EXHIBIT 10(b)
SERVICING AGREEMENT
SERVICING AGREEMENT
between
CONSUMERS FUNDING LLC
Issuer
and
CONSUMERS ENERGY COMPANY
Servicer
Dated as of November 8, 2001
TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01 Definitions..............................................................1
SECTION 1.02 Other Definitional Provisions............................................1
ARTICLE II
Appointment and Authorization of Servicer
SECTION 2.01 Appointment of Servicer; Acceptance of Appointment.......................2
SECTION 2.02 Authorization............................................................2
SECTION 2.03 Dominion and Control over Transferred Securitization Property............2
ARTICLE III
Billing Services
SECTION 3.01 Duties of Servicer.......................................................3
SECTION 3.02 Collection and Allocation of the Securitization Charges..................4
SECTION 3.03 Payment of Securitization Charge Collections.............................5
SECTION 3.04 Servicing and Maintenance Standards......................................5
SECTION 3.05 Servicer's Certificates..................................................6
SECTION 3.06 Annual Statement as to Compliance........................................6
SECTION 3.07 Annual Independent Certified Public Accountants' Report..................6
SECTION 3.08 Securitization Property Documentation....................................7
SECTION 3.09 Computer Records; Audits of Documentation................................7
SECTION 3.10 Defending Transferred Securitization Property Against Claims.............8
SECTION 3.11 Opinions of Counsel......................................................8
ARTICLE IV
Services Related to Securitization Charge Adjustments
SECTION 4.01 Securitization Charge Adjustments........................................9
ARTICLE V
The Servicer
SECTION 5.01 Representations and Warranties of Servicer...............................9
SECTION 5.02 Indemnities of Servicer; Release of Claims..............................11
SECTION 5.03 Merger or Consolidation of, or Assumption of the Obligations of, .......13
SECTION 5.04 Assignment of Servicer's Obligations....................................14
SECTION 5.05 Limitation on Liability of Servicer.....................................14
SECTION 5.06 Consumers Not To Resign as Servicer.....................................15
SECTION 5.07 Monthly Servicing Fee...................................................15
SECTION 5.08 Servicer Expenses.......................................................15
SECTION 5.09 Subservicing............................................................15
SECTION 5.10 No Servicer Advances....................................................15
SECTION 5.11 Remittances.............................................................15
SECTION 5.12 Protection of Title.....................................................16
ARTICLE VI
Servicer Default
SECTION 6.01 Servicer Default........................................................16
SECTION 6.02 Notice of Servicer Default..............................................18
SECTION 6.03 Waiver of Past Defaults.................................................18
SECTION 6.04 Appointment of Successor................................................18
SECTION 6.05 Cooperation with Successor..............................................19
ARTICLE VII
Miscellaneous Provisions
SECTION 7.01 Amendment...............................................................19
SECTION 7.02 Notices.................................................................20
SECTION 7.03 Limitations on Rights of Others.........................................20
SECTION 7.04 Severability............................................................20
SECTION 7.05 Separate Counterparts...................................................21
SECTION 7.06 Headings................................................................21
SECTION 7.07 GOVERNING LAW...........................................................21
SECTION 7.08 Assignment to the Trustee...............................................21
SECTION 7.09 Nonpetition Covenants...................................................21
SECTION 7.10 Termination.............................................................21
ANNEX 1 Securitization Charge Adjustment Process and Reports--
ANNEX 2 Securitization Calculation Process
APPENDIX A Master Definitions
SERVICING AGREEMENT, dated as of November 8, 2001, by and between
CONSUMERS FUNDING LLC, a Delaware limited liability company, as issuer (the
"Issuer"), and CONSUMERS ENERGY COMPANY, a Michigan corporation
("Consumers"), as the servicer of the Securitization Property hereunder
(together with each successor to Consumers (in the same capacity) pursuant
to Section 5.03, 5.04 or 6.04, the "Servicer").
W I T N E S S E T H:
WHEREAS Consumers is willing to service the Transferred
Securitization Property purchased from the Seller by the Issuer pursuant to
the Sale Agreement between the Issuer and the Seller; and
WHEREAS the Issuer, in connection with ownership of Transferred
Securitization Property, desires to engage Consumers to carry out the
functions described herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Definitions. Capitalized terms used but not
otherwise defined herein have the meanings assigned to them in Appendix A
hereto.
SECTION 1.02 Other Definitional Provisions.
(a) "Agreement" means this Servicing Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
(b) Non-capitalized terms used herein which are defined in the
Customer Choice Act, as the context requires, have the meanings assigned to
such terms in the Customer Choice Act, but without giving effect to
amendments to the Customer Choice Act after the date hereof.
(c) All terms defined in this Agreement have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(d) The words "hereof", "herein", "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement; Section, Annex,
Schedule and Exhibit references contained in this Agreement are references
to Sections, Annexes, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(e) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms.
ARTICLE II
Appointment and Authorization of Servicer
SECTION 2.01 Appointment of Servicer; Acceptance of Appointment.
Subject to Section 5.06 and Article VI, the Issuer hereby appoints
Consumers and Consumers hereby accepts such appointment, to perform the
Servicer's obligations pursuant to this Agreement on behalf of and for the
benefit of the Issuer in accordance with the terms of this Agreement. This
appointment and Consumers' acceptance thereof may not be revoked except in
accordance with the express terms of this Agreement.
SECTION 2.02 Authorization. With respect to all or any portion of
the Transferred Securitization Property, the Servicer shall be, and hereby
is, authorized and empowered by the Issuer to:
(a) execute and deliver, on behalf of itself, the Issuer, or both,
as the case may be, any and all instruments, documents or notices, and
(b) on behalf of itself, the Issuer, or both, as the case may be,
make any filing and participate in proceedings of any kind with any
governmental authorities, including with the MPSC.
The Issuer shall furnish the Servicer with such documents as have
been prepared by the Servicer for execution by the Issuer, and with such
other documents as may be in the Issuer's possession, as necessary or
appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. Upon the written request of the Servicer,
the Issuer shall furnish the Servicer with any powers of attorney or other
documents necessary or appropriate to enable the Servicer to carry out its
duties hereunder.
SECTION 2.03 Dominion and Control over Transferred Securitization
Property. Notwithstanding any other provision herein, the Servicer and the
Issuer agree that the Issuer shall have dominion and control over the
Transferred Securitization Property, and the Servicer, in accordance with
the terms hereof, is acting solely as the servicing agent of the Issuer
with respect to the Transferred Securitization Property. The Servicer
hereby agrees that it shall not take any action that is not authorized by
this Agreement, that is not consistent with its customary procedures and
practices, or that shall impair the rights of the Issuer with respect to
the Transferred Securitization Property, in each case unless such action is
required by law or court or regulatory order.
ARTICLE III
Billing Services
SECTION 3.01 Duties of Servicer. The Servicer, as agent for the
Issuer (to the extent provided herein), shall have the following duties:
(a) Duties of Servicer Generally. The Servicer will manage,
service, administer and effect collections in respect of the Securitization
Charges. The Servicer's duties will include:
(i) obtaining meter reads, calculating and billing the
Securitization Charges and collecting from Customers all
Securitization Charge Collections;
(ii) responding to inquiries by Customers, Alternative
Electric Suppliers, if any, the MPSC, or any federal, local or
other state governmental authority with respect to the
Securitization Charges;
(iii) delivering bills or arranging for delivery of bills,
accounting for Securitization Charge Collections, investigating
and resolving delinquencies, processing and depositing
collections, making periodic remittances and furnishing periodic
reports, to the Issuer, the Trustee, the Securitization
Bondholders, the Securities and Exchange Commission and the Rating
Agencies, subject, in the case of processing and depositing
collections, making periodic remittances and furnishing periodic
reports, to the provisions of the Intercreditor Agreement;
(iv) settling, as the agent for the Issuer, as its interest
may appear, defaulted or written off accounts in accordance with
the Servicer's usual and customary practices for accounts of its
own electric service customers; and
(v) taking action in connection with Securitization Charge
Adjustments as is set forth herein.
Anything to the contrary notwithstanding, the duties of the
Servicer set forth in this Agreement shall be limited in their entirety by
the provisions of the Customer Choice Act, the Financing Order and any
applicable MPSC Regulations, as in effect at the time such duties are to be
performed. Without limiting the generality of this Section 3.01(a), in
furtherance of the foregoing, the Servicer hereby agrees that it shall also
have, and shall comply with, the duties and responsibilities relating to
Securitization Charge Adjustments, data acquisition, usage and bill
calculation, billing, customer service functions, collections, payment
processing and remittance set forth in Annex 1 hereto.
(b) Notification of Laws and Regulations. The Servicer shall
promptly notify the Issuer, the Trustee and the Rating Agencies in writing
of any laws or MPSC Regulations hereafter promulgated that have a material
adverse effect on the Servicer's ability to perform its duties under this
Agreement.
(c) Other Information. Upon the reasonable request of the Issuer,
the Trustee or any Rating Agency, the Servicer shall provide to the Issuer,
the Trustee or the Rating Agencies, as the case may be, any public
financial information in respect of the Servicer, or any material
information regarding the Transferred Securitization Property to the extent
it is reasonably available to the Servicer, that may be reasonably
necessary and permitted by law for the Issuer, the Trustee or the Rating
Agencies to monitor the performance by the Servicer hereunder. In addition,
so long as any of the Securitization Bonds of any Series are outstanding,
the Servicer shall provide to the Issuer and to the Trustee, within a
reasonable time after written request therefor, any information available
to the Servicer or reasonably obtainable by it that is necessary to
calculate the Securitization Charges.
(d) Alternative Electric Suppliers. The Servicer shall not permit
Alternative Electric Suppliers to bill and collect the Securitization
Charge unless it is required to do so by law.
SECTION 3.02 Collection and Allocation of the Securitization
Charges.
(a) The Servicer shall use all reasonable efforts, consistent with
its customary servicing procedures, to collect all amounts owed in respect
of the Securitization Charges as and when the same shall become due and
shall follow such collection procedures as it follows with respect to
collection activities that Consumers conducts for itself or others. The
Servicer shall not change the amount of or reschedule the due date of any
scheduled payment by customers of the Securitization Charges, except as
contemplated in this Agreement or as required by law or court order or MPSC
Regulations; provided, however, that the Servicer may take any of the
foregoing actions to the extent that such action would be in accordance
with customary billing and collection practices of Consumers with respect
to billing and collection activities that it conducts for itself or others.
(b) The amount of Securitization Charge Collections during any
Billing Month of the Servicer shall be determined in accordance with the
allocation methodology set forth in Annex 2 hereto.
(c) Consumers' other charges may include gas charges which may be
billed together with electric charges and all other charges which Consumers
may be permitted to bill and collect from customers on their utility bills.
If there is more than one Series of Securitization Bonds, the Servicer
shall allocate Securitization Charge Collections among such Series, pro
rata, based on the respective outstanding amounts payable and scheduled to
be paid with respect to such Series.
(d) The Servicer is without authority or responsibility to collect
tax charges authorized by the Financing Order, nor does the Servicer have
any control over any amounts received with respect to such tax charges.
SECTION 3.03 Payment of Securitization Charge Collections.
(a) On each Monthly Remittance Date, for so long as the Servicer
has satisfied the conditions of Section 5.11(b), the Servicer shall remit
to the Trustee the Securitization Charge Collections in accordance with
Section 5.11(b) (each, a "Monthly Remittance"). On each Daily Remittance
Date, for so long as the Servicer has not satisfied the conditions of
Section 5.11(b), the Servicer shall remit to the Trustee the Securitization
Charge Collections in accordance with Section 5.11(a) (each, a "Daily
Remittance").
(b) The Servicer agrees and acknowledges that it holds all
Securitization Charge Collections collected by it for the benefit of the
Issuer and that all amounts will be remitted by the Servicer in accordance
with this Agreement without any surcharge, fee (other than the Servicing
Fee under Section 5.07 hereunder), offset, charge or other deduction and
without making any claim to reduce its obligation to remit all
Securitization Charge Collections collected by it.
SECTION 3.04 Servicing and Maintenance Standards. The Servicer
shall, on behalf of the Issuer:
(a) manage, service, administer and make collections in respect of
the Transferred Securitization Property with reasonable care and in
material compliance with applicable law, including all applicable MPSC
Regulations, using the same degree of care and diligence that the Servicer
exercises with respect to billing and collection activities that the
Servicer conducts for itself and others;
(b) follow standards, policies and procedures in performing its
duties as Servicer that are customary in the electric distribution
industry;
(c) use all reasonable efforts, consistent with its customary
servicing procedures, to enforce and maintain the Issuer's and the
Trustee's rights in respect of the Transferred Securitization Property; and
(d) calculate the Securitization Charges in compliance with the
Customer Choice Act, the Financing Order and any applicable tariffs;
except where the failure to comply with any of the foregoing would not
materially and adversely affect the Issuer's or the Trustee's interest in
the Transferred Securitization Property. The Servicer shall follow such
customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of the Transferred Securitization Property,
which, in the Servicer's judgment, may include the taking of legal action
pursuant to Section 3.10 or otherwise. Notwithstanding the foregoing, the
Servicer shall not change its customary and usual practices and procedures
in any manner that would materially and adversely affect the Issuer's or
the Trustee's interest in the Transferred Securitization Property unless it
shall have provided the Rating Agencies with prior written notice.
SECTION 3.05 Servicer's Certificates. The Servicer will provide to
the Issuer and to the Trustee the statements and data specified in Annex 1.
SECTION 3.06 Annual Statement as to Compliance. The Servicer
shall deliver to the Issuer, the Trustee and each Rating Agency, on or
before March 31 of each year, beginning March 31, 2002 to and including
March 31 succeeding the retiring of the Securitization Bonds, an Officers'
Certificate, stating that:
(a) a review of the activities of the Servicer during the
preceding calendar year (or relevant portion thereof in the case of the
first such Officer's Certificate) and of its performance under this
Agreement has been made under such officers' supervision, and
(b) to the best of such officers' knowledge, based on such review,
the Servicer has fulfilled all its obligations under this Agreement
throughout such period or, if there has been a default in the fulfillment
of any such obligation, describing each such default.
SECTION 3.07 Annual Independent Certified Public Accountants'
Report.
(a) The Servicer shall cause a firm of independent certified
public accountants (which may also provide other services to the Servicer
or Consumers) to prepare, and the Servicer shall deliver to the Issuer, to
the Trustee and to each Rating Agency, on or before March 31 of each year,
beginning March 31, 2002 to and including the March 31 succeeding the
retirement of all Securitization Bonds, a report addressed to the Servicer
(the "Annual Accountant's Report"), which may be included as part of the
Servicer's customary auditing activities, to the effect that such firm has
performed certain procedures in connection with the Servicer's compliance
with its obligations under this Agreement during the preceding calendar
year (or, in the case of the first Annual Accountant's Report, the period
of time from the Initial Transfer Date until December 31, 2002),
identifying the results of such procedures and including any exceptions
noted. In the event such accounting firm requires the Trustee or the Issuer
to agree or consent to the procedures performed by such firm, the Issuer
shall direct the Trustee in writing to so agree; it being understood and
agreed that the Trustee will deliver such letter of agreement or consent in
conclusive reliance upon the direction of the Issuer, and the Trustee will
not make any independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.
(b) The Annual Accountant's Report shall also indicate that the
accounting firm providing such report is independent of the Servicer within
the meaning of the Code of Professional Ethics of the American Institute of
Certified Public Accountants in effect from time to time.
SECTION 3.08 Securitization Property Documentation. To assure
uniform quality in servicing the Transferred Securitization Property and to
reduce administrative costs, the Servicer shall keep on file, in accordance
with its customary procedures, all Securitization Property Documentation.
SECTION 3.09 Computer Records; Audits of Documentation.
(a) Safekeeping. The Servicer shall maintain accurate and complete
accounts, records and computer systems pertaining to the Transferred
Securitization Property and the Securitization Property Documentation in
accordance with its standard accounting procedures and in sufficient detail
to permit calculation of the Securitization Charge Collections to be
remitted from time to time to the Trustee pursuant to Section 3.03 and to
enable the Issuer to comply with this Agreement and the Indenture. The
Servicer shall conduct, or cause to be conducted, periodic audits of the
Securitization Property Documentation held by it under this Agreement and
of the related accounts, records and computer systems, in such a manner as
shall enable the Issuer and the Trustee, as pledgee of the Issuer, to
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Issuer and to the Trustee any failure on the
Servicer's part to hold the Securitization Property Documentation and
maintain its accounts, records and computer systems as herein provided and
promptly take appropriate action to remedy any such failure. Nothing herein
shall be deemed to require an initial review or any periodic review by the
Issuer or the Trustee of the Securitization Property Documentation. The
Servicer's duties to hold the Securitization Property Documentation on
behalf of the Issuer set forth in this Section 3.09(a), to the extent such
Securitization Property Documentation has not been previously transferred
to a successor Servicer, shall terminate three years after the earlier of
the date on which (i) the Servicer is succeeded by a successor Servicer
pursuant to the provisions of this Agreement or (ii) no Securitization
Bonds of any Series are outstanding.
(b) Maintenance of and Access to Records. The Servicer shall
maintain the Securitization Property Documentation at 212 W. Michigan
Avenue, Jackson, Michigan 49201, or at such other office as shall be
specified to the Issuer and to the Trustee by written notice not later than
30 days prior to any change in location. The Servicer shall permit the
Issuer and the Trustee or their respective duly authorized representatives,
attorneys, agents or auditors at any time during normal business hours to
inspect, audit and make copies of and abstracts from the Servicer's records
regarding the Transferred Securitization Property, the Securitization
Charges and the Securitization Property Documentation. The failure of the
Servicer to provide access to such information as a result of an obligation
or applicable law (including MPSC Regulations) prohibiting disclosure of
information regarding Customers shall not constitute a breach of this
Section 3.09(b).
SECTION 3.10 Defending Transferred Securitization Property Against
Claims. The Servicer shall institute and maintain any action or proceeding
necessary to compel performance by the MPSC or the State of Michigan of any
of their obligations or duties under the Customer Choice Act or the
Financing Order with respect to the Transferred Securitization Property,
and the Servicer agrees to take such legal or administrative actions,
including defending against or instituting and pursuing legal actions and
appearing or testifying at hearings or similar proceedings, as may be
reasonably necessary to block or overturn any attempts to cause a repeal
of, modification of or supplement to the Customer Choice Act or the
Financing Order, as the case may be, or the rights of holders of
Transferred Securitization Property that would be adverse to Securitization
Bondholders. In any proceedings related to the exercise of the power of
eminent domain by any municipality to acquire a portion of Consumers'
electric distribution facilities, the Servicer shall assert that the court
ordering such condemnation must treat such municipality as a successor to
Consumers under the Customer Choice Act and the Financing Order. The costs
of any such action reasonably allocated by the Servicer to the Transferred
Securitization Property shall be payable from Securitization Charge
Collections as an Operating Expense in accordance with the Indenture. The
Servicer's obligations pursuant to this Section 3.10 shall survive and
continue notwithstanding the fact that the payment of Operating Expenses
pursuant to the Indenture may be delayed (it being understood that the
Servicer may be required to advance its own funds to satisfy its
obligations under this Section 3.10).
SECTION 3.11 Opinions of Counsel. The Servicer shall deliver to
the Issuer and to the Trustee:
(a) promptly after the execution and delivery of this Agreement
and of the Sale Agreement and of each amendment hereto or thereto, and on
each Transfer Date, an Opinion of Counsel either:
(i) to the effect that, in the opinion of such counsel,
all UCC filings that are necessary to perfect or maintain the
perfection of the security interest of the Trustee in the
Transferred Securitization Property have been executed and filed,
and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or
(ii) to the effect that, in the opinion of such counsel,
no such action is necessary to perfect or maintain the perfection
of such security interest based on law in existence on the date of
such Opinion of Counsel; and
(b) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three full
calendar months after the Initial Transfer Date, an Opinion of Counsel,
dated as of a date during such 90-day period, either:
(i) to the effect that, in the opinion of such counsel,
all UCC filings have been executed and filed that are necessary to
perfect or maintain the perfection of the security interest of the
Trustee in the Transferred Securitization Property, and reciting
the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or
(ii) to the effect that, in the opinion of such counsel,
no such action is necessary to perfect or maintain the perfection
of such security interest based on law in existence on the date of
such Opinion of Counsel.
Each Opinion of Counsel referred to in clause (a) or (b) above shall
specify any action necessary (as of the date of such Opinion of Counsel) to
be taken in the following year to perfect or maintain the perfection of
such security interest based on law in existence on the date of such
Opinion of Counsel.
ARTICLE IV
Services Related to Securitization Charge Adjustments
SECTION 4.01 Securitization Charge Adjustments. The Servicer shall
perform the calculations and take the actions relating to adjusting the
Securitization Charges, as set forth in Annex 1.
ARTICLE V
The Servicer
SECTION 5.01 Representations and Warranties of Servicer. The
Servicer makes the following representations and warranties as of each
Transfer Date, on which the Issuer has relied and will rely in acquiring
Transferred Securitization Property and in entering into this Agreement.
The representations and warranties shall survive the execution and delivery
of this Agreement, the sale of any of the Transferred Securitization
Property to the Issuer and the pledge thereof to the Trustee pursuant to
the Indenture.
(a) Organization and Good Standing. The Servicer is a corporation
duly organized and in good standing under the laws of the state of its
incorporation, with the corporate power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is presently conducted and to execute, deliver and carry out the
terms of this Agreement, and has the power, authority and legal right to
service the Transferred Securitization Property.
(b) Due Qualification. The Servicer has duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions, in which the
ownership or lease of property or the conduct of its business (including
the servicing of the Transferred Securitization Property as required by
this Agreement) requires such qualifications, licenses or approvals (except
where the failure to so qualify would not be reasonably likely to have a
material adverse effect on the Servicer's business, operations, assets,
revenues, properties or prospects or adversely affect the servicing of the
Transferred Securitization Property).
(c) Power and Authority. The Servicer has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
and the execution, delivery and performance of this Agreement have been
duly authorized by the Servicer by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable against the Servicer in
accordance with its terms subject to bankruptcy, receivership, insolvency,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof will
not conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or by-laws of the Servicer, or any
material indenture, material agreement or other material instrument to
which the Servicer is a party or by which it is bound; or result in the
creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument; or violate
any law or any order, rule or regulation applicable to the Servicer or its
properties of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
(f) Approvals. Except for filings with the MPSC for adjusting the
Securitization Charges pursuant to Section 4.01 and Annex 1, filing of
financing statements under the Michigan UCC and the Delaware UCC and UCC
continuation filings, no approval, authorization, consent, order or other
action of, or filing with, any court, federal or state regulatory body,
administrative agency or other governmental instrumentality is required in
connection with the execution and delivery by the Servicer of this
Agreement, the performance by the Servicer of the transactions contemplated
hereby or the fulfillment by the Servicer of the terms hereof, except those
that have been obtained or made.
(g) No Proceedings. There are no proceedings or investigations
pending or, to the Servicer's best knowledge, threatened before any court,
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Servicer or its
properties:
(i) seeking to prevent the issuance of the Securitization
Bonds or the consummation of any of the transactions contemplated
by this Agreement or any of the other Basic Documents;
(ii) except as disclosed in writing by the Servicer to
the Issuer, seeking any determination or ruling that might
materially and adversely affect the performance by the Servicer of
its obligations under, or the validity or enforceability against
the Servicer of, this Agreement or any of the other Basic
Documents; or
(iii) relating to the Servicer and which might materially
and adversely affect the federal or state tax attributes of the
Securitization Bonds.
(h) Reports and Certificates. Each report and certificate
delivered in connection with any filing made to the MPSC by the Servicer on
behalf of the Issuer with respect to the Securitization Charges or
Securitization Charge Adjustments will constitute a representation and
warranty by the Servicer that each such report or certificate, as the case
may be, is true and correct in all material respects; provided, however,
that to the extent any such report or certificate is based in part upon or
contains assumptions, forecasts or other predictions of future events, the
representation and warranty of the Servicer with respect thereto will be
limited to the representation and warranty that such assumptions, forecasts
or other predictions of future events are based upon historical
performance, current conditions and reasonable expectations.
SECTION 5.02 Indemnities of Servicer; Release of Claims.
(a) The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by the Servicer under
this Agreement.
(b) The Servicer shall indemnify the Issuer and the Trustee (for
itself and on behalf of the Securitization Bondholders) and each of their
respective trustees, members, managers, officers, directors, employees and
agents for, and defend and hold harmless each such Person from and against,
any and all Losses that may be imposed upon, incurred by or asserted
against any such Person as a result of:
(i) the Servicer's wilful misconduct, bad faith or gross
negligence in the performance of its duties or observance of its
covenants under this Agreement or the Servicer's reckless
disregard of its obligations and duties under this Agreement;
(ii) the Servicer's breach of any of its representations
or warranties in this Agreement; and
(iii) litigation and related expenses relating to its
status and obligations as Servicer,
provided, however, that the Servicer shall not be liable for any Losses
resulting from the willful misconduct, bad faith or gross negligence of any
Person indemnified pursuant to this Section 5.02(b) (each, an "Indemnified
Person") or resulting from a breach of a representation or warranty made by
such Indemnified Person in any of the Basic Documents that gives rise to
the Servicer's breach.
Promptly after receipt by an Indemnified Person of notice of its
involvement in any action, proceeding or investigation, such Indemnified
Person shall, if a claim for indemnification in respect thereof is to be
made against the Servicer under this Section 5.02(b), notify the Servicer
in writing of such involvement. Failure by an Indemnified Person to so
notify the Servicer shall relieve the Servicer from the obligation to
indemnify and hold harmless such Indemnified Person under this Section 5.02
only to the extent that the Servicer suffers actual prejudice as a result
of such failure. With respect to any action, proceeding or investigation
brought by a third party against an Indemnified Person for which
indemnification may be sought under this Section 5.02, the Servicer shall
be entitled to assume the defense of any such action, proceeding or
investigation. Upon assumption by the Servicer of the defense of any such
action, proceeding or investigation, the Indemnified Person shall have the
right to participate in such action or proceeding and to retain its own
counsel (including local counsel), and the Servicer shall bear the
reasonable fees, costs and expenses of such separate counsel. The
Indemnified Person shall not settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought under
this Section 5.02 (whether or not the Servicer is an actual or potential
party to such claim or action) unless the Servicer agrees in writing to
such settlement, compromise or consent and such settlement, compromise or
consent includes an unconditional release of the Servicer from all
liability arising out of such claim, action, suit or proceeding.
(c) The Servicer shall indemnify the Trustee and its respective
officers, directors and agents for, and defend and hold harmless each such
Person from and against, any and all Losses that may be imposed upon,
incurred by or asserted against any such Person as a result of the
acceptance or performance of the trusts and duties contained herein and in
the Indenture, except to the extent that any such Loss is due to the wilful
misconduct, bad faith or gross negligence of the Trustee; provided,
however, that the foregoing indemnity is extended to the Trustee solely in
its individual capacity and not for the benefit of the Securitization
Bondholders or any other Person. Any such amounts payable under this
Section 5.02(c) with respect to the Trustee shall be deposited in the
General Subaccount and distributed in accordance with the Indenture.
(d) The Servicer's indemnification obligations under Section
5.02(b) and (c) for events occurring prior to the removal or resignation of
the Trustee or the termination of this Agreement shall survive the
resignation or removal of the Trustee or the termination of this Agreement
and shall include reasonable costs, fees and expenses of investigation and
litigation (including the Issuer's and the Trustee's reasonable attorneys'
fees and expenses).
(e) Except to the extent expressly provided for in the Basic
Documents (including the Servicer's claims with respect to the Monthly
Servicing Fees and Consumers' claim for payment of the purchase price of
the Transferred Securitization Property), the Servicer hereby releases and
discharges the Issuer (including its Member, Managers, officers, employees
and agents, if any), and the Trustee (including its respective officers,
directors and agents) (collectively, the "Released Parties") from any and
all actions, claims and demands whatsoever, which the Servicer shall or may
have against any such Person relating to the Transferred Securitization
Property or the Servicer's activities with respect thereto other than any
actions, claims and demands arising out of the willful misconduct, bad
faith or gross negligence of the Released Parties.
(f) The indemnification obligation of the Servicer under this
Section 5.02 shall be pari passu with all other general unsecured
obligations of the Servicer.
SECTION 5.03 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person:
(a) into which the Servicer may be merged or consolidated and
which succeeds to all or the major part of the electric distribution
business of the Servicer,
(b) which results from the division of the Servicer into two or
more Persons and which succeeds to all or the major part of the electric
distribution business of the Servicer,
(c) which may result from any merger or consolidation to which the
Servicer shall be a party and which succeeds to all or the major part of
the electric distribution business of the Servicer,
(d) which may succeed to the properties and assets of the Servicer
substantially as a whole and which succeeds to all or the major part of the
electric distribution business of the Servicer, or
(e) which may otherwise succeed to all or the major part of the
electric distribution business of the Servicer, which Person in any of the
foregoing cases (a) through (e) executes an agreement of assumption to
perform every obligation of the Servicer under this Agreement, shall be the
successor to the Servicer hereunder without the execution or filing of any
document or any further act by any of the parties to this Agreement,
provided that:
(i) immediately after giving effect to such transaction,
no representation or warranty made pursuant to Section 5.01 shall
have been breached and no Servicer Default, and no event that,
after notice or lapse of time, or both, would become a Servicer
Default, shall have occurred and be continuing;
(ii) the successor Servicer shall have delivered to the
Issuer and the Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section 5.03 and
that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with;
(iii) the successor Servicer shall have delivered to the
Issuer and to the Trustee an Opinion of Counsel either:
(A) stating that, in the opinion of such counsel,
all filings to be made by the Servicer,
including UCC filings, that are necessary to
perfect or maintain the perfection of the
security interest of the Trustee in the
Transferred Securitization Property have been
executed and filed and reciting the details of
such filings, or
(B) stating that, in the opinion of such counsel, no
such action is necessary to perfect or maintain
the perfection of such security interest based
on law in existence on the date of such opinion;
(iv) the Rating Agencies shall have received prior
written notice of such transaction (although there is no
requirement of any Rating Agency Confirmation);
(v) the successor Servicer shall have delivered to the
Issuer and the Trustee an opinion of independent tax counsel (as
selected by, and in form and substance reasonably satisfactory to,
the Issuer and the Trustee), which may be based on a ruling from
the Internal Revenue Service, to the effect that, for federal
income tax purposes, such consolidation or merger will not result
in a material adverse federal income tax consequence to the
Issuer, the Trustee or the then existing Securitization
Bondholders; and
(vi) any applicable requirements of the Intercreditor
Agreement have been satisfied.
The Servicer shall not consummate any transaction referred to in subclauses
(a), (b), (c), (d) or (e) above except upon execution of the above
described agreement of assumption and compliance with subclauses (i)
through (vi) above. When any Person acquires the properties and assets of
the Servicer substantially as a whole and becomes the successor to the
Servicer in accordance with the terms of this Section 5.03, then upon the
satisfaction of all of the other conditions of this Section 5.03, the
Servicer shall automatically and without further notice be released from
its obligations hereunder.
SECTION 5.04 Assignment of Servicer's Obligations. The Servicer
may not assign its rights or obligations hereunder to any successor unless
the Rating Agency Condition and any other condition specified in the
Financing Order and the Intercreditor Agreement have been satisfied.
SECTION 5.05 Limitation on Liability of Servicer. The Servicer
shall not be liable to the Issuer or the Trustee, except as provided under
this Agreement, for any action taken or for refraining from the taking of
any action pursuant to this Agreement or for errors in judgment; provided,
however, that this provision shall not protect the Servicer against any
liability that would otherwise be imposed by reason of willful misconduct,
bad faith or gross negligence in the performance of its duties or by reason
of reckless disregard of obligations and duties under this Agreement. The
Servicer and any director, officer, employee or agent of the Servicer may
rely in good faith on the advice of counsel reasonably acceptable to the
Trustee or on any document of any kind, prima facie properly executed and
submitted by any Person, respecting any matters arising under this
Agreement.
Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its duties to service the Transferred
Securitization Property in accordance with this Agreement or related to its
obligation to pay indemnification, and that in its reasonable opinion may
cause it to incur any expense or liability.
SECTION 5.06 Consumers Not To Resign as Servicer. Subject to the
provisions of Sections 5.03 and 5.04, Consumers shall not resign from the
obligations and duties imposed on it as Servicer under this Agreement
except upon a determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law. Notice of
any such determination permitting the resignation of Consumers shall be
communicated to the Issuer, the Trustee and each Rating Agency at the
earliest practicable time (and, if such communication is not in writing,
shall be confirmed in writing at the earliest practicable time), and any
such determination shall be evidenced by an Opinion of Counsel to such
effect delivered to the Issuer and the Trustee concurrently with or
promptly after such notice. No such resignation shall become effective
until a successor Servicer has assumed the servicing obligations and duties
hereunder of the Servicer in accordance with Section 6.04.
SECTION 5.07 Monthly Servicing Fee. The Issuer agrees to pay the
Servicer the Monthly Servicing Fee with respect to all Series of
Securitization Bonds. For so long as Consumers is the Servicer, the Monthly
Servicing Fee shall be one-twelfth times 0.25% times the total Outstanding
Amount as of the date of payment of such Monthly Servicing Fee. The
foregoing Monthly Servicing Fee constitutes a fair and reasonable price for
the obligations to be performed by the Servicer.
SECTION 5.08 Servicer Expenses. Except as otherwise expressly
provided herein, the Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder, including fees
and disbursements of independent accountants and counsel, taxes imposed on
the Servicer and expenses incurred in connection with reports to
Securitization Bondholders.
SECTION 5.09 Subservicing. The Servicer may at any time appoint a
subservicer to perform all or any portion of its obligations as Servicer
hereunder; provided, however, that the Rating Agency Condition shall have
been satisfied in connection therewith; and provided further that the
Servicer shall remain obligated and be liable to the Issuer, the Trustee
and the Securitization Bondholders for the servicing and administering of
the Transferred Securitization Property in accordance with the provisions
hereof without diminution of such obligation and liability by virtue of the
appointment of such subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and
administering the Transferred Securitization Property. The fees and
expenses of the subservicer shall be as agreed between the Servicer and its
subservicer from time to time, and none of the Issuer, the Trustee or the
Securitization Bondholders shall have any responsibility therefor. Any such
appointment shall not constitute a Servicer resignation under Section 5.06.
SECTION 5.10 No Servicer Advances. The Servicer shall not make any
advances of interest on or principal of the Securitization Bonds.
SECTION 5.11 Remittances.
(a) The Servicer shall remit Securitization Charge Collections
(from whatever source) not later than each Daily Remittance Date, and all
proceeds of other Collateral of the Issuer, if any, received by the
Servicer during the second preceding Business Day, to the Trustee for
deposit pursuant to the Indenture. The Servicer shall promptly remit any
Indemnity Amounts paid or received by it immediately to the Trustee for
deposit pursuant to the Indenture.
(b) Notwithstanding the foregoing clause (a), as long as:
(i) Consumers or any successor to Consumers' electric
distribution business remains the Servicer, and
(ii) no Servicer Default has occurred and is continuing,
and
(A) Consumers or such successor obtains and
maintains a short-term rating of "A-1"or better
by Standard & Poor's, "P-1" or better by Moody's
and "F-1" or better by Fitch (and for five
Business Days following a reduction in any such
rating), or
(B) the Rating Agency Condition has been otherwise
satisfied (and any conditions or limitations
imposed by the Rating Agencies in connection
therewith are complied with),
the Servicer need not make the Daily Remittances, but in lieu
thereof, may remit all Securitization Charge Collections (from
whatever source), and all proceeds of other Collateral of the
Issuer, if any, received by the Servicer during the preceding
Billing Month, (or, in the case of the first Monthly Remittance
following a Daily Remittance, since the second Business Day
preceding such Daily Remittance) to the Trustee for deposit
pursuant to the Indenture, not later than the corresponding
Monthly Remittance Date.
(c) If the Servicer has been making Monthly Remittances but fails
to continue to satisfy the requirements of clause (b) above, the Servicer
shall begin making Daily Remittances pursuant to clause (a) above
immediately following such failure; provided, that, on the first Daily
Remittance Date following such Monthly Remittances, the Servicer shall
remit all Securitization Charge Collections (from whatever source), and all
proceeds of other Collateral of the Issuer, if any, received by the
Servicer since the last day of the preceding Billing Month, to the Trustee
for deposit pursuant to the Indenture.
SECTION 5.12 Protection of Title. The Servicer shall execute and
file such filings and cause to be executed and filed such filings, all in
such manner and in such places as may be required by law fully to preserve,
maintain and protect the interests of the Trustee in the Transferred
Securitization Property, including all filings required under the UCC
relating to the transfer of ownership of or a security interest in the
Transferred Securitization Property by the Seller to the Issuer or the
security interest granted by the Issuer to the Trustee in the Transferred
Securitization Property. The Servicer shall deliver (or cause to be
delivered) to the Issuer and the Trustee file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing.
ARTICLE VI
Servicer Default
SECTION 6.01 Servicer Default. If any one of the following events
(a "Servicer Default") occurs and is continuing:
(a) any failure by the Servicer to remit to the Trustee, on behalf
of the Issuer, any required remittance that continues unremedied for a
period of five Business Days after written notice of such failure is
received by the Servicer from the Issuer or the Trustee; or
(b) any failure by the Servicer duly to observe or perform in any
material respect any other covenant or agreement of the Servicer set forth
in this Agreement, which failure:
(i) materially and adversely affects the Transferred
Securitization Property or the rights of the Securitization
Bondholders, and
(ii) continues unremedied for a period of 60 days after
written notice of such failure has been given to the Servicer by
the Issuer or by the Trustee or after discovery of such failure by
an officer of the Servicer; or
(c) any representation or warranty made by the Servicer in this
Agreement proves to have been incorrect when made, which has a material
adverse effect on the Issuer or the Securitization Bondholders and which
material adverse effect continues unremedied for a period of 60 days after
the date on which written notice thereof has been given to the Servicer by
the Issuer or the Trustee or after discovery of such failure by an officer
of the Servicer, as the case may be; or
(d) an Insolvency Event occurs with respect to the Servicer;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, the Trustee, with the consent of the Holders of a
majority of the outstanding principal amount of the Securitization Bonds of
all Series, but subject to the provisions of the Intercreditor Agreement,
by notice then given in writing to the Servicer (a "Termination Notice")
may terminate all the rights and obligations (other than the
indemnification obligations set forth in Section 5.02 hereof and the
obligation under Section 6.04 to continue performing its functions as
Servicer until a successor Servicer is appointed) of the Servicer under
this Agreement. In addition, upon a Servicer Default specified in Section
6.01(a) above, the Issuer and the Trustee shall be entitled to apply to the
MPSC or any court of competent jurisdiction for sequestration and payment
to the Trustee of revenues arising with respect to the Transferred
Securitization Property.
On or after the receipt by the Servicer of a Termination Notice,
all authority and power of the Servicer under this Agreement, whether with
respect to the Transferred Securitization Property, the related
Securitization Charges or otherwise, shall, upon appointment of a successor
Servicer pursuant to Section 6.04, without further action, pass to and be
vested in such successor Servicer and, without limitation, the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such Termination
Notice, whether to complete the transfer of the Securitization Property
Documentation and related documents, or otherwise. The predecessor Servicer
shall cooperate with the successor Servicer, the Trustee and the Issuer in
effecting the termination of the responsibilities and rights of the
predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall
at the time be held by the predecessor Servicer for remittance, or shall
thereafter be received by it with respect to the Transferred Securitization
Property or the related Securitization Charges. As soon as practicable
after receipt by the Servicer of such Termination Notice, the Servicer
shall deliver the Securitization Property Documentation to the successor
Servicer. All reasonable costs and expenses (including attorneys fees and
expenses) incurred in connection with transferring the Securitization
Property Documentation to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section
6.01 shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. Termination of
Consumers as Servicer shall not terminate Consumers' rights or obligations
under the Sale Agreement.
SECTION 6.02 Notice of Servicer Default. The Servicer shall
deliver to the Issuer, the Trustee and each Rating Agency promptly after
having obtained knowledge thereof, but in no event later than five Business
Days thereafter, written notice in an Officer's Certificate of any event or
circumstance which, with the giving of notice or the passage of time, would
become a Servicer Default under Section 6.01. Such notice shall also be
given by publication in an Authorized Newspaper, so long as any
Securitization Bonds are listed on the Luxembourg Stock Exchange and the
rules of that exchange so require.
SECTION 6.03 Waiver of Past Defaults. The Trustee, with the
consent of Holders of the majority of the outstanding principal amount of
the Securitization Bonds of all Series, may waive in writing any default by
the Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required remittances to the
Trustee of Securitization Charge Collections in accordance with Section
3.03. Upon any such waiver of a past default, such default shall cease to
exist, and any Servicer Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereto.
SECTION 6.04 Appointment of Successor.
(a) Upon the Servicer's receipt of a Termination Notice pursuant
to Section 6.01 or the Servicer's resignation in accordance with the terms
of this Agreement, the predecessor Servicer shall continue to perform its
functions as Servicer under this Agreement and shall be entitled to receive
the requisite portion of the Monthly Servicing Fees, until a successor
Servicer has assumed in writing the obligations of the Servicer hereunder
as described below. In the event of the Servicer's removal or resignation
hereunder, the Trustee, as assignee of the Issuer, shall appoint a
successor Servicer, with the consent of the Holders of a majority of the
outstanding principal amount of the Securitization Bonds of all Series, but
subject to the provisions of the Intercreditor Agreement, and the successor
Servicer shall accept its appointment by a written assumption in form
acceptable to the Issuer and the Trustee. If, within 30 days after the
delivery of the Termination Notice, a new Servicer has not been appointed
and accepted such appointment, the Trustee may petition the MPSC or a court
of competent jurisdiction to appoint a successor Servicer under this
Agreement. A Person shall qualify as a successor Servicer only if:
(i) such Person is not prevented from performing the
duties of the Servicer pursuant to the Customer Choice Act, the
MPSC Regulations, the Financing Order and this Agreement;
(ii) the Rating Agency Condition has been satisfied; and
(iii) such Person enters into a servicing agreement with
the Issuer having substantially the same provisions as this
Agreement.
(b) Upon appointment, the successor Servicer shall be the
successor in all respects to the predecessor Servicer under this Agreement
and shall be subject to all the responsibilities, duties and liabilities
arising thereafter relating thereto placed on the predecessor Servicer and
shall be entitled to the Monthly Servicing Fee and all the rights granted
to the predecessor Servicer by the terms and provisions of the Agreement.
(c) The successor Servicer may resign only if it is prohibited
from serving as such by applicable law.
SECTION 6.05 Cooperation with Successor. The Servicer covenants
and agrees with the Issuer that it will, on an ongoing basis, cooperate
with the successor Servicer and provide whatever information is, and take
whatever actions are, reasonably necessary to assist the successor Servicer
in performing its obligations hereunder, including, without limitation,
furnishing to the successor Servicer all information necessary to calculate
the Securitization Charge Collections.
ARTICLE VII
Miscellaneous Provisions
SECTION 7.01 Amendment. This Agreement may be amended by the
Servicer and the Issuer, with the consent of the Trustee and the
satisfaction of the Rating Agency Condition. Promptly after the execution
of any such amendment or consent, the Issuer shall furnish written
notification of the substance of such amendment or consent to each of the
Rating Agencies.
Prior to the execution of any amendment to this Agreement, each of
the Issuer and the Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel
referred to in Section 3.11. Each of the Issuer and the Trustee may, but
shall not be obligated to, enter into any such amendment which adversely
affects its own rights, duties or immunities under this Agreement or
otherwise.
SECTION 7.02 Notices. Unless otherwise specifically provided
herein, all notices, directions, consents and waivers required under the
terms and provisions of this Agreement shall be in English and in writing,
and any such notice, direction, consent or waiver may be given by United
States first-class mail, reputable overnight courier service, facsimile
transmission or electronic mail (confirmed by telephone, United States
first-class mail or reputable overnight courier service in the case of
notice by facsimile transmission or electronic mail) or any other customary
means of communication, and any such notice, direction, consent or waiver
shall be effective when delivered or transmitted, or if mailed, five days
after deposit in the United States first-class mail with proper postage for
first-class mail prepaid,
(a) in the case of the Servicer, at Consumers Energy Company, 212
W. Michigan Avenue, Jackson, Michigan 49201;
(b) in the case of the Issuer, at Consumers Funding LLC, 212 W.
Michigan Avenue, Suite M-1029, Jackson, Michigan 49201;
(c) in the case of the Trustee, at the address provided for
notices or communications to the Trustee in the Indenture;
(d) in the case of Moody's, at Moody's Investors Service, Inc.,
ABS Monitoring Department, 99 Church Street, New York, New York 10007;
(e) in the case of Standard & Poor's, at Standard & Poor's Ratings
Group, 55 Water Street, New York, New York 10041, Attention: Asset Backed
Surveillance Department; and
(f) in the case of Fitch, at Fitch, Inc., 1 State Street Plaza,
New York, New York 10004, Attention: ABS Surveillance;
or, as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 7.03 Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Servicer, the Issuer and
the Trustee, on behalf of itself and the Securitization Bondholders, and
nothing in this Agreement, whether express or implied, shall be construed
to give to any other Person any legal or equitable right, remedy or claim
in any Collateral or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 7.04 Severability. Any provision of this Agreement that is
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.
SECTION 7.05 Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 7.06 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 7.07 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 7.08 Assignment to the Trustee. (a) The Servicer hereby
acknowledges and consents to any pledge, assignment and grant of a security
interest by the Issuer to the Trustee pursuant to the Indenture for the
benefit of the Securitization Bondholders of all right, title and interest
of the Issuer in, to and under the Transferred Securitization Property
owned by the Issuer and the proceeds thereof and the assignment of any or
all of the Issuer's rights hereunder to the Trustee.
(b) In no event shall the Trustee have any liability for the
representations, warranties, covenants, agreements or other obligations of
the Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely
to the assets of the Issuer.
SECTION 7.09 Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement or the Indenture, the Servicer hereby
covenants and agrees that it shall not, prior to the date which is one year
and one day after the termination of the Indenture and the payment in full
of the Securitization Bonds, any other amounts owed under the Indenture,
including, without limitation, any amounts owed to third-party credit
enhancers, and any amounts owed by the Issuer under any Interest Rate Swap
Agreement, acquiesce in, petition or otherwise invoke or cause the Issuer
to invoke the process of any court or government authority for the purpose
of commencing or sustaining a case against the Issuer under any Federal or
State bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar
official of the Issuer or any substantial part of the property of the
Issuer, or ordering the winding up or liquidation of the affairs of the
Issuer.
SECTION 7.10 Termination. This Agreement shall terminate when all
Securitization Bonds have been retired, redeemed or defeased in full.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective duly authorized
officers as of the date and year first above written.
CONSUMERS FUNDING LLC,
as Issuer
By: /s/ Thomas A. McNish
----------------------------
Name: Thomas A. McNish
Title: Manager
CONSUMERS ENERGY COMPANY,
as Servicer
By: /s/ Laura L. Mountcastle
-----------------------------
Name: Laura L. Mountcastle
Title: Vice President and
Treasurer
Acknowledged and Accepted:
THE BANK OF NEW YORK,
as Trustee
By: /s/ Cassandra D. Shedd
------------------------------
Name: Cassandra D. Shedd
Title: Assistant Vice President
ANNEX 1
to
SERVICING AGREEMENT
The Servicer agrees to comply with the following with respect to
Consumers Funding LLC (the "Issuer"):
SECTION 1. Definitions. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in Appendix A to the
Servicing Agreement dated as of November 8, 2001, between the Issuer and
Consumers, as Servicer.
SECTION 2. Trustee and Servicer Payment Date Statements. At least
one Business Day before each date on which distributions to the Trustee and
the Servicer are to be made pursuant to Sections 8.02(d) and (e) of the
Indenture, the Servicer shall provide the Trustee with a statement setting
forth the amounts to be distributed to each of the Trustee and Servicer
pursuant to such sections.
SECTION 3. Payment Date Statements. At least one Business Day
before each Payment Date, the Servicer shall provide to the Issuer, the
Trustee, each Rating Agency and for so long as any Securitization Bonds are
listed on the Luxembourg Stock Exchange, any listing agent in Luxembourg
and notice that such report is available shall be published in an
Authorized Newspaper, a statement indicating:
1. the amount to be paid to Securitization Bondholders of each
Series and Class in respect of principal on such Payment
Date;
2. the amount to be paid to Securitization Bondholders of each
Series and Class in respect of interest on such Payment
Date;
3. the Projected Securitization Bond Balance and the
Securitization Bond Balance for each Series and Class as of
that Payment Date (after giving effect to the payments on
such Payment Date);
4. the amount on deposit in the Overcollateralization
Subaccount for each Series and the Scheduled
Overcollateralization Level for each Series, as of that
Payment Date (after giving effect to the transfers to be
made from or into the Overcollateralization Subaccount on
such Payment Date);
5. the amount on deposit in the Capital Subaccount for each
Series as of that Payment Date (after giving effect to the
transfers to be made from or into the Capital Subaccount on
such Payment Date);
6. the amount, if any, on deposit in the Reserve Subaccount as
of that Payment Date (after giving effect to the transfers
to be made from or into the Reserve Subaccount on such
Payment Date);
7. the amount, if any, to be paid to any Swap Counterparty (on
a gross and a net basis, separately stated) under any
Interest Rate Swap Agreement on or before such Payment Date;
and
8. the amount of any transfers and payments to be made on such
Payment Date pursuant to Sections 8.02(d), (e), (f), (g),
and (i) of the Indenture.
SECTION 4. Remittance Date Statements. At least one Business Day
before each Remittance Date, but not more frequently than monthly, the
Servicer shall prepare and furnish to the Issuer and the Trustee a
statement setting forth the amount to be remitted by the Servicer to the
Trustee for deposit on such Remittance Date pursuant to the Indenture.
SECTION 5. Securitization Charge Adjustments.
(a) Prior to each Calculation Date, the Servicer shall calculate
(i) the Securitization Bond Balance as of the Payment
Date immediately preceding the next Adjustment Date (a written
copy of which shall be delivered by the Servicer to the Trustee
within five days following such Calculation Date), and
(ii) the revised Securitization Charges with respect to
the Transferred Securitization Property in respect of each
Adjustment Date such that the Servicer projects that
Securitization Charge Collections therefrom allocable to the
Issuer will be sufficient so that:
(A) the Securitization Bond Balance on the Payment
Date immediately preceding the next Adjustment
Date will equal the Projected Securitization
Bond Balance as of such date, taking into
account any amounts on deposit in the Reserve
Subaccount,
(B) the amount on deposit in the
Overcollateralization Subaccount on the Payment
Date immediately preceding the next Adjustment
Date will equal the Scheduled
Overcollateralization Level for such date,
taking into account amounts on deposit in the
Reserve Subaccount,
(C) the amount on deposit in the Capital Subaccount
on the Payment Date immediately preceding the
next Adjustment Date will equal its required
level for such date, taking into account any
amounts on deposit in the Reserve Subaccount,
(D) the amount on deposit in the Reserve Subaccount
on the Payment Date immediately preceding the
next Adjustment Date will equal zero, and
(E) the Securitization Charge Collections will
provide for (i) amortization of the remaining
outstanding principal amount of each Series in
accordance with the Expected Amortization
Schedule therefor, (ii) payment of interest on
each Series when due, payment of any amounts
under any Interest Rate Swap Agreement, (iii)
payment of all Operating Expenses of the Issuer
when due in accordance with the Indenture, and
(iv) deposits to the Overcollateralization
Subaccount such that the balance therein will
equal the Scheduled Overcollateralization Level
on the Payment Date immediately preceding the
next Adjustment Date.
(b) On or before each Calculation Date, the Servicer shall file an
Adjustment Request with the MPSC. This filing shall include the data
specified in the Financing Order.
(c) On each Adjustment Date, the Servicer shall
(i) take all reasonable actions and make all reasonable
efforts to effectuate all adjustments to the Securitization
Charges, and
(ii) promptly send to the Trustee copies of all material
notices and documents relating to such adjustments.
(d) On each Adjustment Date, the Servicer shall provide Moody's
with a schedule indicating any changes to the Securitization Charges.
(e) If deemed appropriate by the Servicer to protect
Securitization Bondholders and to remedy a significant and recurring
variance between actual and expected Securitization Charge Collections, the
Servicer shall make "non-routine" filings with the MPSC as authorized by
the Financing Order, for adjustments to the Securitization Charge to assure
timely payment of the periodic payment requirements of the Issuer set forth
in the Indenture. Such filings shall be made at least 90 days prior to the
proposed effective date of the proposed adjustments.
ANNEX 2 to the Servicing Agreement
Dated as of November 8, 2001
Consumers Energy Company
Securitization Calculation Process
The following three processes will be used by Consumers Energy Company, as
Servicer, under the Servicing Agreement for calculating the daily amounts
of Securitization Charges to be remitted to the Trustee for deposit in the
Collection Account not later than the Remittance Date:
Standard Process
Initial Start-Up Process
Process for Securitization Charge Rate Changes Resulting from a
True-Up Adjustment
Terms are used herein as defined in Appendix A - Master Definitions to the
Servicing Agreement. The customer billing and collections referred to in
this Annex 2 are billings to and collections from Consumers' electric and
combined electric and gas customers (but not gas only customers).
Standard Process
1. Each business day that customer billing and collections are
processed, a file is created from the billing systems containing
the billing data (rate class, total charges billed, Securitization
Charges billed and KWh delivered) and a file is created with
collection data (collection amount by rate class).
2. Billing Data: For an entire Billing Month the total Securitization
Charges billed by the Servicer for each rate class are divided by
the total charges billed by Consumers and the Servicer for each
rate class to customers for such Billing Month, creating the
Securitization Ratio. This information will be used for the
subsequent Billing Month's calculation process. (Monthly Ratio
Analysis)
3. Collection Data: Each business day after collections are received
the total dollar amount collected by rate class is multiplied by
the prior Billing Month's Securitization Ratio for each rate
class. This amount is the total Securitization Charges collected,
which will be remitted to the Trustee on a daily basis. (Daily
Servicer's Report)
4. Monthly Summary: At the end of each Billing Month the total of the
daily collections for that period are summarized and reported to
the Trustee. (Monthly Servicer's Report)
Initial Start-Up
The standard process will be modified during the first three Billing Months
following the Transfer Date of the Initial Transferred Securitization
Property under the Sale Agreement. The first such Billing Month requires
the calculation of the amount of Securitization Charges for the prior
Billing Month and collections for all three of those Billing Months must
take into account payment history by adjustment based on the Collection
Curve for the applicable Billing Month.
First Billing Month
1. Billing Data: The amount of Securitization Charges that would have
been billed during the Billing Month prior to actual
securitization billing is calculated. The total Securitization
Charges that would have been billed for each rate class are
divided by the total charges billed by Consumers and the Servicer
for each rate class to provide the Securitization Ratio. This will
be done to the input files from the billing systems and then
processed as described above. (Monthly Ratio Analysis)
2. Collection Data: For the first of the three Billing Months, the
daily amounts of Securitization Charges collected are adjusted to
reflect the time lag between the customer receiving the bill and
the Servicer receiving payment. To accomplish this, the amounts
collected from the billing systems will be multiplied by the First
Billing Month's Collection Curve Percentage. Standard processing
is then performed. (Daily Servicer's Report)
3. Monthly Summary: At the end of each Billing Month the total
Securitization Charges collected are summarized and reported to
the Trustee. (Monthly Servicer's Report)
Months Two and Three
1 Billing Data: For the preceding Billing Month the total
Securitization Charges for each rate class are divided by the
total charges billed by Consumers and the Servicer for each rate
class. This billing rate information is then used for the current
Billing Month's calculation process. (Monthly Ratio Analysis)
2. Collection Data: For the second and third Billing Months, the
daily amounts of Securitization Charges collected are adjusted to
reflect the time lag between the customer receiving the bill and
the Servicer receiving payment. To accomplish this, the amounts
collected from the billing systems during the Second Billing Month
are multiplied by the cumulative First and Second Billing Months'
Collection Curve Percentage, and the amounts collected from the
billing systems during the Third Billing Month are multiplied by
the cumulative First, Second and Third Billing Months' Collection
Curve Percentage. Standard processing is then performed. (Daily
Servicer's Report)
In the fourth Billing Month and thereafter, standard processing is
performed based upon 100% of the amounts billed and collected.
3. Monthly Summary: At the end of each Billing Month the total
Securitization Charges collected are summarized and reported to
the Trustee. (Monthly Servicer's Report)
Securitization Charge Rate Changes Resulting from a True-Up Adjustment
The first two Billing Months after a Securitization Charge Rate change
resulting from an annual or quarterly true-up, special processing is
required to (a) reflect the fact that during the Billing Month prior to the
change the Securitization Charge was billed under the prior Securitization
Charge Rate and (b) amounts collected for the first two Billing Months
after the Securitization Charge Rate change will reflect payments for both
old and new billing amounts resulting from the prior and new Securitization
Charge Rates.
First Securitization Charge Rate-Change Billing Month
To calculate the appropriate Securitization Ratio for the first Billing
Month after the Securitization Charge Rate change:
Collections Applicable to Prior Securitization Charge Rate
1. Collection Data: For the first Billing Month, the daily
amounts of Securitization Charges collected must be adjusted
to reflect the collections of the Securitization Charges
billed under the prior Securitization Charge Rate. To
accomplish this, the collection amounts from the billing
systems are multiplied by 1 minus the first Billing Month's
Collection Curve Percentage. Standard processing is then
performed on these amounts using the prior Billing Month's
Securitization Ratio. (Daily Servicer's Report)
Collections Applicable to New Securitization Charge Rate
2. Billing Data: For the first Billing Month, the amount of
Securitization Charges billed is recalculated by multiplying
the KWh delivered for each rate class by the new
Securitization Charge Rate. The total calculated
Securitization Charges billed for each rate class are
divided by the total charges billed by Consumers and the
Servicer for each rate class. This information is then used
for the First Billing Month's second calculation process
(point 3 below). (Monthly Ratio Analysis)
3. Collection Data: For the first Billing Month, the daily
amounts of Securitization Charges collected must be adjusted
to reflect the collections billed under the new
Securitization Charge Rate. To accomplish this, the
collection amounts from the billing systems are multiplied
by the First Billing Month's Collection Curve Percentage.
Standard processing is then performed using the recalculated
prior month's Securitization Ratio. (Daily Servicer's
Report)
4. Summarized Collection Data: For the first Billing Month, the
Daily Servicer's Reports (points 1 and 3 above) are
summarized into one set of reports. This summarized amount
is the total Securitization Charges collected, which will be
remitted to the Trustee on a daily basis. (Daily Servicer's
Report)
Second Securitization Charge Rate Change Month
To calculate the appropriate Securitization Ratio for the second Billing
Month after the Securitization Charge Rate change:
Collection Applicable to Prior Securitization Charge Rate
1. Billing Data: For the second Billing Month, the amount of
Securitization Charges collected is recalculated by
multiplying the KWh billed by the prior Securitization
Charge Rate. The total calculated Securitization Charges
billed are divided by the total charges billed by Consumers
and the Servicer for each rate class. This information is
then used for the second Billing Month's second calculation
process (point 2). (Monthly Ratio Analysis)
2. Collection Data: For the second Billing Month, the daily
amounts of Securitization Charges collected must be adjusted
to reflect the collections billed under the prior
Securitization Charge Rate applicable to each rate class. To
accomplish this, the collection amounts from the billing
systems are multiplied by 1 minus the cumulative First and
Second Billing Months' Collection Curve Percentage. Standard
processing on these amounts is then performed using the
recalculated prior month's Securitization Ratio. (Daily
Servicer's Report)
Collection Applicable to New Securitization Charge Rate
3. Collection Data: For the second Billing Month, the daily
amounts of Securitization Charges collected must be adjusted
to reflect the collections billed under the new
Securitization Charge Rate. To accomplish this, the
collection amounts from the billing systems are multiplied
by the cumulative First and Second Billing Months'
Collection Curve Percentage. Standard processing is then
performed using the prior month's Securitization Ratio.
(Daily Servicer's Report)
4. Summarized Collection Data: For the second Billing Month,
the Daily Servicer's Reports (points 2 and 3 above) are
summarized into one set of reports. This summarized amount
is the total Securitization Charges collected, which will be
remitted to the Trustee on a daily basis. (Daily Servicer's
Report)
APPENDIX A
MASTER DEFINITIONS
The definitions contained in this Appendix A are applicable to the singular
as well as the plural forms of such terms.
Act has the meaning specified in Section 11.03(a) of the
Indenture.
Adjustment Date means (a) the first day of the first billing cycle
of the Servicer in December of each year through December 2013 and
(b) thereafter, as long as the Securitization Bonds are
outstanding, the first day of the first billing cycle of the
Servicer in March, June, September and December of each year,
beginning with the billing cycle for December 2014.
Adjustment Request means an application filed by the Servicer with
the MPSC for a Securitization Charge Adjustment pursuant to
Section 5 of the Issuer Annex.
Administration Agreement means the Administration Agreement dated
as of November 8, 2001, between Consumers, as administrator, and
the Issuer, as the same may be amended or supplemented from time
to time.
Administrator means Consumers, as administrator under the
Administration Agreement, and each successor to Consumers, in the
same capacity, pursuant to Section 14 of the Administration
Agreement.
Affiliate means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with
such specified Person. For the purposes of this definition,
control when used with respect to any specified Person means the
power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms controlling
and controlled have meanings correlative to the foregoing.
Alternative Electric Suppliers means any third party, including
any electric generation supplier, providing billing or metering
services, licensed by the MPSC pursuant to relevant provisions of
the Customer Choice Act, the MPSC Regulations and the Financing
Order.
Annual Accountant's Report has the meaning assigned to that term
in Section 3.07 of the Servicing Agreement.
Authorized Denominations means, with respect to any Series or
Class of Securitization Bonds, $1,000 and integral multiples of
$1.00 above that amount, provided, however, that one bond of each
Class may have denomination of less than $1,000, or such other
denominations as may be specified in the Series Supplement
therefor.
Authorized Newspaper means the Luxemburger Wort or any other
newspaper published in Luxembourg on a daily basis.
Authorized Officer means, with respect to the Issuer, a any
Manager and, bany person designated as an "Officer" under the
Issuer LLC Agreement and authorized thereby to act on behalf of
the Issuer.
Basic Documents means the Formation Documents, the Sale Agreement,
the Intercreditor Agreement, any Bills of Sale, the Servicing
Agreement, the Administration Agreement, the Indenture, the
Underwriting Agreement, the Securities Account Control Agreement
and any Interest Rate Swap Agreement, as each may be amended or
supplemented from time to time.
Bill of Sale means any bill of sale issued by the Seller to the
Issuer pursuant to the Sale Agreement evidencing the sale of
Securitization Property by the Seller to the Issuer.
Billing Month means the schedule for current month billings (each
billing month includes 21 billing segments regardless of the
number of days in the current calendar month). For uniformity of
customer billings, each customer's meter is read every 27 to 33
days and billed in one of the 21 monthly billing segments.
Book-Entry Securitization Bonds means beneficial interests in the
Securitization Bonds, ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in
Section 2.11 of the Indenture.
Business Day means any day other than a Saturday or Sunday or a
day on which banking institutions in the City of Jackson,
Michigan, or in the City of New York, New York or, with respect to
any Securitization Bonds listed on the Luxembourg Stock Exchange,
in Luxembourg, are required or authorized by law or executive
order to remain closed.
Calculation Date means the day which is a Business Day at least 45
days before each Adjustment Date on which the Servicer files an
Adjustment Request.
Capital Reserve Subaccount has the meaning specified in Section
8.02(a) of the Indenture.
Capital Subaccount has the meaning specified in Section 8.02(a) of
the Indenture.
Class means, with respect to any Series, any one of the classes of
Securitization Bonds of that Series, as specified in the Series
Supplement for that Series.
Class Subaccount has the meaning specified in Section 8.02(a) of
the Indenture.
Clearing Agency means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
Clearing Agency Participant means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
Code means the Internal Revenue Code of 1986, as amended from time
to time, and the treasury regulations promulgated thereunder.
Collateral has the meaning specified in the Granting Clause of the
Indenture.
Collection Account has the meaning specified in Section 8.02(a) of
the Indenture.
Collection Curve means, with respect to a Billing Month, the
forecast prepared by the Servicer of the percentages of amounts
billed in a Billing Month that are expected to be received during
each of the Billing Months for which the Collection Curve
Percentage will be applied to determine the amount of
Securitization Charges collected.
Collection Curve Percentage means the percentages of amounts
billed in a particular Billing Month that are expected to be
received during that month. The initial Collection Curve
Percentages are:
First Billing Month's Collection Curve Percentage: 40.08%
Second Billing Month's Collection Curve Percentage: 45.09%
Third Billing Month's Collection Curve Percentage: 10.58%
provided that the Collection Curve Percentages will be updated by
Consumers periodically while the Securitization Bonds are
outstanding using similar methodology.
Commission means the U.S. Securities and Exchange Commission, and
any successor thereof.
Consumers means Consumers Energy Company, a Michigan corporation.
Corporate Trust Office means the principal office of the Trustee
at which at any particular time its corporate trust business shall
be administered, which office at date of the execution of this
Indenture is located at 5 Penn Plaza-16th floor, New York, New
York 10001-1803, Attention: Corporate Trust-Asset Backed
Securities (ABS), or at such other address as the Trustee may
designate from time to time by notice to the Securitization
Bondholders and the Issuer, or the principal corporate trust
office of any successor Trustee (the address of which the
successor Trustee will notify the Securitization Bondholders and
the Issuer in writing).
Covenant Defeasance Option has the meaning specified in Section
4.01(b) of the Indenture.
Customers means all electric customers taking delivery of
electricity from Consumers or its successor on its MPSC-approved
rate schedules and special contracts.
Customer Choice Act means the Customer Choice and Electricity
Reliability Act as set forth in Michigan Public Acts 2000 PA 141
and 2000 PA 142 and effective on June 5, 2000.
Daily Remittance Date means, if the Servicer has not satisfied the
conditions of Section 5.11(b) of the Servicing Agreement, each
Business Day commencing on the second Business Day following the
date on which the Servicer ceases to satisfy such conditions.
Default means any occurrence that is, or with notice or the lapse
of time or both would become, an Event of Default.
Defeasance Subaccount has the meaning specified in Section 8.02(a)
of the Indenture.
Definitive Securitization Bonds has the meaning specified in
Section 2.11 of the Indenture.
Delaware UCC means the Uniform Commercial Code, as in effect in
the State of Delaware, as amended from time to time.
DTC Agreement means the agreement between the Issuer, the Trustee
and The Depository Trust Company, as the initial Clearing Agency,
dated on or about November 8, 2001, relating to the Securitization
Bonds, as the same may be amended or supplemented from time to
time.
Eligible Guarantor Institution means a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act as "an eligible
guarantor institution," including (as such terms are defined
therein):
(a) a bank;
(b) a broker, dealer, municipal securities broker or
dealer or government securities broker or
dealer;
(c) a credit union;
(d) a national securities exchange, registered
securities association or clearing agency; or
(e) a savings association that is a participant in a
securities transfer association.
Eligible Institution means:
(a) the corporate trust department of the Trustee,
so long as any of the securities of the Trustee
have a credit rating from each Rating Agency in
one of its generic rating categories which
signifies investment grade, or
(b) a depositary institution organized under the
laws of the United States of America or any
State (or any domestic branch of a foreign
bank), which
(i) has either
(A) with respect to any Eligible
Investment having a maturity of
greater than one month, a
long-term unsecured debt rating
of "AA-" by Standard & Poor's
and Fitch and "Aa3" by Moody's,
or
(B) with respect to any Eligible
Investment having a maturity
one month or less, a
certificate of deposit rating
of "A-1+" by Standard & Poor's,
"P-1" by Moody's and "F1+" by
Fitch, or any other long-term,
short-term or certificate of
deposit rating acceptable to
the Rating Agencies, and
(ii) whose deposits are insured by the FDIC.
Eligible Investments mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or
registered form which evidence:
(a) direct obligations of, and obligations fully and
unconditionally guaranteed as to timely payment
by, the United States of America;
(b) demand deposits, time deposits or certificates
of deposit of any depository institution or
trust company (any depositary institution or
trust company being referred to in this
definition as a "financial institution")
incorporated under the laws of the United States
of America or any State thereof (or any domestic
branch of a foreign bank) and subject to
supervision and examination by Federal or State
banking or depositary institution authorities;
provided, however, that at the time of the
investment or contractual commitment to invest
therein, the commercial paper or other
short-term unsecured debt obligations (other
than such obligations the rating of which is
based on the credit of a Person other than such
depositary institution or trust company) thereof
shall have a credit rating from each of the
Rating Agencies in the highest investment
category granted thereby;
(c) commercial paper or other short term obligations
of any corporation organized under the laws of
the United States of America (other than
Consumers) whose ratings, at the time of the
investment or contractual commitment to invest
therein, from each of the Rating Agencies are in
the highest investment category granted thereby;
(d) investments in money market funds having a
rating from each of the Rating Agencies in the
highest investment category granted thereby
(including funds for which the Trustee or any of
its Affiliates act as investment manager or
advisor);
(e) bankers' acceptances issued by any depositary
institution or trust company referred to in
clause (b) above;
(f) repurchase obligations with respect to any
security that is a direct obligation of, or
fully guaranteed by, the United States of
America or any agency or instrumentality thereof
the obligations of which are backed by the full
faith and credit of the United States of
America, in either case entered into with a
depositary institution or trust company (acting
as principal) described in clause (b) above;
(g) repurchase obligations with respect to any
security or whole loan entered into with
(i) a financial institution (acting as
principal) described in clause (b)
above,
(ii) a broker/dealer (acting as principal)
registered as a broker or dealer under
Section 15 of the Exchange Act (any
broker/dealer being referred to in this
definition as a "broker/dealer"), the
unsecured short-term debt obligations
of which are rated P-1 by Moody's, A-1+
by Standard & Poor's and F1+ by Fitch
at the time of entering into this
repurchase obligation, or
(iii) an unrated broker/dealer, acting as
principal, that is a wholly-owned
subsidiary of a non-bank or bank
holding company the unsecured
short-term debt obligations of which
are rated P-1 by Moody's, A-1+ by
Standard & Poor's and F1+ by Fitch at
the time of purchase; or
(h) any other investment permitted by each Rating Agency;
provided, however, that, with respect to Moody's only, the obligor
related to clauses (b), (c), (e), (f) and (g) above must have both
a long term rating of at least A1 and a short term rating of at
least P-1, and provided further, that, unless otherwise permitted
by each Rating Agency, upon the failure of any Eligible
Institution to maintain any applicable rating set forth in this
definition or the definition of Eligible Institution, the related
investments at such institution shall be reinvested in Eligible
Investments at a successor Eligible Institution within 10 days,
and provided, further, that, any Eligible Investment must not:
(a) be sold, liquidated or otherwise disposed of at
a loss, prior to the maturity thereof, or
(b) mature later than (i) the date on which the
proceeds of such Eligible Investment will be
required to be on deposit in the Collection
Account in order for the Trustee to make all
required and scheduled payments and deposits
into Subaccounts under the Indenture, if such
Eligible Investment is held by an Affiliate of
the Trustee, or (ii) the Business Day prior to
the date on which the proceeds of such Eligible
Investment will be required to be on deposit in
the Collection Account in order for the Trustee
to make all required and scheduled payments and
deposits into Subaccounts under the Indenture,
if such Eligible Investment is not held by an
Affiliate of the Trustee; provided, however that
with respect to the period prior to the first
Payment Date any Eligible Investment must not
have a maturity of greater than six months.
Eligible Securities Account means either:
(a) a segregated trust account with an Eligible
Institution or
(b) a segregated trust account with the corporate
trust department of a depositary institution
organized under the laws of the United States of
America or any State (or any domestic branch of
a foreign bank), having corporate trust powers
and acting as trustee for funds deposited in
such account, so long as any of the securities
of such depositary institution shall have a
credit rating from each Rating Agency in one of
its generic rating categories which signifies
investment grade.
Event of Default has the meaning specified in Section 5.01 of the
Indenture.
Exchange Act means the Securities Exchange Act of 1934, as
amended.
Expected Amortization Schedule means, with respect to each Series
or, if applicable, each Class of Securitization Bonds, the
expected amortization schedule for principal thereof, as specified
in the Series Supplement therefor.
Expected Final Payment Date means, with respect to each Series or,
if applicable, each Class of Securitization Bonds, the date when
all interest and principal is scheduled to be paid with respect to
that Series or Class in accordance with the Expected Amortization
Schedule, as specified in the Series Supplement therefor.
Filing Office means the Office of the of the Secretary of State of
the State of Michigan or the Office of the Secretary of State of
the State of Delaware, as applicable.
Final Maturity Date means, for each Series or, if applicable, each
Class of Securitization Bonds, the date by which all principal of
and interest on such Series or Class of Securitization Bonds is
required to be paid, as specified in the Series Supplement
therefor.
Financing Issuance means an issuance of a new Series of
Securitization Bonds under the Indenture to provide funds to
finance the purchase by the Issuer of Securitization Property.
Financing Order means the Opinion and Order issued on October 24,
2000 and the Order Granting Rehearing issued on January 12, 2001
by the MPSC (MPSC Docket Number U-12505) with respect to
Consumers.
Fitch means Fitch, Inc., or its successor.
Formation Documents means, collectively, the Issuer LLC Agreement,
the Issuer Certificate of Formation and any other document
pursuant to which the Issuer is formed or governed, as each may be
amended or supplemented from time to time.
General Subaccount has the meaning specified in Section 8.02(a) of
the Indenture.
Grant means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and grant a
lien upon and a security interest in and right of set-off against,
deposit, set over and confirm. A Grant of the Collateral or of any
other agreement or instrument shall include all rights, powers and
options (but none of the obligations) of the Granting party
thereunder, including the immediate and continuing right to claim
for, collect, receive and give receipt for principal, interest and
other payments in respect of the Collateral and all other moneys
payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise
all rights and options, to bring Proceedings in the name of the
Granting party or otherwise and generally to do and receive
anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
Holder or Securitization Bondholder means the Person in whose name
a Securitization Bond of any Series or Class is registered in the
Securitization Bond Register.
Indemnified Person has the meaning specified in Section 5.02 of
the Servicing Agreement.
Indemnity Amount means the amount of any indemnification
obligation payable under the Basic Documents.
Indenture means the Indenture dated as of November 8, 2001,
between the Issuer and the Trustee, as the same may be amended and
supplemented from time to time by one or more Supplemental
Indentures, and shall include each Series Supplement and the forms
and terms of the Securitization Bonds established thereunder.
Independent means, when used with respect to any specified Person,
that the Person
(a) is in fact independent of the Issuer, any other
obligor upon the Securitization Bonds,
Consumers, the Servicer (if different from
Consumers) and any Affiliate of any of the
foregoing Persons,
(b) does not have any direct financial interest or
any material indirect financial interest in the
Issuer, any such other obligor, Consumers or any
Affiliate of any of the foregoing Persons, and
(c) is not connected with the Issuer, any such other
obligor, Consumers or any Affiliate of any of
the foregoing Persons as an officer, employee,
promoter, underwriter, trustee, partner,
director or person performing similar functions.
Independent Certificate means a certificate or opinion to be
delivered to the Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section
11.01 of the Indenture, made by an Independent appraiser or other
expert appointed by an Issuer Order and approved by the Trustee in
the exercise of reasonable care, and such opinion or certificate
shall state that the signer has read the definition of
"Independent" in this Appendix A and that the signer is
Independent within the meaning thereof.
Independent Manager has the meaning set forth in the Issuer LLC
Agreement.
Initial Purchase Price has the meaning set forth in Section
2.01(a) of the Sale Agreement.
Initial Transfer Date means the Series Issuance Date for the first
Series of Securitization Bonds.
Initial Transferred Securitization Property means the
Securitization Property sold, assigned and/or transferred by the
Seller to the Issuer as of the Initial Transfer Date pursuant to
the Sale Agreement and the Bill of Sale delivered on or prior to
the Initial Transfer Date as identified in such Bill of Sale.
Insolvency Event means, with respect to a specified Person,
(a) the filing of a decree or order for relief by a
court having jurisdiction in the premises in
respect of such Person or any substantial part
of its property in an involuntary case under any
applicable Federal or State bankruptcy,
insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or
similar official for such Person or for any
substantial part of its property, or ordering
the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain
unstayed and in effect for a period of 90
consecutive days or
(b) the commencement by such Person of a voluntary
case under any applicable Federal or State
bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an
involuntary case under any such law, or the
consent by such Person to the appointment of or
taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or
similar official for such Person or for any
substantial part of its property, or the making
by such Person of any general assignment for the
benefit of creditors, or the failure by such
Person generally to pay its debts as such debts
become due, or the taking of action by such
Person in furtherance of any of the foregoing.
Intercreditor Agreement means: (i) the Intercreditor Agreement
dated as of November 8, 2001 (the "Initial Intercreditor
Agreement"), among Consumers, the Trustee, the Issuer, Canadian
Imperial Bank of Commerce and Asset Securitization Cooperative
Corporation, as amended and supplemented from time to time; or
(ii) any subsequent intercreditor agreement entered into by the
Trustee pursuant to Section 18(b) of the Initial Intercreditor
Agreement.
Interest means, for any Payment Date for any Series or Class of
Securitization Bonds, the sum, without duplication, of:
(a) an amount equal to the amount of interest
accrued at the applicable Interest Rate from the
prior Payment Date with respect to that Series
or Class;
(b) any unpaid interest, plus any interest accrued
on this unpaid interest at the applicable
Interest Rate, to the extent permitted by
applicable law;
(c) if the Securitization Bonds have been declared
due and payable, all accrued and unpaid interest
thereon; and
(d) with respect to a Series or Class to be redeemed
prior to the next Payment Date, the amount of
interest that will be payable as interest on
such Series or Class upon such redemption.
Interest Rate means, with respect to each Series or Class of
Securitization Bonds, the rate at which interest accrues on the
principal balance of Securitization Bonds of such Series or Class,
as specified in the Series Supplement therefor.
Interest Rate Swap Agreement means any interest rate swap
agreement entered into by the Issuer with respect to any Series or
Class of Securitization Bonds, including, without limitation, the
ISDA Master Agreement and the related Schedule and Confirmation
between the Issuer and a Swap Counterparty, as same may be amended
or supplemented from time to time.
Issuer means Consumers Funding LLC, a Delaware limited liability
company, or its successor under the Indenture or the party named
as such in the Indenture until a successor replaces it and,
thereafter, means the successor.
Issuer Annex means Annex 1 of the Servicing Agreement.
Issuer Certificate of Formation means the Amended and Restated
Certificate of Formation of the Issuer which was filed with the
Delaware Secretary of State's Office on November 6, 2001, as the
same may be amended or supplemented from time to time.
Issuer LLC Agreement means the Amended and Restated Limited
Liability Company Agreement between the Issuer and Consumers, as
sole Member, dated as of November 8, 2001, as the same may be
amended or supplemented from time to time.
Issuer Officer's Certificate means a certificate signed by any
Authorized Officer of the Issuer, under the circumstances
described in, and otherwise complying with, the applicable
requirements of Section 11.01 of the Indenture, and delivered to
the Trustee. Unless otherwise specified, any reference in the
Indenture to an Officer's Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.
Issuer Opinion of Counsel means one or more written opinions of
counsel who may, except as otherwise expressly provided in the
Indenture, be employees of or counsel to the Issuer or the Seller
and who shall be reasonably satisfactory to the Trustee, and which
opinion or opinions shall be addressed to the Trustee, and shall
be in a form reasonably satisfactory to the Trustee.
Issuer Order or Issuer Request means a written order or request,
respectively, signed in the name of the Issuer by any one of its
Authorized Officers and delivered to the Trustee.
Legal Defeasance Option has the meaning specified in Section
4.01(b) of the Indenture.
Lien means a security interest, lien, charge, pledge, equity or
encumbrance of any kind.
Losses means collectively, any and all liabilities, obligations,
losses, damages, payments, costs or expenses of any kind
whatsoever.
Manager has the meaning set forth in the Issuer LLC Agreement.
Member means Consumers, as the sole member of the Issuer, in its
capacity as such member under the Issuer LLC Agreement.
Michigan UCC means the Uniform Commercial Code, as in effect in
the State of Michigan, as amended from time to time.
Monthly Remittance Date means the 19th day of each calendar month
(or if such day is not a Business Day, the preceding Business
Day).
Monthly Servicing Fee means the fee payable to the Servicer on a
monthly basis for services rendered, in accordance with Section
5.07 of the Servicing Agreement.
Moody's means Moody's Investors Service, Inc., or its successor.
MPSC means the Michigan Public Service Commission or its
successor.
MPSC Regulations means any regulations, orders, guidelines or
directives promulgated, issued or adopted by the MPSC, as in
effect from time to time.
Officers' Certificate means, with respect to a corporation, a
certificate signed by the chairman of the board, the president,
the vice chairman of the board, any executive vice president, any
vice president, the treasurer or the secretary of such company,
and with respect to a limited liability company, any Manager.
Operating Expenses means, with respect to the Issuer, all fees,
costs, expenses and indemnity payments owed by the Issuer,
including, without limitation, all amounts owed by the Issuer to
the Trustee, the Monthly Servicing Fee, the fees and expenses
payable by the Issuer to the Administrator under the
Administration Agreement, the fees and expenses payable by the
Issuer to the Independent Managers and Special Members of the
Issuer, fees of the Rating Agencies, legal fees and expenses of
the Servicer pursuant to Section 3.10 of the Servicing Agreement,
legal and accounting fees, costs and expenses of the Issuer and
legal, accounting or other fees, costs and expenses of the Seller
(including, without limitation, any costs and expenses incurred by
the Seller pursuant to Section 4.09 of the Sale Agreement) under
or in connection with the Basic Documents or the Financing Order.
Opinion of Counsel means one or more written opinions of counsel
who may be an employee of or counsel to Consumers, the Issuer or
any other Person (as the context may require), which counsel shall
be reasonably acceptable to the Trustee, the Issuer or the Rating
Agencies, as applicable, and which shall be in form reasonably
satisfactory to the Trustee, if applicable.
Outstanding with respect to Securitization Bonds means, as of the
date of determination, all Securitization Bonds theretofore
authenticated and delivered under the Indenture except:
(a) Securitization Bonds theretofore canceled by the
Securitization Bond Registrar or delivered to
the Securitization Bond Registrar for
cancellation;
(b) Securitization Bonds or portions thereof the
payment for which money in the necessary amount
has been theretofore deposited with the Trustee
or any Paying Agent in trust for the Holders of
such Securitization Bonds; provided, however,
that if such Securitization Bonds are to be
redeemed, notice of such redemption has been
duly given pursuant to the Indenture or
provision therefor, satisfactory to the Trustee,
made; and
(c) Securitization Bonds in exchange for or in lieu
of other Securitization Bonds which have been
authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the
Trustee is presented that any such
Securitization Bonds are held by a protected
purchaser;
provided that in determining whether the Holders of the requisite
Outstanding Amount of the Securitization Bonds or any Series or
Class thereof have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Basic
Document, Securitization Bonds owned by the Issuer, any other
obligor upon the Securitization Bonds, Consumers or any Affiliate
of any of the foregoing Persons shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Securitization Bonds that the Trustee knows to be so owned shall
be so disregarded. Securitization Bonds so owned that have been
pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securitization
Bonds and that the pledgee is not the Issuer, any other obligor
upon the Securitization Bonds, Consumers or any Affiliate of any
of the foregoing Persons.
Outstanding Amount means the aggregate principal amount of all
Outstanding Securitization Bonds or, if the context requires, all
Outstanding Securitization Bonds of a Series or Class Outstanding
at the date of determination.
Overcollateralization means, with respect to any Payment Date, an
amount that, if deposited to the Overcollateralization Subaccount,
would cause the balance in such subaccount to equal the Scheduled
Overcollateralization Level for such Payment Date, without regard
to investment earnings.
Overcollateralization Amount means, with respect to any Series of
Securitization Bonds, the amount specified as such in the Series
Supplement therefor.
Overcollateralization Subaccount has the meaning specified in
Section 8.02(a) of the Indenture.
Paying Agent means the Trustee or any other Person, including any
Person appointed pursuant to Section 3.02(b) of the Indenture,
that meets the eligibility standards for the Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to
make the payments of principal of or premium, if any, or interest
on the Securitization Bonds on behalf of the Issuer.
Payment Date means, with respect to each Series or Class of
Securitization Bonds, each date or dates respectively specified as
Payment Dates for such Series or Class in the Series Supplement
therefor.
Person means any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust (including
any beneficiary thereof), business trust, limited liability
company, unincorporated organization or government or any agency
or political subdivision thereof.
Predecessor Securitization Bond means, with respect to any
particular Securitization Bond, every previous Securitization Bond
evidencing all or a portion of the same debt as that evidenced by
such particular Securitization Bond; and, for the purpose of this
definition, any Securitization Bond authenticated and delivered
under Section 2.06 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Securitization Bond shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen
Securitization Bond.
Principal means, with respect to any Payment Date and each Series
or Class of Securitization Bonds:
(a) the amount of principal scheduled to be paid on
such Payment Date in accordance with the
Expected Amortization Schedule;
(b) the amount of principal due on the Final
Maturity Date of any Series or Class if such
Payment Date is the Final Maturity Date;
(c) the amount of principal due as a result of the
occurrence and continuance of an Event of
Default and acceleration of the Securitization
Bonds;
(d) the amount of principal and premium, if any, due
as a result of a redemption of Securitization
Bonds on such Payment Date; and
(e) any overdue payments of principal.
Pro Rata has the meaning set forth in Section 8.02(l) of the
Indenture.
Proceeding means any suit in equity, action at law or other
judicial or administrative proceeding.
Projected Securitization Bond Balance means, as of any date, the
sum of the amounts provided for in the Expected Amortization
Schedules for each Outstanding Series of Securitization Bonds as
of such date.
Rating Agency means, as of any date, any rating agency rating the
Securitization Bonds of any Class or Series at the time of
issuance thereof at the request of the Issuer. If no such
organization or successor is any longer in existence, "Rating
Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Issuer,
notice of which designation shall be given to the Trustee, the
Member and the Servicer.
Rating Agency Condition means, with respect to any action, the
notification by the Trustee to each Rating Agency of such action
and the notification from each of Fitch and S&P to the Trustee and
the Issuer that such action will not result in a reduction or
withdrawal of the then current rating by such Rating Agency of any
Outstanding Series or Class of Securitization Bonds.
Record Date has the meaning set forth in each Supplemental
Indenture.
Redemption Date means, with respect to each Series or Class of
Securitization Bonds, the date for the redemption of the
Securitization Bonds of such Series or Class pursuant to Sections
10.01 or 10.02 of the Indenture or the Series Supplement for such
Series or Class, which in each case shall be a Payment Date.
Redemption Price has the meaning set forth in Section 10.01 of the
Indenture.
Refunding Issuance means an issuance of a new Series of
Securitization Bonds under the Indenture to pay the cost of
refunding, through redemption or payment on the Expected Final
Payment Date for a Series or Class of Securitization Bonds, all or
part of the Securitization Bonds of such Series or Class to the
extent permitted by the terms thereof.
Released Parties has the meaning specified in Section 5.02(e) of
the Servicing Agreement.
Remittance Date means a Daily Remittance Date or a Monthly
Remittance Date, as applicable.
Required Capital Amount means with respect to any Series, the
amount required to be deposited in the Capital Subaccount on the
Series Issuance Date of such Series, as specified in the related
Series Supplement.
Reserve Subaccount has the meaning specified in Section 8.02(a) of
the Indenture.
Responsible Officer means, with respect to the Trustee, any
officer assigned to the Corporate Trust Division (or any successor
thereto), including any vice president, assistant vice president,
trust officer, secretary, assistant secretary, or any other
officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers, in each
case having direct responsibility for the administration of the
Indenture.
Retiring Trustee has the meaning specified in Section 6.08(b) of
the Indenture.
Sale Agreement means the Sale Agreement dated November 8, 2001
between the Seller and the Issuer, as the same may be amended or
supplemented from time to time.
Scheduled Overcollateralization Level means, with respect to each
Series and any Payment Date, the amount with respect to such
Series set forth as such in Schedule B of the Series Supplement.
Secured Obligations has the meaning set forth in the Granting
Clause of the Indenture.
Securities Account Control Agreement means the securities account
control agreement dated as of November 8, 2001, by and between
Consumers Funding LLC, as debtor, the Trustee as the secured party
and The Bank of New York, in its capacity as securities
intermediary thereunder.
Securitization Bond means any of the Securitization Bonds (as
defined in the Customer Choice Act) issued by the Issuer pursuant
to the Indenture.
Securitization Bond Balance means, as of any date, the aggregate
Outstanding Amount of all Series of Securitization Bonds on such
date.
Securitization Bond Register has the meaning specified in Section
2.05(a) of the Indenture.
Securitization Bond Registrar has the meaning specified in Section
2.05(a) of the Indenture.
Securitization Charge means the nonbypassable amounts to be
charged for the use or availability of electric services (but does
not include tax charges authorized by the Financing Order),
approved by the MPSC under the Financing Order, to fully recover
qualified costs, to be collected by Consumers, its successors,
assignees or other collection agents, as provided for in the
Financing Order.
Securitization Charge Adjustment means each adjustment to the
Securitization Charge related to the Transferred Securitization
Property made in accordance with Section 4.01 of the Servicing
Agreement, the Issuer Annex and the Financing Order.
Securitization Charge Rate means the amount of the surcharge
applied to all kilowatt-hours (KWh) billed to determine the amount
of the Securitization Charges.
Securitization Charge Collections means amounts received by the
Servicer in respect of the Securitization Charge as determined by
the Servicer in accordance with the allocation methodology set
forth in Annex 2 to the Servicing Agreement.
Securitization Property has the meaning assigned to that term in
the Customer Choice Act and as approved with respect to Consumers
in the Financing Order.
Securitization Property Documentation means all documents relating
to the Transferred Securitization Property, including copies of
the Financing Order and all documents filed with the MPSC in
connection with any Securitization Charge Adjustment.
Securitization Ratio means for an entire Billing Month the total
Securitization Charges billed by the Servicer for each rate class
divided by the total charges billed by Consumers and the Servicer
for each rate class to customers for such Billing Month. Customers
for this purpose refers to Consumers' electric and combination
electric and gas customers (and not gas only customers).
Seller means Consumers, in its capacity as seller of the
Securitization Property to the Issuer pursuant to the Sale
Agreement.
Series means any series of Securitization Bonds issued by the
Issuer and authenticated by the Trustee pursuant to the Indenture,
as specified in the Series Supplement therefor.
Series Capital Subaccount has the meaning specified in Section
8.02(a) of the Indenture.
Series Issuance Date means, with respect to any Series, the date
on which the Securitization Bonds of such Series are to be
originally issued in accordance with Section 2.10 of the Indenture
and the Series Supplement for such Series.
Series Overcollateralization Subaccount has the meaning specified
in Section 8.02(a) of the Indenture.
Series Subaccount has the meaning specified in Section 8.02(a) of
the Indenture.
Series Supplement means an indenture supplemental to the Indenture
that authorizes a particular Series of Securitization Bonds, as
the same may be amended or supplemented from time to time.
Servicer means Consumers, as the servicer of the Securitization
Property, and each successor to Consumers (in the same capacity)
pursuant to Section 5.03, 5.04 or 6.04 of the Servicing Agreement.
Servicer Default means an event specified in Section 6.01 of the
Servicing Agreement.
Servicing Agreement means the Servicing Agreement dated as of
November 8, 2001 between the Issuer and the Servicer, as the same
may be amended and supplemented from time to time.
Special Member has the meaning set forth in the Issuer LLC
Agreement.
Standard & Poor's, or S&P, means Standard & Poor's Ratings Group,
a division of The McGraw-Hill Companies, or its successor.
State means any one of the 50 states of the United States of
America or the District of Columbia.
Subaccount means any of the subaccounts of the Collection Account
specified in Section 8.02 of the Indenture.
Subsequent Sale means the sale of additional Securitization
Property by the Seller to the Issuer after the Initial Transfer
Date, subject to the satisfaction of the conditions specified in
the Sale Agreement and the Indenture.
Subsequent Transfer Date means the date that a sale of Subsequent
Transferred Securitization Property will be effective, as
specified in a written notice provided by the Seller to the Issuer
pursuant to the Sale Agreement.
Subsequent Transferred Securitization Property means
Securitization Property sold by the Seller to the Issuer as of a
Subsequent Transfer Date pursuant to the Sale Agreement and the
Bill of Sale delivered on or prior to the Subsequent Transfer Date
as identified in such Bill of Sale.
Successor Servicer has the meaning specified in Section 3.19(i) of
the Indenture.
Supplemental Indenture means a supplemental indenture entered into
by the Issuer and the Trustee pursuant to Article IX of the
Indenture.
Swap Counterparty means, with respect to any Interest Rate Swap
Agreement, the swap counterparty under that Interest Rate Swap
Agreement.
Termination Notice has the meaning specified in Section 6.01(d) of
the Servicing Agreement.
Transfer Date means the Initial Transfer Date or any Subsequent
Transfer Date, as applicable.
Transferred Securitization Property means Securitization Property
which has been sold, assigned and/or transferred to the Issuer
pursuant to the Sale Agreement and the Bill of Sale.
Trust Indenture Act or TIA means the Trust Indenture Act of 1939,
as in force on the date hereof, unless otherwise specifically
provided.
Trustee means The Bank of New York, a New York banking
corporation, or its successor, as trustee under the Indenture, or
any successor Trustee under the Indenture.
UCC means the Uniform Commercial Code, as in effect in the
relevant jurisdiction, as amended from time to time.
Underwriting Agreement means the Underwriting Agreement dated as
of October 31, 2001 among the Seller, the Issuer and Morgan
Stanley & Co. Incorporated, on behalf of itself and as the
representative of the several underwriters named therein.
U.S. Government Obligations means direct obligations (or
certificates representing an ownership interest in such
obligations) of the United States of America (including any agency
or instrumentality thereof) for the payment of which the full
faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.