party

	 	 




Acknowledged and Agreed:




Fifth Third Bank,

Review, Control and Support




	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 











 





Execution Copy




BLOCKED ACCOUNT AGREEMENT



March 17, 2010




PNC Bank, National Association

620 Liberty Avenue Pittsburgh, PA

15222 Attention: Gabe Galioto



Ladies and Gentlemen:



Reference is made to account number 4006909862 (the “Blocked Account”) at PNC Bank,
National Association (“PNC Bank”), in the name of, and into which certain monies,
instruments and other properties are deposited on behalf of Consumers Receivables Funding II, LLC
(the “Customer”). JPMorgan Chase Bank, N.A. (the “Administrative Agent”) hereby
advises PNC Bank that pursuant to the Receivables Purchase Agreement dated as of May 22, 2003
(together with the other documents executed and delivered in connection therewith, in each case as
amended, restated, supplemented or otherwise modified from time to time, the “Transaction
Documents”), among the Customer, Consumers Energy Company, as Servicer (the
“Servicer”), the Purchasers party thereto from time to time (the “Purchasers”) and
the Administrative Agent, the Customer has granted a security interest in, among other things, the
Blocked Account and all proceeds thereof to the Administrative Agent.



By signing this letter agreement (“Blocked Account Agreement”), PNC Bank (i) acknowledges
that it has received notice of the Administrative Agent’s interest in the Blocked Account and all
amounts from time to time on deposit therein for the benefit of (A) the Purchasers and the
Administrative Agent, (B) The Bank of New York Mellon, or any successor thereto, as trustee
(the “Bond Trustee”) under the Indenture dated as of November 8, 2001 between Consumers
Funding LLC and the Bond Trustee, as supplemented, and (C) Consumers Funding LLC, (ii) confirms
that PNC Bank has received no currently effective notice of any pledge or assignment of the Blocked
Account (other than pursuant to this Blocked Account Agreement) and (iii) agrees that, until this
Blocked Account Agreement is terminated, PNC Bank shall have no security interest or rights in or
claims to the funds in the Blocked Account except as set forth herein. Further, it is hereby agreed
that:





	a.	 	Until the Effective Time (as defined below), the Customer will be entitled to request
the transfer of collected funds from the Blocked Account in accordance with PNC Bank’s
customary procedures; provided, however, that the Customer will not be
entitled to direct PNC Bank to close the Blocked Account without the prior written consent
of the Administrative Agent. From and after the Effective Time, (i) the Administrative
Agent will have exclusive rights with respect to the transfer, withdrawal or other
disposition of the funds on deposit (subject to PNC Bank’s customary availability
schedules) from the Blocked Account and as to any other matters relating to the Blocked
Account or the funds




 









 






	 	 	deposited therein, (ii) PNC Bank will comply with the Administrative Agent’s written
instructions directing disposition of the funds on deposit in the Blocked Account, in accordance
with PNC Bank’s customary procedures and the terms of this Blocked Account Agreement, without
further consent or direction from the Customer or any other person, (iii) PNC Bank will
disregard any instructions of the Customer with respect thereto, and (iv) PNC Bank will furnish
the Administrative Agent and the Customer with copies of monthly account statements, in the form
and manner typical for PNC Bank, and PNC Bank will make available to the Administrative Agent
other information relating to the Blocked Account by web-based computer systems in accordance
with PNC Bank’s customary procedures. The Customer consents to PNC Bank’s release of account
information to the Administrative Agent.
	 
	 	 	For the purposes hereof, the “Effective Time” will be a time as soon as practicable after
receipt by PNC Bank of a notice purporting to be signed by the Administrative Agent in
substantially the same form as Exhibit A (the “Shifting Control Notice”) with a copy
of this Blocked Account Agreement attached thereto; provided, however, that
(i) the “Effective Time” will be no later than the opening of business on the second
(2nd) business day following the business day of such receipt, and (ii) a
“business day” is any day other than a Saturday, Sunday or other day on which PNC Bank is or
is authorized or required by law to be closed.
	 
	b.	 	In the event any fees and expenses (“Fees”) related to the Blocked Account go unpaid
or any checks or other items which were deposited or credited to the Blocked Account are
returned, reversed, refunded or charged back for insufficient funds or for any other reason
(“Returned Items”), PNC Bank may charge the Blocked Account or other accounts of the
Customer maintained at PNC Bank. If there are insufficient funds in the Blocked Account or
any of the Customer’s other accounts to cover the Fees and Returned Items, the Customer
agrees to immediately reimburse PNC Bank for the amount of such shortfall. After the
Effective Time, if the Customer fails to pay the amount demanded by PNC Bank, the
Administrative Agent agrees to reimburse PNC Bank within ten (10) business days after demand
thereof by PNC Bank for any Returned Items to the extent that the funds in respect thereof
were transferred out of the Blocked Account at the direction of the Administrative Agent.
	 
	c.	 	Unless the Administrative Agent directs PNC Bank in writing to the contrary, and subject to
PNC Bank’s right to place holds for uncollected funds pursuant to Federal Reserve Regulation
CC and PNC Bank’s customary procedures, after receipt of the Shifting Control Notice, PNC
Bank agrees to wire transfer the funds in the Blocked Account, on a daily basis and in same
day funds, to such account as the Administrative Agent may direct in writing.
	 
	d.	 	Notwithstanding the foregoing, PNC Bank shall have the right at any time to set-off against
and withdraw funds from the Blocked Account for (i) items credited to the Blocked Account in
error or which were unpaid for any reason, (ii) for overdrafts created on related accounts of
the Customer or any of its subsidiaries, (iii) any amounts deposited
therein in error or as necessary to correct processing errors; (iv) PNC Bank’s fees and
expenses owed




2









 






	 	 	by Customer and Administrative Agent for the maintenance of the Blocked Account and for PNC
Bank’s services under this Blocked Account Agreement; (v) reasonable attorney’s fees of PNC Bank’s
counsel for the review, negotiation and enforcement of this Blocked Account Agreement, which
attorney’s fees Customer hereby agrees to pay; and (vi) obligations and liabilities arising out of
any banking and cash management services provided by PNC Bank, including, but not limited to,
Automated Clearing House transactions. Except for its right to charge the Blocked Account in
accordance with this paragraph (d), PNC Bank unconditionally and irrevocably waives (so long as
this Blocked Account Agreement is in effect) any rights of set-off or banker’s lien against, or
rights to otherwise deduct from, any funds held in the Blocked Account for any indebtedness or
other claim owed by the Customer to PNC Bank. After the Effective Time, if there are insufficient
funds in the Blocked Account and the Customer has not fully reimbursed PNC Bank, the
Administrative Agent shall return such amount to PNC Bank on demand to the extent that such
amounts were transferred out of the Blocked Account at the direction of the Administrative Agent.
	 
	e.	 	The Customer agrees that the Administrative Agent shall have full and irrevocable right,
power and authority to take any action which the Administrative Agent deems reasonably
necessary or appropriate to preserve or protect its interest in the Blocked Account consistent
with this Blocked Account Agreement and the Transaction Documents.
	 
	f.	 	PNC Bank will follow its customary procedures for determining whether or not to honor any
checks, drafts or other payment requests drawn on or with respect to the Blocked Account. Any
electronic funds transfers (wire, automated clearing house, etc.) to or from the Blocked
Account will be subject to the terms and conditions of PNC Bank’s standard agreements for
such services, as in effect and as amended from time to time. In the event of any conflict
between the terms and conditions of such agreements and those of this Blocked Account
Agreement, then this Blocked Account Agreement shall control.
	 
	g.	 	PNC Bank will not modify or alter PNC Bank’s arrangements with the Customer concerning the
Blocked Account without the Administrative Agent’s prior written consent.
	 
	h.	 	PNC Bank may rely, and shall be protected in acting or refraining from acting, upon any
notice (including but not limited to electronically confirmed facsimiles of such notice)
believed by PNC Bank to be genuine and to have been given by the proper party or parties.




This Blocked Account Agreement shall not be effective until signed by the Administrative Agent,
the Customer and PNC Bank and shall then be binding upon the parties hereto and their respective
successors and assigns. Notwithstanding the foregoing, PNC Bank will not assign or transfer any of
its rights or obligations hereunder (other than to the Administrative Agent) without the prior
written consent of the Administrative Agent except PNC Bank may freely assign this Blocked Account
Agreement to any successor by merger of PNC Bank or to any financial institution that is directly
or indirectly (i) in control of PNC Bank, (ii) under the control of PNC Bank, or (iii) under
common control with PNC Bank.






3









 







In the absence of fraud or abuse on the part of the Customer or any of its subsidiaries, PNC Bank
may not terminate this Blocked Account Agreement or the Blocked Account without giving thirty (30)
days’ prior written notice thereof to both the Customer and the Administrative Agent. Upon such
termination, PNC Bank shall close the Blocked Account and transfer all funds therein and any future
instruments deposited in the Blocked Account: (i) to the Customer, prior to the Effective Time, or
(ii) to the Administrative Agent, subsequent to the Effective Time.



The Customer will indemnify PNC Bank for, and hold PNC Bank harmless from, all claims, demands,
losses, liabilities and expenses, including reasonable legal fees and expenses, resulting from or
with respect to this Blocked Account Agreement, the Blocked Account and the services provided
hereunder, except to the extent of PNC Bank’s gross negligence or willful misconduct. This
indemnification shall survive termination of this Agreement. After the Effective Time, without
limiting in any way the Administrative Agent’s obligation to pay or reimburse PNC Bank as otherwise
specified in this Blocked Account Agreement, the Administrative Agent shall indemnify PNC Bank and
hold it harmless against all claims, demands, losses, liabilities and expenses, including
reasonable legal fees and expenses, which PNC Bank shall incur as a result of honoring or following
any instruction (including the Shifting Control Notice) it shall receive from (or shall believe in
good faith to be from) the Administrative Agent under this Blocked Account Agreement, but only to
the extent (a) such loss, damage or expense does not exceed the amounts received by the
Administrative Agent following the Shifting Control Notice and (b) that PNC Bank is unable to
recover from the Blocked Account or from the Customer within ten (10) days after request for
reimbursement has been made by PNC Bank to the Customer. The Administrative Agent shall not be
responsible for any loss, damage, or expense that a court having jurisdiction shall have determined
had been caused by PNC Bank’s gross negligence or willful misconduct in its performance of its
obligations under this Blocked Account Agreement. This indemnification shall survive termination of
this Blocked Account Agreement.



PNC Bank will not be liable to the Customer or the Administrative Agent for any expense, claim,
loss, damage or cost (“Damages”) arising out of or relating to its performance under this
Blocked Account Agreement other than Damages which result directly from its acts or omissions
constituting gross negligence. In no event will PNC Bank be liable for any punitive, special,
indirect, or consequential damages, including but not limited to lost profits, even if advised of
the possibility or likelihood of such damages.



If the Customer becomes subject to a voluntary or involuntary proceeding under the United States
Bankruptcy Code, or if PNC Bank is otherwise served with legal process or becomes aware of facts
or circumstances which PNC Bank in good faith believes affects its ability to carry out the terms
of a Shifting Control Notice or the disposition of funds deposited in the Blocked Account, PNC
Bank shall have the right (a) to place a hold on funds deposited in the Blocked Account until such
time as PNC Bank receives an appropriate order from a court of competent jurisdiction or other
assurances satisfactory to PNC Bank establishing that the Shifting Control Notice may be
effectuated and/or funds may continue to be disbursed according to the instructions contained in
this Blocked Account Agreement; or (b) to commence, at the Customer’s expense, an interpleader
action in any court of competent jurisdiction and to take no
further action except in accordance with joint instructions from the Customer and the
Administrative Agent or in accordance with the final order of court in such action.







4









 







All notices and communications hereunder will be in writing and will be deemed to have been
received and will be effective on the day on which delivered (including delivery by facsimile) to
the applicable party at the address set forth below, or to such other address of which it notifies
the other parties in writing from time to time.




	 	 	 	 	 
	 

	 	Customer:
	 	Consumers Receivables Funding II, LLC

One Energy Plaza

Jackson, Michigan 49201

Attn: Treasurer

Facsimile: 517-788-8233

Telephone: 517-788-2286
	 
	 	 	 	 
	 

	 	Servicer:
	 	Consumers Energy Company

One Energy Plaza

Jackson, Michigan 49201

Attn: Treasurer

Facsimile: 517-788-8233

Telephone: 517-788-2286
	 
	 	 	 	 
	 

	 	Administrative Agent:
	 	JPMorgan Chase Bank, N.A.
	 

	 	 	 	10 South Dearborn
	 

	 	 	 	Chicago, Illinois 60670
	 

	 	 	 	Attn: Asset Backed Securities — Conduits
	 

	 	 	 	Facsimile: 312-732-3600
	 

	 	 	 	Telephone: 312-732-1174
	 
	 	 	 	 
	 

	 	Depositary Bank:
	 	PNC Bank, National Association

620 Liberty Avenue

Pittsburgh, PA 15222

Attention: Gabe Galioto

Facsimile: 412-762-6264

Telephone: 412-768-1819





This Blocked Account Agreement may be amended only by a written instrument executed by the
Customer, the Administrative Agent and PNC Bank, acting by their representative officers thereunto
duly authorized. PNC Bank will not enter into any other agreement with any other person by which
PNC Bank would be obligated to comply with the instructions of such other person as to the
disposition of funds or other dealings with the Blocked Account except in order to comply with the
order of a court of competent jurisdiction. PNC Bank agrees to give the Administrative Agent prior
written notice of any agreement PNC Bank enters into as described in the immediately preceding
sentence.



The parties hereto unconditionally and irrevocably waive any right to trial by jury in any legal
proceeding relating to any dispute arising under this Blocked Account Agreement.





5












 




PNC Bank agrees, in its capacity as a creditor of the Customer, that it shall not institute
or join any other person or entity in instituting against the Customer any involuntary case
pursuant to Title 11 of the United States Code, or any similar case under applicable state or
federal law for debts owed under this Blocked Account Agreement or in connection with the Blocked
Account prior to the date which is one year and one day after any indebtedness of the Customer for
borrowed money has been paid in full.



This Blocked Account Agreement may be executed by one or more of the parties hereto on any number
of separate counterparts, each of which when so executed shall be an original, but all of which
shall together constitute one and the same instrument.



This Blocked Account Agreement shall be governed by and construed in accordance with the laws of
the State of New York. The State of New York shall be PNC Bank’s jurisdiction for purposes of
Article 9 of the Uniform Commercial Code.




	 	 	 	 	 
	 	Very truly yours,


JPMORGAN CHASE BANK, N.A., as

Administrative Agent

 	 
	 	By:  	/s/ Patrick Menichillo
 	 
	 	 	Name:  	Patrick Menichillo 	 
	 	 	Title:  	Vice President 	 



6









 






	 	 	 	 	 


Acknowledged and agreed to this 17 day of March  , 2010.



PNC BANK, NATIONAL ASSOCIATION




	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


The Customer hereby agrees and consents to all of the terms and conditions of the foregoing Blocked
Account Agreement and authorizes and directs PNC Bank to take any and all action required or
requested by the Administrative Agent or otherwise necessary to implement and maintain compliance
with such terms and conditions.




	 	 	 	 	 
	 	CONSUMERS RECEIVABLES FUNDING II, LLC

 	 
	 	By:  	/s/ Laura L. Mountcastle
 	 
	 	 	Name:  	Laura L. Mountcastle 	 
	 	 	Title:  	President, Chief Executive Officer,

Chief Financial Officer and Treasurer 	 



7









 






	 	 	 	 	 



	 	 	 	 	 
	 	Acknowledged and agreed to this 17th day of March  , 2010.



PNC BANK, NATIONAL ASSOCIATION

 
	 	By:  	/s/ Susie Richardson
 	 
	 	 	Name:  	Susie Richardson 	 
	 	 	Title:  	Ass’t Vice President 	 
	 


The Customer hereby agrees and consents to all of the terms and conditions of the foregoing Blocked
Account Agreement and authorizes and directs PNC Bank to take any and all action required or
requested by the Administrative Agent or otherwise necessary to implement and maintain compliance
with such terms and conditions.




	 	 	 	 	 
	 	CONSUMERS RECEIVABLES FUNDING II, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



7









 





EXHIBIT A




FORM OF NOTICE



_____________ ____, ____



Facsimile No. (412) 762-6264




PNC Bank, National Association

620 Liberty Avenue

Pittsburgh, PA 15222

Attention: Gabe Galioto

     (Telephone Number 412-768-1819)





     Re: Consumers Receivables Funding II, LLC


Dear                                          :




     We hereby notify you that we are exercising our rights pursuant to that certain Blocked
Account Agreement dated March 17, 2010, among Consumers Receivables Funding II, LLC, you and us, to
have the name of, and to have the exclusive ownership and control of, account number 4006909862
maintained with you, transferred to us. Collected funds deposited in the Blocked Account should be
sent in accordance with the Blocked Account Agreement by wire transfer at the end of each day to:



     [Insert account and wire transfer information]



     We will be responsible for all fees and expenses of the account from this date.



	 	 	 	 
	 	Very truly yours,



JPMorgan Chase Bank, N.A., as

Administrative Agent

 
	 	By:  	 

	 	 	Print Name:

	 	 	Title:  

	 




 











 








EXHIBIT VII




FORM OF ASSIGNMENT AGREEMENT



     THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”) is entered into as of the ___
day of ____________, ____, by and between _____________________ (“Assignor”) and
__________________ (“Assignee”).



PRELIMINARY STATEMENTS




          A. This Assignment Agreement is being executed and delivered in accordance with [Section
12.1(a)][Section 12.1(b)] of that certain Amended and Restated Receivables Purchase
Agreement dated as of November 23, 2010 by and among Consumers Receivable Funding II, LLC, as
Seller, Consumers Energy Company, as Servicer, the Conduits party thereto from time to time, the
Financial Institutions party thereto from time to time, the Managing Agents party thereto from time
to time and JPMorgan Chase Bank, N.A., as Administrative Agent (as the same may be further amended,
restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”).
Capitalized terms used and not otherwise defined herein are used with the meanings set forth or
incorporated by reference in the Purchase Agreement.




          B. Assignor is a [Conduit][Financial Institution] party to the Purchase Agreement, and
Assignee wishes to become a [Conduit][Financial Institution] thereunder; and




          C. Assignor is selling and assigning to Assignee an undivided ____________% (the “Transferred
Percentage”) interest in all of Assignor’s rights and obligations under the Purchase Agreement and
the Transaction Documents, including, without limitation, Assignor’s [Conduit Purchase
Limit][Commitment] and (if applicable) the Capital of Assignor’s Purchaser Interests as set forth
herein.




AGREEMENT




          The parties hereto hereby agree as follows:




          1. The sale, transfer and assignment effected by this Assignment Agreement shall become
effective (the “Effective Date”) two (2) Business Days (or such other date selected by the
Administrative Agent in its sole discretion) following the date on which a notice substantially in
the form of Schedule II to this Assignment Agreement (“Effective Notice”) is
delivered by the Administrative Agent to the Purchasers and the Managing Agent[s] of the Assignor’s
and Assignee’s Purchaser Group[s]. From and after the Effective Date, (i) Assignee shall be a
[Conduit][Financial Institution] party to the Purchase Agreement for all purposes thereof as if
Assignee were an original party thereto and Assignee agrees to be bound by all of the terms and
provisions contained therein and (ii) Assignor shall, to the extent provided in this Assignment
Agreement, relinquish its rights and be released from its obligations under the Purchaser
Agreement.







Exh. VII-1









 








          2. If Assignor has no outstanding Capital under the Purchase Agreement, on the Effective Date,
Assignor shall be deemed to have hereby transferred and assigned to Assignee, without recourse,
representation or warranty (except as provided in paragraph 6 below), and the Assignee
shall be deemed to have hereby irrevocably taken, received and assumed from Assignor, the
Transferred Percentage of Assignor’s [Conduit Purchase Limit][Commitment] and all rights and
obligations associated therewith under the terms of the Purchase Agreement[, including, without
limitation, the Transferred Percentage of Assignor’s future funding obligations under Section
4.1 of the Purchase Agreement].




          3. If Assignor has any outstanding Capital under the Purchase Agreement, at or before 12:00
noon, local time of Assignor, on the Effective Date Assignee shall pay to Assignor, in immediately
available funds, an amount equal to the sum of (i) the Transferred Percentage of the outstanding
Capital of Assignor’s Purchaser Interests (such amount, being hereinafter referred to as the
“Assignee’s Capital”); (ii) all accrued but unpaid (whether or not then due) Yield attributable to
Assignee’s Capital; and (iii) accruing but unpaid fees and other costs and expenses payable in
respect of Assignee’s Capital for the period commencing upon each date such unpaid amounts commence
accruing, to and including the Effective Date (the “Assignee’s Acquisition Cost”); whereupon,
Assignor shall be deemed to have sold, transferred and assigned to Assignee, without recourse,
representation or warranty (except as provided in paragraph 6 below), and Assignee shall be deemed
to have hereby irrevocably taken, received and assumed from Assignor, the Transferred Percentage of
Assignor’s [Conduit Purchase Limit][Commitment] and the Capital of Assignor’s Purchaser Interests
(if applicable) and all related rights and obligations under the Purchase Agreement and the
Transaction Documents[, including, without limitation, the Transferred Percentage of Assignor’s
future funding obligations under Section 4.1 of the Purchase Agreement].




          4. Concurrently with the execution and delivery hereof, Assignor will provide to Assignee
copies of all documents requested by Assignee which were delivered to Assignor pursuant to the
Purchase Agreement.




          5. Each of the parties to this Assignment Agreement agrees that at any time and from time to
time upon the written request of any other party, it will execute and deliver such further
documents and do such further acts and things as such other party may reasonably request in order
to effect the purposes of this Assignment Agreement.




          6. By executing and delivering this Assignment Agreement, Assignor and Assignee confirm to and
agree with each other, the Administrative Agent and the other Financial Institutions in such
Assignor’s Purchaser Group (if applicable) as follows: (a) other than the representation and
warranty that it has not created any Adverse Claim upon any interest being transferred hereunder,
Assignor makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made by any other Person in or in connection with the
Purchase Agreement or the Transaction Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of Assignee, the Purchase Agreement or any other
instrument or document furnished pursuant thereto or the perfection, priority, condition, value or
sufficiency of any collateral; (b) Assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Seller, the Servicer, any Obligor or
any Affiliate of the Seller or the performance or






Exh. VII-2









 







observance by the Seller, the Servicer, any Obligor, or any Affiliate of the Seller of any of
their respective obligations under the Transaction Documents or any other instrument or document
furnished pursuant thereto or in connection therewith; (c) Assignee confirms that it has received a
copy of the Purchase Agreement and copies of such other Transaction Documents, and other documents
and information as it has requested and deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (d) Assignee will, independently and without
reliance upon the Administrative Agent, any Managing Agent or any Purchaser and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Purchase Agreement and the Transaction
Documents; (e) Assignee appoints and authorizes the Administrative Agent to take such action as
collateral agent on its behalf and to exercise such powers under the Transaction Documents as are
delegated to the Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (f) Assignee appoints and and authorizes [____________] as its
Managing Agent to take such action as a managing agent on its behalf and to exercise such powers
under the Transaction Documents as are delegated to the Managing Agent for the Assignee’s Purchaser
Group by the terms thereof, together with such powers as are reasonably incidental thereto; and (g)
Assignee agrees that it will perform in accordance with their terms all of the obligations which,
by the terms of the Purchase Agreement and the other Transaction Documents, are required to be
performed by it as a [Conduit][Financial Institution].




          7. Each party hereto represents and warrants to and agrees with the Administrative Agent that
it is aware of and will comply with the provisions of the Purchase Agreement, including, without
limitation, Sections 4.1, 13.5 and 13.6 thereof.




          8. Schedule I hereto sets forth the revised [Conduit Purchase Limit][Commitment] of Assignor
and the [Conduit Purchase Limit][Commitment] of Assignee, as well as administrative information
with respect to Assignee.




          9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF ILLINOIS.




          10. Assignee hereby covenants and agrees that, prior to the date which is one year and one day
after the payment in full of all outstanding senior indebtedness for borrowed money of a Conduit,
it will not institute against, or join any other Person in instituting against, such 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.







Exh. VII-3









 








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




	 	 	 	 	 
	 	[ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Acknowledged and Agreed:




	 	 	 	 	 
	[NAME OF MANAGING AGENT FOR ASSIGNOR], as a Managing Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 
	 	Title:  	 	 



	 	 	 	 	 
	[NAME OF MANAGING AGENT FOR ASSIGNEE], as a Managing Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



	 	 	 	 	 
	[NAME OF FINANCIAL INSTITUTIONS IN ASSIGNOR’S PURCHASER GROUP], as a Financial Institution

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	JPMORGAN CHASE BANK, N.A., as Administrative Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



Exh. VII-4









 






	 	 	 	 	 



SCHEDULE I TO ASSIGNMENT AGREEMENT




LIST OF COMMITMENT AMOUNTS


Date: _______________, ____



Effective Date: _______________, ____



Transferred Percentage: ________%




	 	 	 	 	 	 	 	 	 
	 	 	A-1	 	A-2	 	B-1	 	B-2
	Assignor
	 	[Conduit Purchase

Limit]

[Commitment] (prior

to giving effect to the

Assignment

Agreement)
	 	[Conduit Purchase

Limit]

[Commitment] (after

giving effect to the

Assignment

Agreement)
	 	Outstanding Capital

(if any)
	 	Ratable Share of

Outstanding Capital
	 	 	 	 	 	 	 	 	 





	 	 	 	 	 	 	 	 	 
	 	 	 	 	A-2	 	B-1	 	B-2
	 	 	 	 	 	 	 	 	 
	Assignee
	 	 	 	[Conduit Purchase

Limit]

[Commitment] (after

giving effect to the

Assignment

Agreement)
	 	Outstanding Capital

(if any)
	 	Ratable Share of

Outstanding Capital
	 	 	 	 	 	 	 	 	 





Exh. VII-5









 






SCHEDULE II TO ASSIGNMENT AGREEMENT




EFFECTIVE NOTICE




	 	 	TO: [ASSIGNOR] and [related MANAGING AGENT]
	 
	 	 	TO: [ASSIGNEE] and [related MANAGING AGENT]





     The undersigned, as Administrative Agent under the Amended and Restated Receivables Purchase
Agreement dated as of November 23, 2010 by and among Consumers Receivable Funding II, LLC, as
Seller (“Seller”), Consumers Energy Company, as Servicer, the Conduits party thereto from time to
time, the Financial Institutions party thereto from time to time, the Managing Agents party thereto
from time to time and JPMorgan Chase Bank, N.A., as Administrative Agent, hereby acknowledges
receipt of executed counterparts of a completed Assignment Agreement dated as of ____________, ____
between __________________, as Assignor, and __________________, as Assignee. Terms defined in
such Assignment Agreement are used herein as therein defined.



          1. Pursuant to such Assignment Agreement, you are advised that the Effective Date will be
______________, ___.




          2. [Each Conduit in Assignor’s Purchaser Group hereby consents to the Assignment Agreement as
required by Section 12.1(b) of the Receivables Purchase Agreement.]




          [3. Pursuant to such Assignment Agreement, the Assignee is required to pay $______________ to
Assignor at or before 12:00 noon (local time of Assignor) on the Effective Date in immediately
available funds.]




	 	 	 	 	 
	 	Very truly yours,

JPMORGAN CHASE BANK, N.A., as Administrative Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[CONDUIT]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



Exh. VII-6









 






	 	 	 	 	 



EXHIBIT VIII




CREDIT AND COLLECTION POLICY



On File with Administrative Agent.







Exh. VIII-1









 








EXHIBIT IX




FORM OF MONTHLY REPORT



(Attached)









Exh. IX-1











 





			
	
	 	






Consumers Receivables Funding II, LLC

Monthly Report




	 	 	 	 	 	 	 	 	 
	Consumers Energy Company Ratings
	 	 	S&P	 	 	 	 
	(The senior secured long-term debt securities rating without third party credit enhancement)
	 	Moody’s	 	 	 	 
	 
	 	LIBO Rate	 	 	 	 
	 
	 	Federal Funds Effective Rate	 	 	 	 
	 
	 	Prime Rate	 	 	 	 
	 
	 	Alternate Base Rate	 	 	 	 
	Monthly Report for the Month ending
	 	 	 	 	 	Month






I. Receivable Performance Ratios (update monthly)




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Actual	 	 	Trigger	 	 	Compliance	 
	3-month average Dilution Ratio
	 	 	 	 	 	 	1.75	%	 	 	 	 
	3-month average Past Due Ratio
	 	 	 	 	 	 	12.00	%	 	 	 	 
	3-month average Day Sales Outstanding
	 	 	 	 	 	 	55.00	 	 	 	 	 
	3-month average Loss-to-Liquidation Ratio
	 	 	 	 	 	 	2.50	%	 	 	 	 






II. Financial Covenants (updated in March, June, September and December for the prior quarter)




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Actual	 	 	Trigger	 	 	Compliance	 
	Total Consolidated Debt to Total Consolidated Capitilization
	 	 	 	 	 	 	0.70	 	 	 	 	 






III. Receivables Rollforward




	 	 	 	 	 

	Beginning Billed Receivables
	 	 	 	 
	Sales- Billings
	 	 	 	 
	Sales- Late Payment Charges
	 	 	 	 
	Collections
	 	 	 	 
	Collections for Company Use
	 	 	 	 
	Non-Cash Credits
	 	 	 	 
	Write-offs
	 	 	 	 
	Security Deposit Credits
	 	 	 	 
	Debit Adjustments
	 	 	 	 
	Unreconciled Difference
	 	 	 	 
	 
	 	 	 
	Ending Billed Receivables
	 	 	 	 
	Unbilled Receivables
	 	 	 	 
	 
	 	 	 
	Total Receivables
	 	 	 	 






IV. Receivables Aging




	 	 	 	 	 

	Current
	 	 	 	 
	1-30 dpd
	 	 	 	 
	31-60 dpd
	 	 	 	 
	61-90 dpd
	 	 	 	 
	91-120 dpd
	 	 	 	 
	121-150 dpd
	 	 	 	 
	151+ dpd
	 	 	 	 
	Unbilled Receivables
	 	 	 	 
	 
	 	 	 
	Total Receivables
	 	 	 	 






V. Rollforward/ Aging Balance Reconciliation




	 	 	 	 	 

	Aging Balance
	 	 	 	 
	EMPP Credits
	 	 	 	 
	WPP Credits
	 	 	 	 
	Other Unapplied Credit Balances
	 	 	 	 
	Postings with Alternate Posting Date Timing Difference
	 	 	 	 
	Ending Rollforward Balance
	 	 	 	 
	 
	 	 	 
	Difference
	 	 	 	 






VI. Eligible Receivables




	 	 	 	 	 

	Total Outstanding Balance of Receivables
	 	 	 	 
	 
	 	 	 
	Less: Charged-Off Receivables (< 60 days past due)
	 	 	 	 
	Delinquent Receivables (> 60 days past due)
	 	 	 	 
	Receivables with terms > 30 days
	 	 	 	 
	Non-USD denominated Receivables (< 60 days past due)
	 	 	 	 
	Affiliate Receivables (< 60 days past due)
	 	 	 	 
	Receivables subject to set-off (< 60 days past due)
	 	 	 	 
	Portion of Receivables subject to Intercreditor Agreement
	 	 	 	 
	WPP Receivables (< 60 days past due)
	 	 	 	 
	Bankrupt Obligors (< 60 days past due)
	 	 	 	 
	Rate I Receivables (< 60 days past due)
	 	 	 	 
	Extended, Modified and Restructured Receivables (< 60 days past due)
	 	 	 	 
	Accrued Liability from ELECTRIC rate case refunds
	 	 	 	 
	Accrued Liability from GAS rate case refunds
	 	 	 	 
	Accrued Liability from BIG ROCK rate case refunds
	 	 	 	 
	Other Ineligible Receivables (< 60 days past due)
	 	 	 	 
	 
	 	 	 
	Eligible Receivables Balance
	 	 	 	 
	 
	 	 	 





 









 







			
	
	 	






Consumers Receivables Funding II, LLC

Monthly Report




VII. Net Receivables Balance




	 	 

	Eligible Receivables Balance

	Less: Excess Obligor Concentrations (Plug figure of $3,000,000)

	Excess Unbilled Receivables Amount

	Unapplied Cash

	Unapplied Credits

	Customer Deposits

	Unbilled Receivables Offset Amount

	Excess Government Receivables Amount

	Excess Non-Energy Receivables Amount

	SPP receivables (Plug figure of $50,000,000)

	 

	Net Receivables Balance







Schedule of Defaulted Receivables




	 	 

	Defaulted Receivables







Schedule of Unbilled Receivables




	 	 	 	 	 	 

	Unbilled Receivables
	 	 	—	 
	Applicable Unbilled Receivables Limit (50% of Total Receivables)
	 	 	 	 
	Excess Unbilled Receivables Amount
	 	 	 	 






Schedule of Unbilled Receivables Offset Amount




	 	 

	Number of EMPP customers with a credit balance (1)

	Total Number of Consumers’ customers (2)

	Greater of (a) (1) / (2) and (b) 7%

	Multiplied by Unbilled Receivables (A)

	EMPP Credit amount (B)

	Unbilled Receivables Offset Amount (lesser of (A) or (B))







Schedule of Government Receivables




	 	 	 	 	 	 

	Government Receivables < 60 dpd
	 	 	 	 
	Government Receivable Concentration Limit (Lesser of (a) $20MM or (b) 5% of Eligible Rec.)
	 	 	—	 
	Excess Government Receivables Amount
	 	 	—	 






Schedule of Non-Energy Receivables




	 	 	 	 	 	 

	Non-Energy Receivables and Finance Charges < 60 dpd
	 	 	—	 
	Non-Energy Receivables Limit (Lesser of (a) $8MM or (b) 2% of Eligible Receivables)
	 	 	—	 
	Excess Non-Energy Receivables Amount
	 	 	 	 






VIII. Capital Availability




	 	 	 	 	 	 

	Net Receivables Balance
	 	 	—	 
	Less: Loss Reserve (% / $)
	 	 	 	 
	Dilution Reserve (% / $)
	 	 	 	 
	Yield & Servicer Fee Reserve (% / $)
	 	 	—	 
	Total Reserves (% / $)
	 	 	 	 
	Net Receivables Balance — Reserves
	 	 	 	 
	Applicable Maximum Purchaser Interest
	 	 	 	 
	Maximum Funding Amount
	 	 	 	 	 
	 
	 	 	 	 	 
	Maximum Funding Amount
	 	 	 	 	 
	Purchase Limit
	 	 	 	 
	Max Funding Amount
	 	 	 	 
	Current Capital Outstanding
	 	 	 	 	 
	Capital Available for Funding
	 	Fully Funded	 
	Paydown Required
	 	 	 	 	 
	 
	 	 	 	 	 
	IX. Purchaser Interest (current)
 


	 	 	 	 
	 
	 	 	 	 	 
	Request for Purchase (+) or Paydown (-)
	 	 	 	 	 
	 
	 	 	 	 	 
	Purchaser’s Interest (pro-forma)
 


	 	 	 	 
	 
	 	 	 	 
	Pro-forma Capital Outstanding
	 	$	—	 





The undersigned hereby represents and warrants that the foregoing is accurate accounting in accordance with the Receivables
Purchase Agreement dated as of May 22, 2003 and that all representations and warranties are restated and reaffirmed.




	 	 	 	 	 
	 	 	 
	Name:	 	 	 
	 	 	Title: Director of Cash Management 	 	 





 











 





EXHIBIT X




FORM OF REDUCTION NOTICE



[Date]




JPMorgan Chase Bank, N.A., as Administrative Agent and as a Managing Agent

1 Chase Plaza, Suite IL1-0079

Asset-Backed Finance

Chicago, Illinois 60670-0596

Attn: ABS Treasury




The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as a Managing Agent

1251 Avenue of Americas, 12th Floor

New York, NY 10020-1104

Attn: Securitization Group





	cc: 	 	Union Bank, N.A., as a Financial Institution

c/o Commercial Loan Operations

1980 Saturn St.

Monterey Park, CA 91754

Attn: Maria Suncin




Re:  REDUCTION NOTICE



Ladies and Gentlemen:




          Reference is hereby made to the Amended and Restated Receivables Purchase Agreement, dated as
of November 23, 2010, by and among Consumers Receivable Funding II, LLC, a Delaware limited
liability company, as the seller (the “Seller”), Consumers Energy Company, a Michigan
corporation, as the Servicer, the Conduits party thereto from time to time, the Financial
Institutions party thereto from time to time, the Managing Agents party thereto from time to time
and JPMorgan Chase Bank, N.A., as Administrative Agent (as the same may be further amended,
restated, supplemented or otherwise modified from time to time, the “Receivables Purchase
Agreement”). Capitalized terms used herein shall have the meanings assigned to such terms in
the Receivables Purchase Agreement.




     The Administrative Agent and each Managing Agent is hereby notified of the following Aggregate
Reduction:



	 	 	 	 	 
	Purchaser Group   	 	 
	 
	(identified by the related Managing Agent)	 	Amount of Reduction	 
	JPMorgan Chase Bank, N.A.
	 	$	 	 
	 
	 	 	 
	The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
New York Branch
	 	$	 	 
	 
	 	 	 
	Aggregate Reduction:
	 	$	 	 
	 
	 	 	 





Exh. X-1









 





Proposed Reduction Date: [                      ]




     The Aggregate Reduction set forth above will be made in available funds on the Proposed
Reduction Date (by 12:00 noon New York time) to each Managing Agent (on behalf of the Purchasers in
such Managing Agent’s Purchaser Group):



JPMorgan Chase Bank, N.A. Purchaser Group




Account Title: Falcon Asset Securitization LLC

JPMorgan Chase Bank, N.A.

ABA Number: 021-000-021

Account Number: 5114810

SWIFT Address: CHASUS33XXX

Reference: Consumers Receivables Funding II, LLC




The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch Purchaser Group




Deutsche Bank Trust Company Americas

ABA Number: 021-001-033

Account Number: 01419647

Beneficiary: Trust and Securities Services

Payment Details: PORT VICTORY.20




     In connection with the Aggregate Reduction to be made on the Proposed Reduction Date, the
Seller hereby certifies that the following statements are true on the date hereof, and will be true
on the Proposed Reduction Date (before and after giving effect to the proposed Aggregate
Reduction):



          (i) the representations and warranties of the Seller set forth in Section 5.1 of the
Receivables Purchase Agreement are true and correct on and as of the Proposed Reduction Date as
though made on and as of such date;




Exh. X-2









 








          (ii) no event has occurred and is continuing, or would result from the proposed Aggregate
Reduction, that will constitute an Amortization Event or a Potential Amortization Event; and




          (iii) the Amortization Date has not occurred, the Aggregate Capital does not exceed the
Purchase Limit and the aggregate Purchaser Interests do not exceed the Applicable Maximum Purchaser
Interest.




          After giving effect to such Aggregate Reduction made on the Proposed Reduction Date, the
Aggregate Capital is $[                ].




	 	 	 	 	 
	 	Very truly yours,



CONSUMERS RECEIVABLES FUNDING II, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



Exh. X-3









 






	 	 	 	 	 



EXHIBIT XI




FORM OF P.O. BOX TRANSFER NOTICE



(Attached)



Exh. XI-1









 





United States Postal Service

[Address of Post Office]



Re: Zip Code: Lansing, MI 48937-0001



[Date]



Dear Sir or Madam:





     Please be informed that Consumers Energy Company, the customer for Zip Code: Lansing, MI
48937-0001 hereby requests that effective immediately the customer for Zip Code: Lansing, MI
48937-0001 be changed to JPMorgan Chase Bank, N.A., as Administrative Agent for the benefit of (i)
the Purchasers under that certain Amended and Restated Receivables Purchase Agreement dated
November 23, 2010, (ii) The Bank of New York, or any successor thereto, as trustee (the “Bond
Trustee”) under the Indenture dated as of November 8, 2001 between Consumers Funding LLC and
the Bond Trustee, as supplemented, and (iii) Consumers Funding LLC, as issuer of the Securitization
Bonds under the Indenture.


Thank you.




	 	 	 	 	 
	 	CONSUMERS ENERGY COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




     JPMorgan Chase Bank, N.A., as customer for Zip Code: Lansing, MI 48937-0001 hereby gives
notice that effective immediately, only authorized representatives (as determined by the
branch managers or officers of such organization) of the organizations listed are authorized to
accept mail addressed to this post office box, to change the keys for this post office box, or
otherwise instruct you with respect to this post office box:



[List follows on next page]







Exh. XI-2









 








	 	 	 	 

	Name of Individual or Organization

	 	Contact Number
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 






	 	 	 	 	 
	 	Thank you.



JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



Exh. XI-3









 






	 	 	 	 	 



EXHIBIT XII




FORM OF DAILY REPORT



(Attached)



Exh. XII-1









 







Exhibit XII to Receivables Purchase Agreement Consumers Date

Daily Receivables Report





	I.	 	Daily Receivables Rollforward





	 	 	 	 	 

	Beginning Receivables (Ending Receivables Balance from prior Weekly Report)
	 	 	 	 
	 
	 	 	 
	Add: Receivables (billed invoices)
	 	 	 	 
	 
	 	 	 
	Receivables (unbilled = deliveries at sales or estimated price)
	 	 	 	 
	 
	 	 	 
	Less: Cash Collections
	 	 	 	 
	 
	 	 	 
	Dilutions (all issued credits)
	 	 	 	 
	 
	 	 	 
	Charged-Off Receivables (<61 days past-due)
	 	 	 	 
	 
	 	 	 
	Ending Receivables Balance
	 	 	 	 
	 
	 	 	 







	II.	 	Net Receivables Balance





	 	 	 	 	 

	Eligible Receivables Pool Balance (from most recent Monthly Report)
	 	 	 	 
	Excess Concentrations (from most recent Monthly Report)
	 	 	 	 
	Originator Receivables Pool Balance (from most recent Monthly Report)
	 	 	 	 
	Weekly Eligible Receivables Pool Ratio
	#DIV/0!	 	 
	Weekly Excess Concentrations Ratio
	#DIV/0!	 	 






	 	 	 	 	 	 

	Weekly Eligible Receivables Pool Balance
	 	#DIV/0!	 
	Less: Weekly Excess Concentrations
	 	#DIV/0!	 
	 
	 	 	 	 
	Net Receivables Balance (“NRB”)
	 	#DIV/0!	 







	III.	 	Calculation of Potential Capital





	 

	Loss Reserve % (from most recent Monthly Report)

	Dilution Reserve % (from most recent Monthly Report)

	Discount Reserve % (from most recent Monthly Report)

	Minimum Seller Interest







	 	 	 	 	 	 	 	 	 	 

	Net Receivables Balance (from II above)
	 	 	 	 	 	#DIV/0!	 
	Weekly Loss Reserve
	 	#DIV/0!	 	 	 	 	 
	Weekly Dilution Reserve
	 	#DIV/0!	 	 	 	 	 
	Weekly Discount Reserve
	 	#DIV/0!	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Less: Weekly Aggregate Reserves
	 	 	 	 	 	#DIV/0!	 
	Less: Weekly Minimum Seller Interest
	 	 	 	 	 	#DIV/0!	 
	 
	 	 	 	 	 	 	 	 
	Potential Capital (this weekly report)
	 	 	 	 	 	#DIV/0!	 







	IV.	 	Purchase Facility — Increases/Decreases





	 	 	 	 	 	 	 	 	 	 	 	 	 

	Facility Limit
	 	 	250,000,000	 	 	 	 	 	 	 	 	 
	Potential Capital (maximum available funding)
	 	 	 	 	 	#DIV/0!	 	 	 	 
	Capital Outstanding total all Purchasers (immediately prior to this Report date)
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Excess / (Shortfall)
	 	 	 	 	 	#DIV/0!	 	 	 	 
	Available Funding Increase
	 	 	 	 	 	#DIV/0!	 	 	 	 
	Required Capital Paydown
	 	 	 	 	 	#DIV/0!	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Current Purchaser Interest (net of Minimum Seller Interest must be <95%)
	 	#DIV/0!	 	In Compliance?	 	#DIV/0!
	Potential Purchaser Interest (net of Minimum Seller Interest must be <95%)
	 	#DIV/0!	 	In Compliance?	 	#DIV/0!
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Is a Purchase being requested?
	 	#DIV/0!	 	 	 	 	 	 	 	 
	Falcon/PREFCO Related Group Pro Rata Share
	 	 	100.00	%	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Purchase Notice Request for PREFCO     #DIV/0!
	 	 	 	 	 	 	 	 	 	 	 	 
	Reduction Notice Request for PREFCO   #DIV/0!
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Purchase Notice Request for      
              #DIV/0!
	 	 	 	 	 	 	 	 	 	 	 	 
	Reduction Notice Request for
                  #DIV/0!
	 	 	 	 	 	 	 	 	 	 	 	 





The undersigned hereby represent and warrants that the foregoing is a true and accurate
accounting with respect to the outstandings of Consumers Energy Co in accordance with the conformed Receivables Purchase Agreement
date as of February 12. 2009 and that all Representations and Warranties are restated and reaffirmed.




	 	 	 	 	 
	 	 	 
	   Signed by: 	
 	 	 




Exh. XII-2









 





     Title: Authorized Officer



Exh. XII-3









 





EXHIBIT XIII




FORM OF JOINDER AGREEMENT



          Reference is made to that certain Amended and Restated Receivables Purchase Agreement dated as
of November 23, 2010 (as the same may be further amended, restated, supplemented or otherwise
modified from time to time, the “Receivables Purchase Agreement”), by and among Consumers
Receivable Funding II, LLC, a Delaware limited liability company, as the seller (the
“Seller”), Consumers Energy Company, a Michigan corporation, as the servicer (the
“Servicer”), the Purchasers party thereto from time to time, the Managing Agents party
thereto from time to time and JPMorgan Chase Bank, N.A., as Administrative Agent. To the extent
not defined herein, capitalized terms used herein have the meanings assigned to such terms in the
Receivables Purchase Agreement.




                               (the “New Managing Agent”),                      (the “New Conduit[s]”),
                     (the “New Financial Institution[s]”; and together with the New Managing Agent
and the New Conduit[s], the “New Purchaser Group”) and the Administrative Agent agree as follows:




          1. The Seller has requested that the New Purchaser Group become a “Purchaser Group” under the
Receivables Purchase Agreement.




          2. The effective date (the “Effective Date”) of this Joinder Agreement shall be the
later of (i) the date on which a fully executed copy of this Joinder Agreement is delivered to the
Administrative Agent and the Seller and (ii) the date of this Joinder Agreement.




          3. By executing and delivering this Joinder Agreement, each of the New Managing Agent, the New
Conduit[s] and the New Financial Institution[s] (i) confirms that it has received a copy of the
Receivables Purchase Agreement and such Transaction Documents and other documents and information
requested by it, and that it has, independently and without reliance upon the Seller, the Servicer,
any Purchaser, any Managing Agent or the Administrative Agent, and based on such documentation and
information as it has deemed appropriate, made its own decision to enter into this Joinder
Agreement; (ii) agrees that it shall, independently and without reliance upon the Seller, the
Servicer, any Purchaser, any Managing Agent or the Administrative Agent, and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Transaction Documents; (iii) appoints and
authorizes the Administrative Agent to take such action as the administrative agent on its behalf
and to exercise such powers and discretion under the Transaction Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers and discretion as
are reasonably incidental thereto; (iv) agrees that it shall perform in accordance with their terms
all of the obligations that by the terms of the Receivables Purchase Agreement and the other
Transaction Documents are required to be performed by it as a Managing Agent, Conduit and Financial
Institution, respectively; (v) specifies as its address for notices the office set forth beneath
its name on the signature pages of this Joinder Agreement; and (vi), in the case of the New
Conduit[s] and the New Financial Institution[s], appoints and authorizes the New Managing Agent as
its Managing Agent to take such action as a managing agent on its behalf and to exercise such
powers under the Transaction






Exh. XIII-1









 







Documents, as are delegated to the Managing Agents by the terms thereof together with such
powers that are reasonably incidental thereto.




          4. On the Effective Date of this Joinder Agreement, the New Managing Agent shall join in and
be a party to the Fee Letter and each of the New Managing Agent, the New Conduit[s] and the New
Financial Institution[s] shall join in and be a party to the Receivables Purchase Agreement and, to
the extent provided in this Joinder Agreement, shall be entitled to the rights and subject to the
obligations of a Managing Agent, a Conduit and a Financial Institution, respectively, under the Fee
Letter and the Receivables Purchase Agreement. Schedule A to the Receivables Purchase
Agreement shall be amended and restated in its entirety as set forth on Schedule I hereto,
and Schedule II to this Joinder Agreement sets forth the notice address for each of the
parties in the New Purchaser Group.




          5. This Joinder Agreement may be executed by one or more of the parties on any number of
separate counterparts, and all of said counterparts taken together shall be deemed to constitute
one and the same instrument.




          6. This Joinder Agreement shall be governed by and construed in accordance with the internal
laws (and not the law of conflicts) of the State of Illinois.




          7. Any term or provision of this Joinder Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms and provisions of
this Joinder Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Joinder Agreement in any other jurisdiction. If any provision of this Joinder
Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so
broad as would be enforceable.




          8. Each member of the New Purchaser Group hereby agrees that it will promptly execute and
deliver all instruments and documents, and take all actions, that may be reasonably necessary or
desirable, or that the Administrative Agent or any Seller Party may reasonably request, to more
fully evidence this Joinder Agreement or the transactions contemplated hereby. The Administrative
Agent and the Seller Parties shall each be a third-party beneficiary of this Joinder Agreement.




* * * * *








Exh. XIII-2









 








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




	 	 	 	 	 
	NEW CONDUIT[S]: 	
 [NEW CONDUIT]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	NEW FINANCIAL INSTITUTION[S]: 	 [NEW FINANCIAL INSTITUTION]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	NEW MANAGING AGENT: 	 [NEW MANAGING AGENT]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



Exh. XIII-3









 






	 	 	 	 	 



Consented to this       day of                     , 20       by:




	 	 	 	 	 
	JPMORGAN CHASE BANK, N.A., as a Managing

Agent and as Administrative Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 



	 	 	 	 	 
	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

NEW YORK BRANCH, as a Managing Agent

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 



	 	 	 	 	 
	CONSUMERS RECEIVABLES FUNDING II, LLC, as Seller

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 



	 	 	 	 	 
	CONSUMERS ENERGY COMPANY, as Servicer

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 



Exh. XIII-4









 






	 	 	 	 	 



Schedule I

to

Joinder Agreement




SCHEDULE A

COMMITMENTS; PURCHASER GROUPS


Dated                    , 20      




	 	 	 	 	 

	[               ] Purchaser Group
	 	 	 	 
	Managing Agent:
	 	 	[                    ]	 
	Group Purchase Limit:
	 	$	[               ]	 
	Conduit:
	 	 	[                    ]	 
	Conduit Purchase Limit:
	 	$	[               ]	 
	Financial Institution:
	 	 	[                    ]	 
	Commitment:
	 	$	[               ]	 
	 
	 	 	 	 
	[               ] Purchaser Group
	 	 	 	 
	 
	 	 	 	 
	Managing Agent:
	 	 	[                    ]	 
	Group Purchase Limit:
	 	$	[               ]	 
	Conduit:
	 	 	[                    ]	 
	Conduit Purchase Limit:
	 	$	[               ]	 
	Financial Institution:
	 	 	[                    ]	 
	Commitment:
	 	$	[               ]	 
	 
	 	 	 	 
	[               ] Purchaser Group
	 	 	 	 
	Managing Agent:
	 	 	[                    ]	 
	Group Purchase Limit:
	 	$	[               ]	 
	Conduit:
	 	 	[                    ]	 
	Conduit Purchase Limit:
	 	$	[               ]	 
	Financial Institution:
	 	 	[                    ]	 
	Commitment:
	 	$	[               ]	 







Exh. XIII-5









 






Schedule II

to

Joinder Agreement



Dated                     , 20      




ADDRESSES FOR NOTICES




NEW MANAGING AGENT

[                      ]




NEW CONDUIT

[                      ]




NEW FINANCIAL INSTITUTION

[                     ]




 









 





SCHEDULE A




COMMITMENTS OF PURCHASER GROUPS


JPMorgan Chase Bank, N.A. Purchaser Group:




	 	 	 

	Managing Agent: 

Group Purchase Limit: 

Conduit: 

Conduit Purchase Limit: 

Financial Institution: 

Commitment:

	 	JPMorgan Chase Bank, N.A.

$150,000,000

Falcon Asset Securitization Company LLC

$150,000,000

JPMorgan Chase Bank, N.A.

$150,000,000





The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch Purchaser Group:




	 	 	 

	Managing Agent: 

Group Purchase Limit: 

Conduit: 

Conduit Purchase Limit: 

Financial Institution: 

Commitment:

	 	The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

$100,000,000

Victory Receivables Corporation

$100,000,000

Union Bank, N.A.

$100,000,000








 











 





SCHEDULE B




CLOSING DOCUMENTS



(Attached)



 









 





Amended And Restated Receivables Purchase Facility




among 



Consumers Receivables Funding II, LLC,

as Seller,



Consumers Energy Company,

as Servicer,



The Conduits, Financial Institutions and Managing Agents

Party Thereto From Time to Time



and



JPMorgan Chase Bank, N.A.,

as Administrative Agent



November 23, 20101



LIST OF CLOSING DOCUMENTS





 




			
	1	 	Each capitalized term used herein and not
defined herein shall have the meaning assigned to such term in the RPA. Unless
otherwise indicated, all documents are dated as of the closing date.




 









 












	 	 	FACILITY DOCUMENTS
	 
	1.	 	Amended and Restated Receivables Purchase Agreement (the “RPA”) among Consumers
Receivables Funding II, LLC (“Seller”), Consumers Energy Company
(“Consumers”), in its capacity as Servicer (in such capacity, the
“Servicer”), the Conduits, Financial Institutions and Managing Agents from time to
time parties hereto and JPMorgan Chase Bank, N.A (“JPM”), as a Financial
Institution and as Administrative Agent (in such capacity, the “Administrative
Agent”).





	 	 	 

	Exhibit I

	 	Definitions
	 
	 	 
	Exhibit II

	 	Form of Purchase Notice
	 
	 	 
	Exhibit III

	 	Places of Business of the Seller Parties; Location(s) of
Records; Organizational and 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
	 
	 	 
	Exhibit XII

	 	Form of Daily Report
	 
	 	 
	Exhibit XIII

	 	Form of Joinder Agreement
	 
	 	 
	Schedule A

	 	Commitments
	 
	 	 
	Schedule B

	 	Closing Documents
	 
	 	 
	Schedule C

	 	Financial Covenant Definitions






 









 







	2.	 	Amendment No. 7 to Receivables Sale Agreement (the “Amendment to RSA”) between
the Originator, the Buyer and consented to by the Administrative Agent.
	 
	3.	 	Receivables Sale Agreement (the “RSA”) dated as of May 22, 2003 between the
Originator and the Buyer, together with Amendment Nos. 1-6.





	 	 	 

	Exhibit I

	 	Definitions
	 
	 	 
	Exhibit II

	 	Places of Business; Location(s) of Records; Organizational and
Federal Employer Identification Numbers; Other Names
	 
	 	 
	Exhibit III

	 	Lock-Boxes; Collection Accounts, Collection Banks; Specified
Accounts
	 
	 	 
	Exhibit IV

	 	Form of Compliance Certificate
	 
	 	 
	Exhibit V

	 	Credit and Collection Policy
	 
	 	 
	Exhibit VI

	 	Form of Subordinated Note
	 
	 	 
	Exhibit VII

	 	Form of UCC-3
	 
	 	 
	Schedule A

	 	List of Documents to be delivered to Buyer Prior to the
Purchase







	4.	 	Amended and Restated Subordinated Note (the “Subordinated Note”) executed by
the Seller in favor of Consumers.
	 
	5.	 	Intercreditor Agreement (the “Intercreditor Agreement”) dated as of May 22,
2003 executed by the Administrative Agent, the Purchasers, the Bank of New York, Consumers
Funding LLC, the Seller and Consumers, together with:






	 	(i)	 	Consent of Bond Trustee under Intercreditor Agreement to termination
or amendment of Lock-Box Agreements.
	 
	 	(ii)	 	Opinion of Michael D. VanHemert, in-house counsel to Seller and
Consumers, relating to execution of Intercreditor Agreement.
	 
	 	(iii)	 	Satisfaction of Rating Agency Condition (as defined in the
Intercreditor Agreement) with respect to execution of Intercreditor
Agreement.





 









 






	6.	 	Servicing Agreement dated as of November 8, 2001 between Consumers Funding LLC and
Consumers Energy Company, as the same may be amended, restated, supplemented or otherwise
modified from time to time with the consent of the Administrative Agent and each Managing
Agent (to the extent such consent is required by the terms of this Agreement).
	 
	7.	 	Collection Account Agreement among the Originator, Seller, Servicer, Administrative
Agent and each of the following collection banks in regards to the identified account(s):





	 	 	 	 	 	 	 	 	 
	 	 	Collection	 	 	Specified	 
	Collection Bank 	 	Account	 	 	Account	 
	JP Morgan Chase Bank
	 	 	1242263	 	 	 	 	 
	Comerica Bank
	 	 	1076119914	 	 	 	 	 
	Bank of America
	 	 	1054516142	 	 	 	4825285820	 
	Wachovia Bank
	 	 	2000032635920	 	 	 	 	 
	PNC Bank, National Association
	 	 	 	 	 	 	4006909862	 
	Fifth Third Bank
	 	 	 	 	 	 	7164496916	 







	8.	 	Fee Letter among the Seller, the Managing Agents and JPM, as Administrative Agent.
	 
	 	 	CORPORATE DOCUMENTS
	 
	9.	 	Certificate of the Secretary of Seller certifying (i) a copy of the Certificate of
Formation of Seller (attached thereto), certified as of a recent date by the Secretary of
State of the State of Delaware, (ii) a copy of the limited liability company agreement of
Seller (attached thereto), (iii) a copy of the written consent of the board of directors of
Seller (attached thereto) authorizing the execution, delivery and performance of the RPA,
Amendment to RSA, Subordinated Note, and any other document to be delivered by it in
connection with such agreements, and (iv) the names and signatures of the officers
authorized on its behalf to execute the RPA, Amendment to RSA, Subordinated Note, and any
other document to be delivered by it in connection with such agreements.
	 
	10.	 	Good Standing Certificates for Seller issued by the Secretaries of State of Delaware
and Michigan.
	 
	11.	 	Certificate of the Secretary of Consumers certifying (i) a copy of the Articles of
Incorporation of Consumers (attached thereto), certified as of a recent date by the
Secretary of State of the State of Michigan, (ii) a copy of the by-laws of Consumers




 









 












	 	 	(attached thereto), (iii) a copy of the written consent of the board of directors of
Consumers (attached thereto) authorizing the execution, delivery and performance of the
RPA, Amendment to RSA, and any other document to be delivered by it in connection with such
agreements, and (iv) the names and signatures of the officers authorized on its behalf to
execute the RPA, Amendment to RSA, and any other document to be delivered by it in
connection with such agreements.
	 
	12.	 	Good Standing Certificate for Consumers issued by the Secretary of State of Michigan.
	 
	 	 	UCC Documents
	 
	13.	 	UCC Lien Search Reports for the Seller and Consumers from the office of the Secretary
of State of Delaware and Michigan, respectively.
	 
	14.	 	UCC-3 Financing Statement amending and restating the collateral description on the
UCC-1 Financing Statement number 3131731 5 filed on May 22, 2003 in the office of the
Delaware Secretary of State against the Seller.
	 
	15.	 	UCC-3 Financing Statement terminating UCC-1 Financing Statement number 3131734 9 filed
on May 22, 2003 in the office of the Delaware Secretary of State against Consumers
Receivables Funding, LLC.
	 
	16.	 	UCC-3 Financing Statement terminating UCC-1 Financing Statement number 35661C filed on
April 1, 2002 in the office of the Michigan Secretary of State against Consumers Energy
Company.
	 
	17.	 	Post-filing UCC Lien Search Reports evidencing the recording of the above UCC-3
Financing Statements.
	 
	 	 	OPINIONS
	 
	18.	 	Opinion of Kimberly Wilson, in-house counsel to Seller and Consumers relating to issues
of (i) corporate matters and (ii) perfection and priority of security interest perfected in
the State of Michigan
	 
	19.	 	Reliance letter of Skadden, Arps, Slate, Meagher & Flom, LLP counsel to Seller and
Consumers, relating to reliance on the May 22, 2003 opinion regarding issues of true sale
and non-consolidation.
	 
	20.	 	Opinion of Sidley Austin LLP, counsel to the Administrative Agent, relating to
enforceability, creation and perfection and priority of security interest perfected in the
State of Delaware.
	 
	21.	 	Reliance letter of Sidley Austin LLP, counsel to the Administrative Agent, relating to
reliance on the May 22, 2003 opinion regarding issues of enforceability, creating and
perfection and priority of security interests perfected in the State of Delaware.
	 
	 	 	MISCELLANEOUS




 









 












	22.	 	Partial Release Authorization Letter among Administrative Agent, Falcon and JPMorgan
Chase Bank as Trustee under the Indenture.




LIQUIDITY DOCUMENTATION (DISTRIBUTED TO SIGNATORIES ONLY)





	23.	 	Amended and Restated Liquidity Asset Purchase Agreement between Falcon and JPM.
(distributed to signatories only)
	 
	24.	 	Liquidity Asset Purchase Agreement among Victory, Union Bank and BTMU. (distributed to
signatories only)
	 
	 	 	POST-CLOSING ITEMS
	 
	25.	 	Letter Notice regarding Intercreditor Agreement among the Administrative Agent, the
Purchasers, The Bank of New York Mellon (formerly, The Bank of New York), Consumers Funding
LLC, the Seller and Consumers.
	 
	26.	 	Collection Account Agreement among the Originator, Seller, Servicer, Administrative
Agent and each of the following collection banks in regards to the identified account(s):





	 	 	 	 	 	 	 	 	 
	Collection Bank	 	Collection	 	 	Specified	 
	 	 	Account	 	 	Account	 
	JP Morgan Chase Bank
	 	 	1242263	 	 	 	 	 
	Comerica Bank
	 	 	1076119914	 	 	 	 	 







 











 





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.



 









 





     “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,



 









 




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



 









 




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.



 









 





     “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



 









 




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.





 











 





	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	ARTICLE I PURCHASE ARRANGEMENTS	 	 	2	 
	 
	 	 	 	 	 	 
	Section 1.1
	 	Purchase Facility	 	 	2	 
	Section 1.2
	 	Increases	 	 	2	 
	Section 1.3
	 	Decreases	 	 	3	 
	Section 1.4
	 	Payment Requirements	 	 	3	 
	 
	 	 	 	 	 	 
	ARTICLE II PAYMENTS AND COLLECTIONS	 	 	4	 
	 
	 	 	 	 	 	 
	Section 2.1
	 	Payments	 	 	4	 
	Section 2.2
	 	Collections Prior to Amortization	 	 	4	 
	Section 2.3
	 	Terminating Financial Institutions	 	 	6	 
	Section 2.4
	 	Collections Following Amortization	 	 	6	 
	Section 2.5
	 	Application of Collections	 	 	6	 
	Section 2.6
	 	Payment Rescission	 	 	7	 
	Section 2.7
	 	Maximum Purchaser Interests	 	 	7	 
	Section 2.8
	 	Clean Up Call	 	 	7	 
	Section 2.9
	 	Payment Allocations	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE III CONDUIT FUNDING	 	 	8	 
	 
	 	 	 	 	 	 
	Section 3.1
	 	Yield	 	 	8	 
	Section 3.2
	 	Payments	 	 	8	 
	Section 3.3
	 	Calculation of Yield	 	 	8	 
	 
	 	 	 	 	 	 
	ARTICLE IV FINANCIAL INSTITUTION FUNDING	 	 	8	 
	 
	 	 	 	 	 	 
	Section 4.1
	 	Financial Institution Funding	 	 	8	 
	Section 4.2
	 	Yield Payments	 	 	8	 
	Section 4.3
	 	Selection and Continuation of Tranche Periods	 	 	8	 
	Section 4.4
	 	Financial Institution Bank Rates	 	 	9	 
	Section 4.5
	 	Suspension of the LIBO Rate	 	 	9	 
	Section 4.6
	 	Liquidity Agreement Fundings	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES	 	 	10	 
	 
	 	 	 	 	 	 
	Section 5.1
	 	Representations and Warranties of The Seller Parties	 	 	10	 
	Section 5.2
	 	Financial Institution Representations and Warranties	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE VI CONDITIONS OF PURCHASES	 	 	14	 
	 
	 	 	 	 	 	 
	Section 6.1
	 	Conditions Precedent to Effectiveness of this Agreement	 	 	14	 
	Section 6.2
	 	Conditions Precedent to All Purchases and Reinvestments	 	 	15	 
	 
	 	 	 	 	 	 
	ARTICLE VII COVENANTS	 	 	16	 
	 
	 	 	 	 	 	 
	Section 7.1
	 	Affirmative Covenants of The Seller Parties	 	 	16	 
	Section 7.2
	 	Negative Covenants of the Seller Parties	 	 	25	 
	 
	 	 	 	 	 	 





Page i









 






	 	 	 	 	 	 	 

	ARTICLE VIII ADMINISTRATION AND COLLECTION	 	 	27	 
	 
	 	 	 	 	 	 
	Section 8.1
	 	Designation of Servicer	 	 	27	 
	Section 8.2
	 	Duties of Servicer	 	 	28	 
	Section 8.3
	 	Collection Notices	 	 	29	 
	Section 8.4
	 	Responsibilities of Seller	 	 	29	 
	Section 8.5
	 	Reports	 	 	30	 
	Section 8.6
	 	Servicing Fees	 	 	30	 
	 
	 	 	 	 	 	 
	ARTICLE IX AMORTIZATION EVENTS	 	 	30	 
	 
	 	 	 	 	 	 
	Section 9.1
	 	Amortization Events	 	 	30	 
	Section 9.2
	 	Remedies	 	 	32	 
	 
	 	 	 	 	 	 
	ARTICLE X INDEMNIFICATION	 	 	33	 
	 
	 	 	 	 	 	 
	Section 10.1
	 	Indemnities by the Seller	 	 	33	 
	Section 10.2
	 	Indemnities by the Servicer	 	 	35	 
	Section 10.3
	 	Increased Cost and Reduced Return	 	 	36	 
	Section 10.4
	 	Other Costs and Expenses	 	 	37	 
	Section 10.5
	 	Accounting Based Consolidation Event	 	 	37	 
	 
	 	 	 	 	 	 
	ARTICLE XI THE AGENT	 	 	38	 
	 
	 	 	 	 	 	 
	Section 11.1
	 	Authorization and Action	 	 	38	 
	Section 11.2
	 	Delegation of Duties	 	 	38	 
	Section 11.3
	 	Exculpatory Provisions	 	 	38	 
	Section 11.4
	 	Reliance by the Administrative Agent and the Managing Agents	 	 	39	 
	Section 11.5
	 	Non-Reliance on Administrative Agent, the Managing Agents and Other Purchasers	 	 	39	 
	Section 11.6
	 	Reimbursement and Indemnification	 	 	40	 
	Section 11.7
	 	Administrative Agent and Managing Agents in their Individual Capacity	 	 	40	 
	Section 11.8
	 	Successor Administrative Agent	 	 	41	 
	Section 11.9
	 	Successor Managing Agent	 	 	41	 
	 
	 	 	 	 	 	 
	ARTICLE XII ASSIGNMENTS; PARTICIPATIONS	 	 	41	 
	 
	 	 	 	 	 	 
	Section 12.1
	 	Assignments	 	 	41	 
	Section 12.2
	 	Participations	 	 	43	 
	Section 12.3
	 	Additional Purchaser Groups	 	 	43	 
	Section 12.4
	 	Extension of Liquidity Termination Date	 	 	43	 
	Section 12.5
	 	Terminating Financial Institutions	 	 	44	 
	Section 12.6
	 	USA Patriot Act Certification	 	 	44	 
	Section 12.7
	 	Federal Reserve	 	 	44	 
	Section 12.8
	 	Closing Date Assignments	 	 	45	 
	 
	 	 	 	 	 	 
	ARTICLE XIII MISCELLANEOUS	 	 	45	 
	 
	 	 	 	 	 	 
	Section 13.1
	 	Waivers and Amendments	 	 	45	 






Page ii









 






	 	 	 	 	 	 	 

	Section 13.2
	 	Notices	 	 	46	 
	Section 13.3
	 	Ratable Payments	 	 	47	 
	Section 13.4
	 	Protection of Ownership Interests of the Purchasers	 	 	47	 
	Section 13.5
	 	Confidentiality	 	 	48	 
	Section 13.6
	 	Bankruptcy Petition	 	 	48	 
	Section 13.7
	 	Limitation of Liability	 	 	49	 
	Section 13.8
	 	CHOICE OF LAW	 	 	49	 
	Section 13.9
	 	CONSENT TO JURISDICTION	 	 	49	 
	Section 13.10
	 	WAIVER OF JURY TRIAL	 	 	50	 
	Section 13.11
	 	Integration; Binding Effect; Survival of Terms	 	 	50	 
	Section 13.12
	 	Counterparts; Severability; Section References	 	 	50	 
	Section 13.13
	 	Agent Roles	 	 	50	 
	Section 13.14
	 	Characterization	 	 	51	 
	Section 13.15
	 	Intercreditor Agreement	 	 	52	 
	Section 13.16
	 	Accounting Terms	 	 	52	 
	Section 13.17
	 	USA Patriot Act	 	 	53	 
	Section 13.18
	 	Required Ratings	 	 	53	 
	Section 13.19
	 	Amendment and Restatement	 	 	53	 






	 	 	 

	 
	 	 
	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
	Exhibit XII
	 	Form of Daily Report
	Exhibit XIII
	 	Form of Joinder Agreement
	 
	 	 
	Schedule A
	 	Commitments
	Schedule B
	 	Closing Documents
	Schedule C
	 	Financial Covenant Definitions







Page iii