EXHIBIT 10.1
FORM OF SALE AGREEMENT
SALE AGREEMENT
between
CONSUMERS FUNDING LLC
Issuer
and
CONSUMERS ENERGY COMPANY
Seller
Dated as of [__________], 2001
TABLE OF CONTENTS
ARTICLE I
Definitions
SECTION 1.01 Definitions......................................................1
SECTION 1.02 Other Definitional Provisions....................................1
ARTICLE II
Conveyance of Transferred Securitization Property
SECTION 2.01 Conveyance of Initial Transferred Securitization Property........2
SECTION 2.02 Conditions to Conveyance of Securitization Property..............3
ARTICLE III
Representations and Warranties of Seller
SECTION 3.01 Organization and Good Standing...................................5
SECTION 3.02 Due Qualification................................................5
SECTION 3.03 Power and Authority..............................................5
SECTION 3.04 Binding Obligation...............................................5
SECTION 3.05 No Violation.....................................................5
SECTION 3.06 No Proceedings...................................................6
SECTION 3.07 Approvals........................................................6
SECTION 3.08 The Transferred Securitization Property..........................6
SECTION 3.09 Solvency.........................................................9
ARTICLE IV
Covenants of the Seller
SECTION 4.01 Seller's Existence...............................................9
SECTION 4.02 No Liens or Conveyances..........................................9
SECTION 4.03 Use of Proceeds. ..............................................10
SECTION 4.04 Delivery of Collections.........................................10
SECTION 4.05 Notice of Liens.................................................10
SECTION 4.06 Compliance with Law.............................................10
SECTION 4.07 Covenants Related to Transferred Securitization Property........10
SECTION 4.08 Notice of Indemnification Events................................11
SECTION 4.08 Protection of Title.............................................11
SECTION 4.09 Taxes...........................................................12
ARTICLE V
Additional Undertakings of the Seller
SECTION 5.01 Liability of the Seller; Indemnities............................13
SECTION 5.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller......................................14
SECTION 5.03 Limitation on Liability of the Seller and Others................15
ARTICLE VI
Miscellaneous Provisions
SECTION 6.01 Amendment.......................................................15
SECTION 6.02 Notices.........................................................16
SECTION 6.03 Assignment by Seller............................................16
SECTION 6.04 Assignment to Trustee...........................................17
SECTION 6.05 Limitations on Rights of Others.................................17
SECTION 6.06 Severability....................................................17
SECTION 6.07 Separate Counterparts...........................................17
SECTION 6.08 Headings........................................................17
SECTION 6.09 Governing Law...................................................17
SECTION 6.10 Nonpetition Covenant............................................18
EXHIBIT A - Bill of Sale.....................................................A-1
EXHIBIT B - Opinion of Counsel...............................................B-1
EXHIBIT C - Opinion of Counsel...............................................C-1
APPENDIX A - Master Definitions
SALE AGREEMENT, dated as of [__________], 2001, by and between CON
SUMERS FUNDING LLC, a Delaware limited liability company, as issuer (the
"Issuer"), and CONSUMERS ENERGY COMPANY, a Michigan corporation, as seller
hereunder (in such capacity, the "Seller").
W I T N E S S E T H:
WHEREAS the Issuer desires to purchase from time to time
Securitization Property created pursuant to the Customer Choice Act and the
Financing Order;
WHEREAS the Seller is willing to sell Securitization Property to
the Issuer;
WHEREAS the Issuer, in order to finance the purchase of the
Transferred Securitization Property, will from time to time issue
Securitization Bonds under the Indenture; and
WHEREAS the Issuer, to secure its obligations under the
Securitization Bonds and the Indenture, will pledge its right, title and
interest in, to and under the Transferred Securitization Property to the
Trustee for the benefit of the Securitization Bondholders.
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 herein and not
otherwise defined herein have the meanings assigned to them in Appendix A
hereto.
SECTION 1.02 Other Definitional Provisions.
(a) "Agreement" means this Sale 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 which have a
material adverse effect on the Issuer or the Securitization Bondholders.
(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 refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section, Schedule and
Exhibit references contained in this Agreement are references to Sections,
Schedules and Exhibits in or to this Agreement unless otherwise specified;
and the term "including" means "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
Conveyance of Transferred Securitization Property
SECTION 2.01 Conveyance of Initial Transferred Securitization
Property.
(a) In consideration of the Issuer's payment to or upon the order
of the Seller of $[ ] (the "Initial Purchase Price") by wire transfer of
funds immediately available on the date hereof to Seller's account no. [ ]
at [ ], routing transit # [ ], subject to the conditions specified in
Section 2.02, the Seller does hereby irrevocably sell, transfer, assign and
otherwise convey to the Issuer, without recourse (subject to the
obligations of the Seller herein), all right, title and interest of the
Seller in, to and under the Initial Transferred Securitization Property
identified in the Bill of Sale delivered pursuant to Section 2.02(a) on or
prior to the Initial Transfer Date (such sale, transfer, assignment and
conveyance of the Initial Transferred Securitization Property to include,
to the fullest extent permitted by Michigan law, the assignment of all
revenues, collections, payments, money and proceeds arising out of the
Securitization Charges and the other rights and interests constituting the
Initial Transferred Securitization Property, as the same may be adjusted
from time to time). Such sale, transfer, assignment and conveyance of the
Initial Transferred Securitization Property is hereby expressly stated to
be a sale or other absolute transfer and, pursuant to Section 10l. of the
Customer Choice Act, constitutes a true sale and not a secured transaction
and that title, legal and equitable, to the Initial Transferred
Securitization Property has passed to the Issuer. The preceding sentence is
the statement referred to in Section 10l. of the Customer Choice Act. The
Seller agrees and confirms that, upon the execution and delivery of this
Agreement and the related Bill of Sale and payment of the Initial Purchase
Price, title, legal and equitable, to the Initial Transferred
Securitization Property shall pass to the Issuer and the Seller shall have
no right, title or interest in, to or under the Initial Transferred
Securitization Property.
(b) Subject to the conditions specified in Section 2.02, the
Issuer does hereby purchase the Initial Transferred Securitization Property
from the Seller for the consideration set forth in paragraph (a) above.
(c) The Seller and the Issuer each acknowledge and agree that the
purchase price for the Initial Transferred Securitization Property sold
pursuant to this Agreement is equal to its fair market value at the time of
sale.
(d) The Seller and the Issuer further agree that from time to time
the Seller may offer to sell, and the Issuer may purchase, Subsequent
Transferred Securitization Property as of Subsequent Transfer Dates,
subject to the conditions specified in Section 2.02, in exchange for
consideration to be agreed upon (the "Subsequent Purchase Price"). The
Seller and the Issuer hereby agree that each such sale, transfer,
assignment and conveyance of any Subsequent Transferred Securitization
Property shall include, to the fullest extent permitted by Michigan law,
the assignment of all revenues, collections, payments, money and proceeds
of or arising out of the Securitization Charges and the other rights and
interests constituting the Subsequent Transferred Securitization Property,
as the same may be adjusted from time to time. Such sale, transfer,
assignment and conveyance of the Subsequent Transferred Securitization
Property is hereby expressly stated to be a sale or other absolute transfer
and, pursuant to Section 10l. of the Customer Choice Act, shall constitute
a true sale and not a secured transaction and that title, legal and
equitable, to the Subsequent Transferred Securitization Property has passed
to the Issuer. The preceding sentence is the statement referred to in
Section 10l. of the Customer Choice Act. The Seller agrees and confirms
that, after giving effect to any sale contemplated by this paragraph (d),
the execution and delivery of the related Bill of Sale and payment of the
Subsequent Purchase Price, title, legal and equitable, to the Subsequent
Transferred Securitization Property shall pass to the Issuer and the Seller
shall have no right, title or interest in, to or under the Subsequent
Transferred Securitization Property.
(e) Notwithstanding the foregoing, in the event that any sale,
transfer, assignment and conveyance of any Transferred Securitization
Property is determined by a court of competent jurisdiction not to be a
true and absolute sale as contemplated by the parties hereto and the
Customer Choice Act, then such sale, transfer, assignment and conveyance
shall be treated as a pledge of such Transferred Securitization Property
and the Seller shall be deemed to have granted, and does hereby grant, as
of the date hereof, a security interest to the Issuer in such Transferred
Securitization Property to secure a payment obligation incurred by the
Seller in the amount paid by the Issuer for such Transferred Securitization
Property.
SECTION 2.02 Conditions to Conveyance of Securitization Property.
The sale by the Seller to the Issuer, and the purchase by the Issuer from
the Seller, of Securitization Property upon any Transfer Date shall be
subject to and conditioned upon the satisfaction or waiver of each of the
following conditions:
(a) on or prior to the Transfer Date, the Seller shall deliver to
the Issuer a duly executed Bill of Sale identifying the Securitization
Property to be conveyed as of that date, substantially in the form of
Exhibit A hereto;
(b) as of the Transfer Date, no breach by the Seller of its
representations, warranties or covenants in this Agreement shall exist and
the Seller shall have delivered to the Issuer and the Trustee an Officers'
Certificate to such effect and no Servicer Default shall have occurred and
be continuing;
(c) on the Transfer Date:
(i) the Issuer shall have sufficient funds available to
pay the purchase price for the Transferred Securitization Property
to be conveyed on such date, and
(ii) all conditions set forth in the Indenture to the
issuance of one or more Series of Securitization Bonds intended to
provide such funds shall have been satisfied or waived;
(d) on or prior to the Transfer Date, the Seller shall have taken
all actions required under applicable law, including under the Customer
Choice Act and other applicable law, to transfer to the Issuer ownership of
the Transferred Securitization Property to be conveyed on such date, free
and clear of all Liens other than Liens created by the Issuer pursuant to
the Indenture, and the Issuer shall have taken all actions required for the
Issuer to grant the Trustee a first priority perfected security interest in
the Collateral, including, without limitation, filings under the Michigan
UCC and the Delaware UCC;
(e) in the case of any sale of Subsequent Transferred
Securitization Property only, the Seller shall have provided the Issuer and
each Rating Agency with a notice specifying the Subsequent Transfer Date
for the Subsequent Transferred Securitization Property not later than 10
days prior to the Subsequent Transfer Date;
(f) the Seller shall have delivered to each Rating Agency and to
the Issuer:
(i) an Opinion of Counsel to the Seller with respect to
the transfer of the Transferred Securitization Property then being
conveyed to the Issuer substantially in the form of Exhibit B
hereto, and
(ii) an Opinion of Counsel to the Seller, substantially
in the form of Exhibit C hereto;
(g) the Seller shall have delivered to the Trustee and the Issuer
an Officers' Certificate confirming the satisfaction of each condition
precedent specified in this Section 2.02;
(h) with respect to any Subsequent Sale, the Seller shall have
taken any action necessary in order for the Rating Agency Condition to have
been satisfied; and
(i) the Seller shall have received the Initial Purchase Price or
the Subsequent Purchase Price, as applicable, in funds immediately
available on the applicable Transfer Date.
ARTICLE III
Representations and Warranties of Seller
As of the Transfer Date, the Seller makes the following
representations and warranties on which the Issuer has relied and will rely
in acquiring Transferred Securitization Property. The following
representations and warranties are made under existing law as in effect as
of the Transfer Date. The Seller shall not be in breach of any
representation or warranty herein as a result of a change in law occurring
after the Transfer Date. The representations and warranties shall survive
the sale of Transferred Securitization Property to the Issuer and the
pledge thereof to the Trustee pursuant to the Indenture.
SECTION 3.01 Organization and Good Standing. The Seller is a
corporation duly organized and in good standing under the laws of the State
of Michigan, with corporate power and authority to own its properties and
conduct its business as currently owned or conducted.
SECTION 3.02 Due Qualification. The Seller is 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 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 Seller's business, operations, assets, revenues, properties or
prospects, the Securitization Property, the Issuer or the Securitization
Bonds).
SECTION 3.03 Power and Authority. The Seller has the corporate
power and authority to execute and deliver this Agreement and to carry out
its terms; the Seller has full corporate power and authority to own the
Securitization Property and sell and assign the Transferred Securitization
Property to the Issuer, and the Seller has duly authorized such sale and
assignment to the Issuer by all necessary corporate action; and the
execution, delivery and performance of this Agreement has been duly
authorized by the Seller by all necessary corporate action.
SECTION 3.04 Binding Obligation. This Agreement constitutes a
legal, valid and binding obligation of the Seller enforceable against the
Seller 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).
SECTION 3.05 No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof do
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 Seller, or any
indenture, agreement or other instrument to which the Seller is a party or
by which it is bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any applicable
indenture, agreement or other instrument (except as set forth in Section
2.01(e) hereof and any bills of sale for Securitization Property, the
Servicing Agreement and the Issuer LLC Agreement); nor violate any law or
any order, rule or regulation applicable to the Seller of any court or of
any Federal or State regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties.
SECTION 3.06 No Proceedings. Except as disclosed in writing by the
Seller to the Issuer, there are no proceedings or investigations pending
or, to the Seller's best knowledge, threatened, before any court, Federal
or State regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or the Issuer or their
respective properties:
(a) asserting the invalidity of the Basic Documents, the
Securitization Bonds, the Customer Choice Act or the Financing Order;
(b) seeking to prevent the issuance of the Securitization Bonds or
the consummation of any of the transactions contemplated by the Basic
Documents or the Securitization Bonds;
(c) challenging the Seller's treatment of the Securitization Bonds
as debt of the Seller for Federal and State income, gross receipts or
franchise tax purposes; or
(d) seeking any determination or ruling that could reasonably be
expected to materially and adversely affect the performance by the Seller
of its obligations under, or the validity or enforceability of, the Basic
Documents or the Securitization Bonds.
SECTION 3.07 Approvals. Except for the filing of financing
statements and continuation statements under the UCC, 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 Seller of this Agreement, the performance by the Seller
of the transactions contemplated hereby, the fulfillment by the Seller of
the terms hereof or the creation or transfer of the Transferred
Securitization Property, except those that have been obtained or made.
SECTION 3.08 The Transferred Securitization Property.
(a) Information. All information provided by the Seller to the
Issuer with respect to the Transferred Securitization Property is correct
in all material respects.
(b) Effect of Transfer. Each sale, transfer, assignment and
conveyance herein contemplated constitutes a sale or other absolute
transfer, of all right, title and interest of the Seller in, to and under
the Transferred Securitization Property from the Seller to the Issuer; upon
execution and delivery of this Agreement and the related Bill of Sale, the
Seller will have no right, title or interest in, to or under the
Transferred Securitization Property; and the Transferred Securitization
Property and the proceeds thereof would not be part of the estate of the
Seller as debtor in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law.
(c) Transfer Filings. The Seller is the sole owner of the
Transferred Securitization Property sold to the Issuer on the Transfer
Date; and the Transferred Securitization Property will have been validly
sold, assigned, transferred and conveyed to the Issuer free and clear of
all Liens other than Liens created by the Issuer pursuant to the Indenture.
All actions or filings, including filings under the Michigan UCC, necessary
in any jurisdiction to give the Issuer a valid first priority perfected
ownership interest in the Transferred Securitization Property and to grant
to the Trustee a first priority perfected security interest in the
Transferred Securitization Property, free and clear of all Liens of the
Seller or anyone else claiming through the Seller, have been taken or made.
(d) Financing Order Irrevocable; Process Valid; No Litigation;
Etc.
(i) The Financing Order has been issued by the MPSC in
accordance with the Customer Choice Act, and the Financing Order
and the process by which it was issued comply with all applicable
laws, rules and regulations. The Financing Order has become
effective pursuant to the Customer Choice Act and is and as of the
date of issuance of any Securitization Bonds will be in full force
and effect and final and non-appealable.
(ii) As of the Series Issuance Date, the Securitization
Bonds of the related Series will be entitled to the protections
provided by the Customer Choice Act and, in accordance with the
Customer Choice Act, the Financing Order and the Securitization
Charge authorized therein, subject to the periodic adjustments to
the Securitization Charge provided for in the Financing Order,
have become irrevocable.
(iii) (A) Under the Customer Choice Act, the
State of Michigan may not take or permit any action that
would impair the value of the Transferred Securitization
Property or reduce or alter, except as allowed under
Section 10k(3) of the Customer Choice Act, or impair the
Securitization Charges to be imposed, collected and
remitted to the Issuer, until the principal, interest and
premium and any other charges incurred and contracts to
be performed in connection with the Securitization Bonds
have been paid and performed in full; and
(B) under the contract clauses of the
State of Michigan and United States Constitutions, the
State of Michigan, including the MPSC, could not
constitutionally take any action of a legislative
character, including, but not limited to, the repeal or
amendment of the Customer Choice Act or the MPSC
financing order (including repeal or amendment by voter
initiative as defined in the Michigan Constitution or by
amendment of the Michigan Constitution), that would
substantially impair the value of the Transferred
Securitization Property or substantially reduce or alter,
except as allowed under the adjustment provisions
described in Customer Choice Act, or substantially impair
the securitization charges to be imposed, collected and
remitted to the Issuer, unless this action is a
reasonable exercise of the State of Michigan's sovereign
powers and of a character reasonable and appropriate to
the public purpose justifying this action and, under the
takings clauses of the State of Michigan and United
States Constitutions, the State of Michigan, including
the MPSC, could not repeal or amend the Customer Choice
Act or the Financing Order (including repeal or amendment
by voter initiative as defined in the Michigan
Constitution, or by amendment of the Michigan
Constitution) or take any other action in contravention
of its pledge quoted above, without paying just
compensation to the Securitization Bondholders, as
determined by a court of competent jurisdiction, if this
action would constitute a permanent appropriation of a
substantial property interest of the Securitization
Bondholders in the Securitization Property and deprive
the Securitization Bondholders of their reasonable
expectations arising from their investments in the
Securitization Bonds.
(iv) There is no order by any court providing for the
revocation, alteration, limitation or other impairment of the
Customer Choice Act, the Financing Order, the Transferred
Securitization Property or the Securitization Charges or any
rights arising under any of them or that seeks to enjoin the
performance of any obligations under the Financing Order.
(e) Assumptions. The assumptions used in calculating the
Securitization Charge in any notice delivered by Consumers to the MPSC will
be reasonable and made in good faith.
(f) Creation of Transferred Securitization Property.
(i) The Transferred Securitization Property constitutes a
present property right;
(ii) the Securitization Property consists of the rights
and interests of the Seller, or its successor, under the Financing
Order, including all of the following:
(a) the right under Section 10j(1)(a) of the
Customer Choice Act to impose, collect, and receive the
Securitization Charges authorized in the Financing Order
in an amount necessary to provide the full recovery of
all qualified costs, as defined in the Customer Choice
Act;
(b) the right under Section 10j(1)(b) of the
Customer Choice Act and under the Financing Order to
obtain periodic adjustments of Securitization Charges
under Section 10k(3) of the Customer Choice Act; and
(c) all revenue, collections, payments, money,
and proceeds arising out of the rights and interests
described above;
(iii) the Transferred Securitization Property is not
subject to any Lien created by the Indenture dated September 1,
1945 of the Seller to City Bank Farmers Trust Company (now
Citibank, NA), as mortgage trustee.
(iv) the Financing Order, together with the
Securitization Charges authorized therein, is irrevocable and the
Securitization Charges are not subject to reduction, impairment or
adjustment by further action of the MPSC, except as provided under
Section 10k(3) of the Customer Choice Act.
SECTION 3.09 Solvency. Upon giving effect to the sale of any
Transferred Securitization Property hereunder, the Seller:
(a) is solvent and expects to remain solvent;
(b) is adequately capitalized to conduct its business and affairs
considering its size and the nature of its business and intended purposes;
(c) is not engaged nor does it expect to engage in a business for
which its remaining property represents an unreasonably small amount of
capital;
(d) reasonably believes that it will be able to pay its debts as
they come due; and
(e) is able to pay its debts as they mature and does not intend to
incur, or believe that it will incur, indebtedness that it will not be able
to repay at its maturity.
ARTICLE IV
Covenants of the Seller
SECTION 4.01 Seller's Existence. So long as any of the
Securitization Bonds are outstanding, the Seller shall, subject to Section
5.02, keep in full force and effect its existence and remain in good
standing under the laws of the jurisdiction of its organization, and shall
obtain and preserve its qualification to do business in each jurisdiction
in which such qualification is or will be necessary to protect the validity
and enforceability of this Agreement and each other instrument or agreement
to which the Seller is a party necessary to the proper administration of
this Agreement and the transactions contemplated hereby.
SECTION 4.02 No Liens or Conveyances. Except for the conveyances
hereunder, the Seller shall not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien
on, any of the Transferred Securitization Property, whether now existing or
hereafter created, or any interest therein. The Seller shall not at any
time assert any Lien against or with respect to any Transferred
Securitization Property, and shall defend the right, title and interest of
the Issuer and the Trustee, as assignee of the Issuer, in, to and under the
Transferred Securitization Property, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Seller.
SECTION 4.03 Use of Proceeds. The Seller shall use proceeds from
the sale of the Securitization Property in accordance with the Financing
Order and the Customer Choice Act.
SECTION 4.04 Delivery of Collections. If the Seller receives
collections of the Securitization Charge in its capacity as Seller, the
Seller shall pay the Servicer all payments received by the Seller in
respect thereof as soon as practicable after receipt thereof by the Seller,
but in no event later than two Business Days after such receipt.
SECTION 4.05 Notice of Liens. The Seller shall notify the Issuer
and the Trustee promptly after becoming aware of any purported Lien on any
Transferred Securitization Property other than the conveyances hereunder or
under the Indenture.
SECTION 4.06 Compliance with Law. The Seller shall comply with its
organizational or governing documents and all laws, treaties, rules,
regulations and determinations of any governmental instrumentality
applicable to the Seller, except to the extent that failure to so comply
would not materially adversely affect the Issuer's or the Trustee's
interests in the Transferred Securitization Property or under any of the
Basic Documents or the Seller's performance of its obligations hereunder or
its obligations as Seller under any of the Basic Documents to which it is a
party.
SECTION 4.07 Covenants Related to Transferred Securitization
Property.
(a) So long as any of the Securitization Bonds are outstanding,
the Seller shall:
(i) treat the Securitization Bonds as debt for all
purposes;
(ii) disclose in its financial statements that on a
non-consolidated basis it is not the owner of the Transferred
Securitization Property and that the assets of the Issuer are not
available to pay creditors of the Seller or any of its Affiliates
(other than the Issuer);
(iii) disclose the effects of all transactions between
the Seller and the Issuer in accordance with generally accepted
accounting principles; and
(iv) not own or purchase any Securitization Bonds.
(b) The Seller agrees that upon the sale by the Seller of the
Transferred Securitization Property to the Issuer pursuant to this
Agreement:
(i) to the fullest extent permitted by law,
including the Customer Choice Act and applicable MPSC Regulations,
the Issuer shall have all of the rights originally held by the
Seller with respect to the Transferred Securitization Property,
including the right to collect any amounts payable by any Customer
in respect of such Transferred Securitization Property,
notwithstanding any objection or direction to the contrary by the
Seller; and
(ii) any payment by any Customer to the Issuer
of Securitization Charge Collections shall discharge such
Customer's obligations in respect of such Transferred
Securitization Property to the extent of such payment,
notwithstanding any objection or direction to the contrary by the
Seller.
(c) So long as any of the Securitization Bonds are Outstanding,
(i) except for tax and financial reporting
purposes, the Seller shall not make any statement or reference in
respect of the Transferred Securitization Property that is
inconsistent with the ownership thereof by the Issuer; and
(ii) the Seller shall not take any action in
respect of the Transferred Securitization Property except as
contemplated by the Basic Documents.
SECTION 4.08 Notice of Indemnification Events. The Seller shall
deliver to the Issuer and the Trustee, promptly after having obtained
knowledge thereof, written notice in an Officer's Certificate of the
occurrence of any event which requires or which, with the giving of
notice or the passage of time or both, would require the Seller to make any
indemnification payment pursuant to Section 5.01.
SECTION 4.09 Protection of Title. The Seller shall execute and
file such filings, and cause to be executed and filed such filings, and
take all such actions, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the interests of
the Issuer and the Trustee in the Transferred Securitization Property,
including all filings required under the Michigan UCC and the Delaware UCC
relating to the transfer of the ownership of the Transferred Securitization
Property by the Seller to the Issuer and the pledge of the Transferred
Securitization Property by the Issuer to the Trustee. The Seller 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. The Seller
shall 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:
(a) to protect the Issuer and the Securitization Bondholders
from claims, State actions or other actions or
proceedings of third parties which, if successfully
pursued, would result in a breach of any representation
set forth in Section 3.08; or
(b) to block or overturn any attempts to cause a repeal of,
modification of or supplement to the Customer Choice
Act, the Financing Order or the rights of Securitization
Bondholders by legislative enactment or constitutional
amendment that would be adverse to the Issuer, the
Trustee or the Securitization Bondholders.
The costs of any such actions or proceedings shall be reimbursed by the
Issuer to the Seller from Securitization Charge Collections as an Operating
Expense. The Seller designates the Issuer as its agent and attorney-in-fact
to execute any filings of financing statements, continuation statements or
other instruments required of the Issuer pursuant to this Section, it being
under stood that the Issuer shall have no obligation to execute any such
instruments.
SECTION 4.10 Taxes. So long as any of the Securitization Bonds are
outstanding, the Seller shall, and shall cause each of its subsidiaries
to, pay all material taxes, assessments and governmental charges imposed
upon it or any of its properties or assets or with respect to any of its
franchises, business, income or property before any penalty accrues thereon
if the failure to pay any such taxes, assessments and governmental charges
would, after any applicable grace periods, notices or other similar
requirements, result in a Lien on the Transferred Securitization Property;
provided that no such tax need be paid if the Seller or one of its
Affiliates is contesting the same in good faith by appropriate proceedings
promptly instituted and diligently conducted and if the Seller or such
Affiliate has established appropriate reserves as shall be required in
conformity with generally accepted accounting principles.
ARTICLE V
Additional Undertakings of the Seller
The Seller hereby undertakes the obligations contained in this
Article V and agrees that the Issuer shall have the right to assign its
rights with respect to such obligations to the Trustee for the benefit of
the Securitization Bondholders.
SECTION 5.01 Liability of the Seller; Indemnities.
(a) The Seller shall be liable in accordance herewith only to the
extent of the obligations specifically undertaken by the Seller under this
Agreement.
(b) The Seller shall indemnify the Issuer and the Trustee, for
itself and on behalf of the Securitization Bondholders, and each of their
respective officers, directors, managers, employees and agents for, and
defend and hold harmless each such Person from and against, any and all
taxes (other than any taxes imposed on Securitization Bondholders solely as
a result of their ownership of Securitization Bonds) that may at any time
be imposed on or asserted against any such Person under existing law as of
any Transfer Date as a result of the sale and assignment of the Transferred
Securitization Property by the Seller to the Issuer, the acquisition or
holding of the Transferred Securitization Property by the Issuer or the
issuance and sale by the Issuer of the Securitization Bonds, including any
sales, gross receipts, general corporation, personal property, privilege,
franchise or license taxes, but excluding any taxes imposed as a result of
a failure of such person to properly withhold or remit taxes imposed with
respect to payments on any Securitization Bond.
(c) The Seller shall indemnify the Issuer and the Trustee, for
itself and on behalf of the Securitization Bondholders, and each of their
respective officers, directors, managers, employees and agents for, and
defend and hold harmless each such Person from and against, (i) any and all
amounts of principal of and interest on the Securitization Bonds not paid
when due or when scheduled to be paid in accordance with their terms and
the amount of any deposits to the Issuer required to have been made in
accordance with the terms of the Basic Documents which are not made when so
required, as a result of the Seller's breach of any of its representations,
warranties or covenants contained in this Agreement, and (ii) any and all
liabilities, obligations, claims, actions, suits or payments of any kind
whatsoever that may be imposed on or asserted against any such Person,
other than any liabilities, obligations or claims for or payments of
principal of or interest on the Securitization Bonds, together with any
reasonable costs and expenses incurred by such Person, as a result of the
Seller's breach of any of its representations, warranties or covenants
contained in this Agreement.
(d) The Seller shall pay any and all taxes levied or assessed upon
all or any part of the Issuer's property or assets based on existing law as
of the Transfer Date.
(e) Indemnification under this Section 5.01 shall survive the
resignation or removal of the Trustee and the termination of this Agreement
and shall include reasonable fees and expenses of investigation and
litigation (including reasonable attorneys' fees and expenses). The Seller
shall not indemnify any party for any changes in law after the Transfer
Date. In addition, notwithstanding the foregoing provisions in this Section
5.01, the Seller shall not be liable for any consequential, exemplary or
punitive damages.
(f) The indemnification obligation of the Seller under this
Section 5.01 shall be pari passu with all other general unsecured
obligations of the Seller.
SECTION 5.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller. Any Person:
(a) into which the Seller may be merged or consolidated and
which succeeds to all or the major part of the electric
distribution business of the Seller,
(b) which results from the division of the Seller into two or
more Persons and which succeeds to all or the major part
of the electric distribution business of the Seller,
(c) which may result from any merger or consolidation to
which the Seller shall be a party and which succeeds to
all or the major part of the electric distribution
business of the Seller,
(d) which may succeed to the properties and assets of the
Seller substantially as a whole and which succeeds to all
or the major part of the electric distribution business
of the Seller, or
(e) which may otherwise succeed to all or the major part of
the electric distribution business of the Seller,
which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Seller under this Agreement,
shall be the successor to the Seller hereunder without the execution or
filing of any document or any further act by any of the parties to this
Agreement; provided, however, that:
(i) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Article III
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 Seller 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 5.02 and that all conditions precedent, if
any, provided for in this Agreement relating to such
transaction have been complied with,
(iii) the Seller shall have delivered to the Issuer and the
Trustee an Opinion of Counsel either
(A) stating that, in the opinion of such counsel,
all filings to be made by the Seller, including
filings under Michigan law, that are necessary
fully to preserve and protect fully the
respective interests of the Issuer and 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 preserve and protect
such interests,
(iv) the Rating Agencies shall have received prior written
notice of such transaction (although there is no
requirement of any Rating Agency Confirmation); and
(v) the Seller shall have delivered to the Issuer and the
Trustee an opinion of independent tax counsel as
selected by the Issuer and the Trustee which opinion is
and in form and substance reasonably satisfactory to the
Issuer and the Trustee and 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 Seller, the Issuer, the
Trustee or the holders of the Outstanding Securitization
Bonds.
The Seller shall not consummate any transaction referred to in clauses (a),
(b), (c), (d) or (e) above except upon execution of the above described
agreement of assumption and compliance with clauses (i), (ii), (iii), (iv)
and (v) above. When any Person acquires the properties and assets of the
Seller substantially as a whole and becomes the successor to the Seller in
accordance with the terms of this Section 5.02, then upon the satisfaction
of all of the other conditions of this Section 5.02, the Seller shall
automatically and without further notice be released from its obligations
hereunder.
SECTION 5.03 Limitation on Liability of the Seller and Others. The
Seller and any director, officer, employee or agent of the Seller may rely
in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person, respecting any
matters arising hereunder. Subject to Section 4.08, the Seller shall not be
under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its obligations under this Agreement, and that in
its opinion may involve it in any expense or liability.
ARTICLE VI
Miscellaneous Provisions
SECTION 6.01 Amendment. (a) This Agreement may be amended by the
Seller 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.
(b) Prior to the execution of any amendment to this Agreement, 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. The Issuer and the Trustee may,
but shall not be obligated to, enter into any such amendment which affects
their own rights, duties or immunities under this Agreement or otherwise.
SECTION 6.02 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 Seller, at Consumers Energy Company,
212 W. Michigan Avenue, Jackson, Michigan 49201
Attention: Thomas McNish, Corporate Secretary,
(b) in the case of the Issuer, at Consumers Funding LLC, 212
W. Michigan Avenue, Suite M-1029, Jackson, Michigan
49201, Attention: Managers,
(c) in the case of Moody's, at Moody's Investors Service,
Inc., ABS Monitoring Department, 99 Church Street, New
York, New York 10007,
(d) 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
(e) in the case of Fitch, at Fitch, Inc., 1 State Street
Plaza, New York, New York, Attention: ABS Surveillance,
(f) in the case the Trustee, at the address provided for
notices or communications to the Trustee in the
Indenture;
or, as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 6.03 Assignment by Seller. Subject to Section 5.02, this
Agreement may not be assigned by the Seller.
SECTION 6.04 Assignment to Trustee. The Seller 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 and the proceeds
thereof and the assignment of any or all of the Issuer's rights hereunder
to the Trustee.
SECTION 6.05 Limitations on Rights of Others. The provisions of
this Agreement are solely for the benefit of the Seller, 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 the Collateral or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 6.06 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 6.07 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 6.08 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 6.09 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 6.10 Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement or the Indenture, the Seller 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
any amounts owed to third-party credit enhancers, and any amounts owed
under any hedge or swap agreement, acquiesce, 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.
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:
---------------------------------------
Name:
Title: Manager
CONSUMERS ENERGY COMPANY,
as Seller
By:
---------------------------------------
Name:
Title:
EXHIBIT A
BILL OF SALE
For good and valuable consideration the receipt of which is hereby
acknowledged, CONSUMERS ENERGY COMPANY, a Michigan corporation (the
"Seller"), does hereby sell, assign, transfer and convey to CONSUMERS
FUNDING LLC, a Delaware limited liability company (the "Issuer"), without
recourse except as provided in the Sale Agreement referred to below, all of
the Seller's right, title and interest in, to and under the Transferred
Securitization Property identified as follows: ______, which sale,
assignment, transfer and conveyance of the Transferred Securitization
Property shall include, as provided in the Customer Choice Act, the sale,
assignment, transfer and conveyance of all of the Seller's right, title and
interest in, to and under all revenues, collections, payments, money and
proceeds arising under or with respect to the Securitization Charges
related to the Transferred Securitization Property, as the same may be
adjusted from time to time in accordance with the Customer Choice Act and
the Financing Order, to have and to hold the same unto the Issuer and to
the successors and assigns of the Issuer, forever.
Capitalized terms used herein and not defined shall have the
meanings set forth in the Sale Agreement dated [________], 2001 (the "Sale
Agreement") between the Issuer and the Seller.
IN WITNESS WHEREOF, the Seller has duly executed and delivered
this Bill of Sale this [__] day of [_______], 2001.
CONSUMERS ENERGY COMPANY,
as Seller
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Accepted this [__] day of [________], 2001.
CONSUMERS FUNDING LLC
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
A-1
EXHIBIT B
Opinion of Counsel
B-1
EXHIBIT C
Opinion of Counsel
C-1
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 4(b) of the Issuer Annex.
Administration Agreement means the Administration Agreement dated
as of [________], 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, (b) any 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,
any 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 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 Ratio
will be applied to determine the amount of Securitization Charges
collected.
Collection Curve Percentage means a forecast of the percentages of
amounts billed in a particular month that are expected to be
received during that month:
Current Billing Month's Collections: 40.08%
First Prior Billing Month's Collections: 45.09%
Second Prior Billing Month's Collections: 14.84%
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 Bond holders 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 begins remittance procedures under
Section 3.03(a)(ii) of the Servicing Agreement.
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 [_________], 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
and "P-1" by Moody's, or any
other long-term, short-term or
certificate of deposit rating
accept able 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) demand deposits, time deposits and certificates
of deposit which are fully insured by the
Federal Deposit Insurance Corporation;
(e) 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);
(f) bankers' acceptances issued by any depositary
institution or trust company referred to in
clause (b) above;
(g) 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;
(h) 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 and
A-1+ by Standard & Poor's 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 and A-1+ by
Standard & Poor's at the time of
purchase; or
(i) any other investment permitted by each Rating Agency;
provided, however, that, with respect to Moody's only, the obligor
related to clauses (b), (c), (d), (f), (g) and (h) 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 In vestment 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.
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.
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 [______], 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 ex pert appointed by an Issuer Order and approved by the
Trustee in the exercise of reason able 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 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, in
solvency 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, 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 [ ], 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 [_______], 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, but excluding consequential, exemplary or punitive
damages.
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 [ ] day of each calendar month
(or if such day is not a Business Day, the following 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 chair man 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.
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 In denture 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(h) 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 nation ally 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 and the
notification from each Rating Agency 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 In denture.
Retiring Trustee has the meaning specified in Section 6.08(b) of
the Indenture.
Sale Agreement means the Sale Agreement dated [________], 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 [ ], 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 or
an assign, 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 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, provided that Securitization Charge
Collections with respect to the Securitization Property shall be
determined in accordance with the allocation methodology set forth
in Annex 2 to the Servicing Agreement.
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. For purposes of allocation to daily
collection calculations of Securitization Charges collected, the
rates shall be adjusted for the differences in the number of
billing days in the respective Billing Months.
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
[________], 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 transferred to the Issuer
pursuant to the Sale Agreement.
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 [_________], 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.